A new edition of the annual Market Guide for Online Fraud Detection has been released by Gartner®, offering insights into the complexity of fraud detection across customer journeys while minimizing risk in today’s environment. To generate the guide, Gartner prioritizes independence and objectivity. The research is produced independently by its research organization without input or influence from any third party.
The Market Guide arrives at an opportune time — following the 2023 holiday season, businesses are under new and increased pressure from both professional and amateur fraudsters. And in 2023, there will be more scrutiny on chargeback and conversion rates as merchants fine-tune their commerce journey to minimize losses and maximize revenue. With that in mind, here are two of Forter’s key takeaways from Gartner’s latest Market Guide for 2023.
Simplify Fraud Orchestration
The report analyzes the numerous layers that comprise a successful fraud strategy among merchants in digital commerce. Today, fraud leaders must address various threats that span the entirety of the customer journey. Combatting these threats and orchestrating fraud capabilities to complement one another is no easy feat for merchants.
How can fraud teams reduce complexity? First, they can focus their energy on new and evolving threats. This requires merchants to explore and adopt technologies that automate decision-making and reduce the need for manual reviews.
Second, merchants need to seek solution providers that address critical decisions across the entire digital commerce journey, as fraudsters are striking everywhere from sign-up to checkout. At Forter, we’ve seen substantial increases in both Account Takeover (ATO) pre-purchase and Returns and Item Not Received (INR) Abuse post-purchase.
Fraud teams can invest in individual solutions that address these decisions independently, but fraud leaders will choose more holistic solutions. The latter produces more data, insight, and accuracy and reduces the burden on fraud operations.
Given a more challenging macroeconomic environment, merchants can increase their net efficiency by utilizing a holistic platform such as Forter instead of attempting to orchestrate a growing stack of legacy or niche solutions.
Pursue Superior Results
Gartner notes that native fraud solutions embedded in payment gateways are often good enough for many smaller organizations where fraud isn’t overly complex. However, that is not the case for large enterprises for a few reasons:
“A key reason for this is that many large merchants use multiple payment gateways for redundancy and authorization optimization. As such, they want to decouple fraud detection from payment gateways and have a single fraud detection platform with visibility across all transactions, regardless of payment gateway.”
Any merchant using multiple payment gateways will need to centralize fraud detection and decisions as it’s not practical to toggle between managing numerous plug-ins. Of course, the other reason is that a payment gateway cannot deliver the same results as a specialized solution.
While there are many reasons for this, let’s focus on two. First, a payment gateway’s ability to detect fraud is based only on its own dataset — or the transactions they have access to. A specialized fraud solution has access to a vast dataset, with more visibility into patterns that span systems, industries, and geographies. Second, fraud detection is not a core competency for a payment gateway. In contrast, leading prevention platforms are continuously updated by expert researchers and analysts to protect against emerging fraudster trends and tactics.
Since 2020, dozens of merchants have switched from fighting fraud with payment gateways to Forter’s trust platform. On average, those merchants have reduced chargebacks by 70-75% and decreased false declines by 60-65%*.
At Forter, we know that blocking fraud is only one part of the trust equation. The way to build lasting customer relationships is to protect their journey (and your bottom line) across every touchpoint. Forter is the only holistic platform that offers protection from account creation to checkout and returns.
How do we do it? Forter has built the largest network of online identities. With a combination of sophisticated AI and machine learning, we make decisions on more than $300B in transactions a year for some of the world’s largest commerce businesses.
We believe the purpose of the Gartner Market Guide for Online Fraud Detection is to paint a picture of the market landscape. Provided that backdrop, if you’re under pressure to deliver superior results with fewer resources in 2023, it’s time to put a new approach to the test. Run Forter for 90 days, and we’ll prove we can deliver a lower chargeback rate and higher approval rate than your current vendor.
Gartner, Market Guide for Online Fraud Detection, Akif Khan, Dan Ayoub, 12 December 2022.
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*according to Forter’s first-party data.