Payment Asia

Preemptive Fraud Management Practices for Merchants

About Anka Yip: Anka Yip, a professional web programmer and system developer, is the IT Development
Manager of Payment Asia Technology Limited. He has experience in tailor-making enterprise solutions
for years. He is now leading his IT development team to integrate emerging technologies into traditional
business models.

Anka Yip | IT Development Manager | Payment Asia

Ecommerce is no more merely the privilege enjoyed by big Merchants and enterprises had to spend USD 2.66 and around

merchants and enterprises that have massive infrastructures 2% of revenues on average for every dollar of fraud, and the

and resources. Small businesses carrying a smartphone or tablet fraud cost rose to USD 3.48 if the transactions are about digital

are already enough to join the endless network of ecommerce. goods sales or conducted primarily through remote channels,

The growth of ecommerce, however, arouses the concern of accounting to about 2.5% of revenues on average. The report

fraudulent transactions, implying that effective and qualified simply shows fraud is a lucrative business.

fraud management is also a must in minimizing the lost suffered

by merchants or businesses. Considering the special situation in The two generations of fraud monitoring
the Chinese market, Payment Asia (PA) shifts the ‘fraudgate’ from PA is a veteran in dealing with fraudulent transactions in the

standing at the rear to staying at the forefront by preemptively internet world, where the legal framework of commercial and

screening out suspected transactions. financial criminal procedures is still very challenging. When

facing online fraud, merchants may often choose to surrender, as

The management of fraud they do not find it worthwhile to spend unscalable time and legal

Fraud is commonly seen in the business world, and it is unavoi­ cost to report and claim the loss. PA is then determined to help

dable in the Internet as well. From phishing, identity theft, and the vulnerable merchants by identifying potential perpetrators in

pagejacking to merchant identity fraud, perpetrators would not preliminary stages to lower the risk of fraud.

waste any chances to take advantage of the stolen money,

personal property and sensitive information. The exponential In the beginning, PA implemented a fraud scoring system and

growth of ecommerce could transfer all the black and white offered some basic rulesets based on the database provided by

transaction records into computer servers, but it also provides merchants. Rulesets changed from time to time. Our data analysts

room for hackers and cybercriminals to deprive the information successfully and continuously identified the characteristics of

via the Internet. What businesses could do is take precautions known fraud cases and updated our rulesets. We might then block

and keep monitoring online fraudulent activities. Thus, fraud the high-risk fraud transactions based on the scores recorded by

management comes to exist and becomes the core of ecommerce our system, and later on follow up with merchants to find out more

solutions. about their involved clients. This is the first generation of PA’s

fraud management practices for merchants. ➔

The 2017 report of LexisNexis True Cost of Fraud evaluated the

effect of fraudulence activities across private businesses and

government agencies in the US, and especially in ecommerce,

financial services, and digital lending.

17 PAYMENTS AND COMMERCE MARKET GUIDE 2018 - 2019 | (Cross-border) Ecommerce

However, individual identities or information might be easily

obtained by some clusters or groups. The traditional monitoring

is not enough anymore to tackle potential fraud. Therefore, PA

is developing the second-generation technology to expand the

coverage of monitoring. We run all transactions in our models

and connect the fraud cases with cluster analysis to improve the

scoring mechanism. About Payment Asia: Established in 1999 and based in

The role of AI in detecting fraud
To process a huge amount of transaction data and to pinpoint
potential fraud, PA adopts artificial intelligence to conduct big
data analysis of past and current transaction records, as well
as to summarize the possible fraud patterns and highlight them
as parameters. The more parameters are put in the AI-driven
machine learning, the higher the threshold of fraudulence is
against cybercriminals. At the same time, business market
Hong Kong, Payment Asia is a leading ePayment and
ecommerce company across Asia, providing the most
secure and innovative technology for online and mobile
payment solutions to local and global businesses. Our
omnichannel payment solutions provide a broad range
of payment methods including credit card, debit card,
China Union Pay and eWallet which comprise the
elements of digital marketing and artificial intelligence.

changes every second, and so does the way the corresponding www.paymentasia.com
cybercriminal acts. PA would adjust the weight and choices of

parameters based on the trend of fraudulent activities to ensure

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our machine learning principles and practices are sticking to the

dynamics of ecommerce market and its fraudsters.

Until now, PA has screened hundreds of thousands of trans­

actions. The frequency of suspected fraudulent activities is

effec­tively lowered from several cases per day to one case per

several days. PA’s fraud screening helps merchants to conduct

KYC compliance that would reduce the risk of losing money and

credentials, as well as the threat of leaking sensitive information.

From quality to loyalty

Quality brings you loyalty. It is always the key to success in the

business world by offering qualified goods and services to

customers, and it is how business confidence is built. As frau­d­

ulent transactions harm merchants’ credentials and revenue,

eventually disrupting the market order, PA provides comprehensive

ecommerce solutions and goes hand in hand with merchants to

keep scam activities under control and maintain the market for

the benefit of all lawful parties. Given the potential of the Chinese

ecommerce market, PA will never stop adopting the latest

technology and combine it with our built-in market sense to secure

and drive up merchants’ businesses in China.

18 PAYMENTS AND COMMERCE MARKET GUIDE 2018 - 2019 | (Cross-border) Ecommerce