E-Commerce: Cartes Bancaires Unveils a New Fraud Prevention Tool

E-Commerce: Cartes Bancaires Unveils a New Fraud Prevention Tool

FACTS

  • Cartes Bancaires “CB” introduces a portal called Alertes CB: a solution jointly crafted with Ethoca –provider of technological services relying on partnerships between issuers and e-merchants.
  • Goals: Enabling e-merchants to cross-reference information with data from partner banks so as to detect fraud cases in real time and prevent them.
  • How it works: Alertes CB subscribing e-merchants are sent notifications as soon as their customers warn their bank that their card has been stolen, lost or that their account has been hacked. They can then stop their sales processes and avoid default payments.

Key Figures

  • In 2017, online fraud amounted to roughly €1 every €620 (or 0.16%)
  • French banks intend to bring this proportion down to 0.13% before end-2019

CHALLENGES

  • The PSD2 will be imposing new security rules as of September the 14th 2019, including generalising strong authentication mechanisms.
  • In this context, the challenge (and main difficulty) is to improve card-based e-payments’ security without hindering or complicating the purchasing process for Internet users.
  • Also, a rather “political” issue emerged: ensuring that banks and e-merchants can monitor their fraud prevention tools as well as relevantly store their customer data.
  • With this project, the French card scheme intends to provide e-merchants with a means to remedy default payments and mitigate fraud risks, while reducing the number of claims from fraud victims among their customers.

E-commerce market potential

  • In Fevad's assessments, French customers will have spent nearly $100 Bn on e-purchases by the end of 2018
  • Most of these transactions (roughly 85%) are card-based

MARKET PERSPECTIVE

  • Cartes Bancaires still plays a key part in dealing with fraud prevention. A few days ago they unveiled a service using advance transaction analytics to improve card-based e-payments’ security. This solution called FAST’R by CB has been tested by Arkéa, BNP Paribas and Société Générale.
  • The card scheme also looks into improving their range of offers as they still face competition from US giants such as Visa and Mastercard. Mastercard also introduced an AI-powered fraud prediction service.

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