Small and medium-sized enterprises: effective fraud protection contributes to the increase of online sales, in a safe way

The number of online stores in Brazil is growing every day. Brazilian e-commerce is set to grow by 26.9% in 2021, according to Neotrust research. And small and medium-sized enterprises were an important part of that growth. The Microsoft study “The impact of Covid-19 on the culture and work of Brazilian SMEs” showed that 93% of companies have accelerated their digital transformation process since the beginning of the pandemic.

Faced with this scenario, credit card has become the most used payment method in e-commerce. Another study, conducted by Sociedade Brasileira de Varejo e Consumo (SBVC), in 2021, found that the main means of payment offered by companies in online retail are cash and installment credit cards, both with 90% adherence. The most frequently used option is the payment option, which is preferred by 48% of those who shop on a computer and 41% of those who shop on a smartphone.

As a side effect, attempts at fraud and financial fraud began to occur more frequently, with losses for merchants. In this context, Konduto, the anti-fraud vertical in Boa Vista, of which I am the director, operates. Aware of the intensive digital transformation that companies have gone through in recent years, we have begun to develop increasingly sophisticated anti-fraud technologies. These are solutions that can perform complex analyzes to qualify electronic purchase orders, which have a direct impact on sales.

In addition, with the acquisition of Kondut in 2021, Boa Vista became the only company that has a complete solution for the entire e-commerce cycle, covering everything from analytical intelligence solutions for credit analysis, to anti-fraud solutions and even to returns solutions debts. . Not having to resort to three different suppliers, one for credit analysis, another for sales security and another for eventual collection, brings simplicity and economy, which is of fundamental importance for small and medium-sized companies.

Synergies with Boa Vista and Konduto have driven the evolution of the Konduto anti-fraud solution, which today is the best seller among small and medium-sized businesses because it meets their specific needs. Companies that already use it are better positioned in the world of e-commerce.

Diminishing returns is a challenge

The fight against fraud has a direct impact on sales, as it can increase the number of approved orders, but certainly, even reduce chargebacks – the term used to cancel a purchase made with a credit card. This security system was created to guarantee the consumer the return of its value in the event that the purchase is not in accordance with the business, that is, when it does not meet the criteria specified during the sale. It also guarantees a refund when a purchase is made by a third party or without the owner’s consent, which normally happens with cloned credit cards.?

However, many fraudsters commit what we classify as self-deception, which is particularly difficult to detect and prevent. Basically, a legitimate customer places an order in an online store and requests a cancellation of the transaction in bad faith – claiming that he did not buy or did not receive the product. From there, the fraudster demands a refund, and if the merchant fails to turn things around, they bear all the damage – contrary to what many imagine, this account does not belong to the card house.

This is an example that reinforces the importance for those engaged in electronic sales to adopt an effective anti-fraud system – especially for small and medium-sized enterprises that have more modest incomes and, therefore, may have the future of their business threatened by fraud.

Constant monitoring reduces risks

The effectiveness of the anti-fraud system includes constant monitoring of all transactions that take place on the sales platform. More than that, the solution recognizes common customer buying behavior and maps each step of the sales process to ensure efficient approvals. This monitoring is essential because in this way the system can recognize orders that deviate from the standard and analyze them in depth.

The solution also avoids another risk surrounding e-commerce: that requests from good customers get mixed up with fraud attempts and blocked. Another important opportunity that the trader gets is risk analysis. This process selects which products are of most interest to fraudsters and therefore must be closely monitored, in addition to helping in decision-making and choosing the most appropriate strategies for business success.

To get an idea of ​​how fraud protection can contribute to the success of online commerce, just look at the following figures: in 2021, the number of digital frauds thwarted by Konduto reached 25 million (more than 68,000 per day, 47 per minute) which is an increase from 66% compared to 15 million registered in 2020. Avoided loss reached BRL 7.27 billion, compared to BRL 3.5 billion in 2020.

Small and medium-sized enterprises play a fundamental role in the economy of our country, making up about a third of the national GDP, and today most of these companies that work with sales are present in the digital environment. Therefore, we understand that it is important to continue to invest and develop cutting-edge technology to reduce the effects of fraud, contributing to the health of these businesses.

Tom Canabarro, Director of Anti-Fraud at Boa Vista.