A deep dive in risk management intel

Why is risk poorly managed?

There're at least three reasons why the risk of payment fraud is poorly managed at e-commerce services.

• Because data, methods, and software is lacking
• Because of slow and ineffective decisions
• And because of limited and inconsistent reports

Part 1. Online payments

When things just work

Given the diversity of the regulations, payment methods, intermediaries, and payment scenarios available, how are payments engineered and orchestrated? In this part we review some of the payment methods used to pay for items online. We investigate the different entities that carry out payments online. And we describe the three steps required for online payments.

Part 2. Payment fraud

When things go wrong

Although the online payment process goes right most of the time, in some scenarios it fails. Some reasons why a payment may fail are legitimate, but others are not. In this part, we describe what happens when things go wrong, particularly when payment fraud occurs. We look at why things may go wrong when processing online payments. We discuss how things go wrong (the processes used to commit payment fraud). And we identify the factors influencing payment fraud.

Part 3. Preventing fraud

How to make it work

Here we focus on how to detect, manage, and prevent payment fraud when processing payments online, and we also look at the existing solutions. We first describe the landscape of fraud prevention solutions. Then we provide a bird’s-eye view of the payment fraud prevention process. We dive deep into the bits and pieces of fraud detection. And we describe the feedback loop, i.e., fraud prevention process auditing.

Part 5. The next steps

Towards risk management intelligence

We review the application of corporate financial risk management methods to prevent, detect, and manage fraud prevention for e-commerce services. We review ideal fraud detection systems for e-commerce services. We describe risk classification, the concept of escalation time, and risk ratings. We suggest to use value at risk (VAR) to pilot risk in e-commerce services.