Due to its limited reviewing capacity, an e-commerce service needs to prioritize payments that carry the highest risk while automatically accepting the rest. To identify the payments with the highest risk, filtering mechanisms exist. Notably, rules and machine learning-based selectors exist.
Typical review rates
The typical review rate for an e-commerce service ranges between 1 and 10% of the payments. If the tolerance of the merchant for payment fraud is low, the review rate tends to be higher.
However, the review rate between an issuer and a merchant differs significantly. It is highly unlikely that an issuer can even think of manually reviewing 1% of the payments from its cardholders; more likely, it verifies 0.1% to 0.01%.
Carrying out payment verifications
Because manual reviewers won’t always know whether to accept a payment on their own, the e-commerce service may reach out to the customer for further verification. The way in which it makes the verification depends, notably, on the following:
- the merchant’s and the client’s locations;
- the forms of ID requested; and
- the type of e-commerce service.
Parts of this payment verification process are very simple, such as managing CRM. E-commerce services can figure them out themselves. Others are very advanced, so they demand expertise, particularly in digital forensics; having access to expert reviewers may be needed.