Voice of the Industry

The importance of robust risk analysis for securely increasing online sales in Latin America

Monday 28 February 2022 12:04 CET | Editor: Raluca Constantinescu | Voice of the industry

Alain Delcourt, Managing Director at BoaCompra, a PagSeguro company: 'The current context is particularly fragile in terms of fraud risks: on one hand, ecommerce revenue has been skyrocketing in Latin America; on the other, there’s a scenario of heavy financial instability.'

Fraud is a constant risk for companies selling online to Latin America, a region frequently targeted by fraudsters. However, with cutting-edge, reliable technology and deep market expertise, it’s possible to guarantee more secure transactions. This article dives into the main characteristics you should look for in your risk prevention partners. 

As online sales increase more and more, a major risk faced by any company operating digitally also grows: fraud attempts. This is especially true for foreign and local merchants selling in Latin America, a region historically prone to fraud occurrences. 

The current context is particularly fragile in terms of fraud risks: on one hand, ecommerce revenue has been skyrocketing in Latin America for the last few years, and even more so after the COVID-19 pandemic hit; on the other, there’s a scenario of heavy financial instability. 

These two factors make fraud attempts even more common in a region where they are already a daily preoccupation for companies aiming to escape the financial losses caused by fraud. According to MRC’s 2021 Global Fraud Report, 3.5% of ecommerce transactions in Latin America during 2021 were fraud attempts, higher than the global average, which is 2.6%. 

Thus, in order to successfully – and securely – sell to Latin America, you must counter fraudsters with robust, cutting-edge risk analysis solutions. Let’s dive into some of the factors that make a risk analysis process reliable and beneficial for your company, so you can know precisely what your company should look for. 

1. Market and target audience knowledge 

Fraudsters have access to modern technology, but for a fraud attempt to actually happen, they also make use of several behavioural techniques. Therefore, designing an anti-risk flow starts in understanding how a certain audience buys and behaves online. 

Each sector deals with different types of risk, requiring distinct approaches to fraud prevention. The online gaming market, for example, is one of the most frequent fraud targets due to its high number of low-cost purchases, presence of in-game purchases and in-game currencies, and having a younger audience, which might be less aware of fraud risks. 

These are, of course, only a few of the characteristics of fraud attempts targeted at online gaming companies – of which we at BoaCompra are highly aware, since we’ve been leading this segment for our more than 17 years of experience in payment solutions for foreign merchants selling to Latin America. 

Since gaming is one of the most targeted and also fastest-growing online markets, it ‘sets the bar’ for fraud prevention in other digital goods segments, helping them better define the most efficient anti-risk strategies. That also means BoaCompra’s own Smart Fraud Prevention algorithms are ready to protect the digital goods sector as a whole. 

2. Highly trained machine learning 

As technology evolves, companies can strengthen their anti-risk processes, but keep in mind that fraudsters also benefit from technological advances. Thus, it’s essential to implement cutting-edge, constantly updated strategies in order not to fall behind. 

BoaCompra by PagSeguro’s machine learning algorithms have been learning for over 17 years to better identify and fight online fraud attempts in the most sensitive stage: payments. We process more than 100 million transactions every year, and each one of them creates data to feed our machine learning. That’s why we’re able to decrease fraud occurrences without harming the approval process for legitimate purchases. 

3. Personalisation where needed 

Ideally, the expertise your payments partner has and the knowledge from your own company should be combined in order to define the best fraud prevention processes. BoaCompra has its well-established anti-risk flow, but there’s space for personalisation where merchants think that’s necessary to make it even more suited for the business's specific needs. 

It’s also important to be able to manually review any transaction identified as fraudulent, to better avoid false-positive cases and to increase the accuracy of the algorithms. 

Since online fraud usually happens during the payments process, it’s fundamental that your partner for accepting payments in Latin America is able to handle fraud attempts, which can be highly common in the region. From payments to customer support, including the most robust risk prevention, BoaCompra by PagSeguro strives to be a reliable partner for all our clients’ needs. 

About Alain Delcourt 

Alain Delcourt is Managing Director at BoaCompra, a PagSeguro company. He has 20 years of expertise in ecommerce, payments, and digital goods distribution in Latin America. Prior to BoaCompra, Alain co-founded several ventures, which turned him into a versatile executive known for building multicultural teams and highly collaborative work environments. 

About BoaCompra by PagSeguro 

With over 17 years of experience, BoaCompra by PagSeguro is a local payment platform that enables worldwide merchants to access Latin America by accepting over 140 payment methods in local currency, with no need for a local entity. It also allows single/mass payouts to Brazilians in local currency instantly with no banking fees. BoaCompra is part of PagSeguro, a disruptive fintech company driven by robust and consolidated infrastructure and capital.

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Keywords: risk management, ecommerce, fraud prevention, merchants, machine learning
Categories: Fraud & Financial Crime
Companies: BoaCompra
Countries: Latin America
This article is part of category

Fraud & Financial Crime


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