The Green Sheet Online Edition
February 23, 2009 • Issue 09:02:02
Trade Show News
Standing together against online fraud
According to Tom Donlea, Executive Director of Merchant Risk Council, the security and risk management industry for brick-and-mortar retailers is well established, but the same cannot be said for the e-commerce world, where risk management resources are limited.
The Cybersource 10th Annual Online Fraud Report estimates that $4 billion in online revenue was lost to payment card fraud in 2008; merchants reported an average revenue loss of 1.4 percent. In 2000, merchants lost 3.6 percent or $1.5 billion of their online revenue to fraud.
Concerned about these losses, the Merchant Fraud Squad, founded in 2000, joined sister group the Internet Fraud Round Table to form the MRC at the end of 2002. The MRC's membership is made up mostly of merchants, but the organization has attracted business operations managers and retail loss prevention professionals who taught themselves Internet risk management strategies. Donlea said the MRC offers education and certification programs to bolster the level of security for businesses in the payments industry and enhance the careers of payments professionals.
The MRC provides fraud prevention education and offers merchants networking opportunities to share experiences and solutions for combating fraud. The group also advocates for e-commerce issues and has partnered with the FBI's Internet Crime Complaint Center and the United States Postal Inspection Service on fraud-related issues.
"The MRC is working on actually developing a dedicated position with the IC3 where we are able to bundle those cases and hand them over to law enforcement and increase the likelihood that the bad guys are going to be put away," Donlea said. "And ultimately that ties back to consumer confidence." He added that cardholders must have confidence that the systems and payment methods they're using are safe and that, when fraud happens, the culprits are caught. As more e-commerce merchants branch out internationally, the MRC is shifting to a more global focus. MRC's first think tank, the Global Leadership Forum, met in October 2008 and brought together merchants, academics, and developers of commercial safety, security and payment-acceptance products. This year's Global Leadership Forum will center on universal authentication initiatives for global e-commerce.
In addition to a resource center on its Web site, the MRC offers two to three webinars per month and holds annual conferences. The 7th Annual Merchant Risk Council e-Commerce Payments & Risk Conference, to be held in Las Vegas from March 10 to 12, 2009, will feature segments that may be of interest to ISOs and merchant level salespeople (MLSs).
- Solutions for digital merchants
- Solutions for hard goods merchants
- Key trends in online security
- Managing risk to maximize revenue
- Developing a community-based approach to fraud management
- An update on the Payment Card Industry Security Standards Council
Information gained at this event may provide ISOs and MLSs with the knowledge to answer merchants' risk management questions in a more educated and detailed fashion. Having up-to-date information on the risk management landscape may be the value-added service that keeps merchants sticky. And payments professionals interested in learning more about the fight against fraud may wish to find out what the MRC has to offer.
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