The effectiveness and efficiency of the fraud detection, prevention and management processes which payment service providers must put into action, are factors which strongly influence the willingness of users to make use of electronic payment systems. They also play an important role in terms of customer satisfaction and customer loyalty.
Aware of the importance of these processes and mindful of how transaction fraud is evolving, CRIF offers a systematic and global anti-fraud approach. In the area of electronic payments (based principally, but not exclusively, on debit and credit cards) this approach involves the development, implementation and constant refinement of strategies in the following phases, with the support of a wide range of well-established solutions:
- origination phase: reduction of application fraud risk;
- transaction phase: containment and management of the risks related to the use of payment instruments;
- collection phase: minimization of write-offs.
In addition, in line with the new legislation, the CRIF approach fully reflects the basic concepts of consumer protection introduced in the aforementioned
European Directive and the very stringent regulations which are being put in place. In particular, it is interesting to focus attention on and assess the impacts of two principles of the PSD on the organizational processes of institutions:
- the right to a refund in the case of payment dispute, when the payment transaction exceeds the amount which could reasonably have been expected;
- the right to a refund within ten business days of the request, for the full amount of the payment transaction, or a justification of the refusal to refund.
The first is directly related to fraud prevention, clearly indicating the path towards “careful” authorization processes in which customer knowledge plays a fundamental role. In other words, a situation is established where the service provider must be able to evaluate the “reasonableness” of the transaction in the payment authorization phase (as well as the degree of risk), not only in relation to the similarity with known patterns of fraud, but also in relation to the deviation from previous usage patterns (transaction fraud score).
The second principle, on the other hand, dictates stringent rules for the administration of declared fraud (and more generally the denial of payment transactions made by electronic means) both in terms of the timescale and quality of service. It is therefore necessary for service providers to streamline procedures, aimed at providing a rapid assessment (collection of data and documentation in relation to the payment denial), investigation (with immediate and full sharing of information gathered by all organizations involved in the examination of the case), and closure (production of accounting records and related documents).
In order to effectively respond to the organizational needs of institutions (financial and non-financial) in their role as payment service providers, CRIF has made significant investments and developed its offering in terms of product and service plans and consultancy, with the refinement of business reference models, advanced scoring techniques and specific monitoring criteria, which are proposed for the purposes of “continuous integration”.
