"RBI has mandated 2-factor authentication for net banking transactions"

Nishanth Chandran is the Co-founder and CEO of E-Billing Solutions (p) Ltd (EBS), now an Ogone group company.Under his leadership, EBS now has more than 56+ payment options with an uptime of 99.999% and less than 0.001% of online fraud in its entire network of 4000+ merchants.

Since online transaction is increasing day by day. How do you perceive the need to have a strong anti-fraud solution

Although, the Reserve Bank of India (RBI) has mandated 2-factor authentication for net banking transactions and 3D secure for all Credit Cards transactions, which protects both the merchants & customers from fraud, merchants need to additionally implement a sophisticated tool to prevent fraud for three main reasons:

-13D secure relies on the card issuers to implement strong authentication mechanisms but some have failed to do so, leading to vulnerabilities.

-2- Besides cards, Indian merchants accept transactions for which they offer cash on delivery without typically screening them online. This leads to huge rates of returns, inefficient delivery, loss of time and of money.

-3All industries have unique patterns and each merchant has specificity that need to be taken into account for an efficient fraud management system. Just one example: how often is it reasonable to buy the kind of goods the merchant is selling? If the merchant sells digital songs, it is very likely that some customers may come several times a day and buy songs. For Louis Vuitton bags, it is relatively unlikely that the same customer comes 3 or 4 times in a day to buy one or several bags. The two situations need to be treated differently!

What is the adaption of such solution in the industry and which sector?

 

Every industry suffers a unique kind of fraud, and companies like EBS are currently offering focused solutions with industry specific rules which are tailor made. These rules work in conjunction with tools: Device Finger Printing solution & Transaction Behavior mapping with velocity checks.

What sets this integrated solution apart is a set of up to 1000,000+ rules have been configured for each industry,  and based on the industry type and inputs it can give a risk score in real time based on the probability of  fraud . What's more is this solution can work on a standalone basis which can be easily plugged into any current payment system..

EBS has currently employed this solution for over 6000+ merchants in India and about 10000+ merchants globally across various sectors.

 

How does EBS prevention intelligent solution work?

EBS Risk Management Solution (RMS) uses the latest tools to fraud detection include Device Finger Printing Solution & Transaction Behavior Mapping called Nexus.

Device Finger printing, tracks the physical device in real time: it is relatively easy for a fraudster to change the name or address or email for each transaction. With limited IT skills the same fraudster can hide his proxy or change IP for each transaction. But changing the device for each transaction becomes cumbersome.

Let us take a scenario:

Mr. Raj, does a transaction from Delhi while Ms. Sneha does a transaction from Kerela. Although their locations and names are different our solution can detect when the device which is being used is the same and this helps in detection of frauds.

Transaction Behavior Mapping (also called as Nexus) uses Artificial Intelligence (AI) which maps the behavior between various elements of a transaction and gives a risk score based on the risk associated with the transaction. This enables merchants to accept low risk transactions and reject the ones with higher risk.

Companies like EBS are making the life of such fraudsters much more difficult, as a fraudster can use multiple cards but cannot use multiple devices as most transactions are of minor ticket values.