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Chargebacks911 executive advocates for biometrics to prevent ecommerce fraud


Dispute mitigation and loss prevention firm Chargebacks911 co-founder and COO Monica Eaton-Cardone is advocating for biometric data to be accepted in ecommerce chargeback disputes. She also expresses disappointment that while point-of-sale fraud has decreased in recent years, and card-not-present (CNP) fraud is steadily rising, credit card companies and banks are continuing to invest in POS biometric tools rather than ones for CNP transactions.

Eaton-Cardone cautions that while biometrics can be a powerful weapon against fraud, privacy and security issues need to be resolved, the company says in an announcement.

“The payments industry is abuzz over the potential for biometrics to thwart fraudsters and drastically reduce fraud losses; yet we still have a long way to go before that potential is fully realized,” asserts Eaton-Cardone. “Though biometrics now come standard on new mobile devices, it could take years before merchants, payment processors and acquiring banks are able to update their systems to collect and process that data. Furthermore, some consumers may have privacy concerns and balk at having their image or fingerprints stored in a database, which could delay widespread adoption. And if biometrics databases are ever breached, the results could be catastrophic for consumers—so liability issues and security risks must be addressed before biometrics-based authentication rolls out industry-wide.”

Eaton-Cardone says that no major card company or bank has rolled out biometric tools specifically for CNP merchants, and that there are no estimates available of the technology’s potential impact on mounting CNP fraud losses.

“eCommerce merchants could benefit tremendously from biometrics technology. Not only does it have the potential to reduce both criminal fraud and friendly fraud, but it can also minimize false declines and ensure that valid orders are approved and processed in a timely manner,” she says. “However, these benefits cannot be realized unless banks and card networks are willing to work with merchants. Rather than focusing solely on protecting consumers, developing POS tools and preventing criminal fraud, card networks should also leverage biometrics to help CNP retailers fight chargeback fraud. If biometric data shows that a customer placed and received an order, the card network should accept it as proof that the transaction is legitimate and subsequently place the burden of proof on the customer rather than the merchant.”

Eaton-Cardone advises CNP merchants to proactively take steps such as using address and IP verification on all orders to tag suspicious transactions until biometric authentication reaches the mainstream.

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