Top 9 Ecommerce Fraud Detection Software & Tools

As the world of commerce moves increasingly online, so do fraudsters. In fact, just short of half (47%) of ecommerce companies surveyed by Merchant Savvy said they experienced payments fraud in the past two years.

This article will evaluate the best ecommerce fraud prevention software available on the market today. 

List of Top Ecommerce Fraud Detection Software

• SEON: Reduce Chargebacks and False Positives
• Signifyd: Revenue, Abuse and Payments Protection
• Kount: 13 Years’ Worth of Business Data
• Sift: Digital Trust & Safety and Chargeback Prevention
• Cybersource: Single Platform Commerce Solution
• Arkose Labs: Script and Bot Attack Mitigation Experts
• Covery: Fraud Fighting with Blockchain Tech
• Vesta: CNP Experts with Telecoms Insight
• Nethone: Data Science-Powered Prevention

What Is Ecommerce Fraud Prevention Software?

Ecommerce fraud prevention software allows online stores to automatically accept or decline payments to mitigate the risk of chargebacks and other types of fraud. 

The software runs in the background as customers visit the eshop, browse products, create accounts, log in, make purchases, enter their details and so on. There are different touchpoints, and it’s good to keep in mind that not all available fraud prevention software covers every touchpoint. However, to be better protected, you will want to address as many as possible and, importantly, do so with the minimal amount of disruption to your customers’ shopping journey.

Top Ecommerce Fraud Prevention Software Features

All ecommerce fraud prevention software is built on more or less the same features: the ability to log data, monitor it, and assign risk scores. After this, it may block, let through or forward a customer to manual review, based on their risk score.

There are several key features worth considering:

• BIN lookup: Combined with SCA provided by payment gateways, a BIN lookup will give you more information about the type of card used. Gift cards are more likely to be linked to fraud, but a customer may use a debit or credit card for fraud as well.
• Device fingerprinting: Helps you understand how visitors connect to your site or app by inspecting their software and hardware and even creating a cookie hash, device hash and browser hash.
• Data enrichment: The process matches the information you have (say, an IP), and connects it to external databases. This lets you learn more about users without asking them to fill extra fields, making it ideal to reduce risk without adding friction.
• Custom rules: Many, but not all, ecommerce prevention software allows you to set custom rules to catch fraudsters using techniques you’ve spotted in the past. They also have blacklisting and whitelist features.
• Reverse social media lookup: An increasingly popular and effective weapon in the fight against fraud. Learning if your users have social accounts helps identify them, and reduces the risk of onboarding fraudsters with a suspicious lack of social presence online. SEON sources data from 50+ social accounts and online profiles.
• IP analysis: Giving you geolocation information as well as potential insight into any use of proxies, emulators or Tor.
• Machine learning or not: A machine learning system is another nearly essential tool in your arsenal. It can suggest risk rules based on historical data. Note that not all ML systems are created equal – for instance, in the case of whitebox vs blackbox machine learning.
• Pricing and minimum commitment: Are there “hidden” fees? Some vendors will charge for the integration, support, and extra features. Make sure your contract is transparent from the get-go. Ideally, look for ecommerce fraud detection software that offers a free trial, so you can get a feel for whether it works for you.

The 9 Best Ecommerce Fraud Prevention Software

Disclaimer: Everything in this article was gleaned from online research, including user reviews. We did not have time to manually test all the tools. However, we ensured the information was correct as of Q3 2022. Feel free to contact us to request an update/correction.

SEON – Lower Chargebacks and False Positives

From transaction fraud to return fraud and even triangulation fraud, there’s little you can’t control with SEON. The key? Leveraging the power of alternative data and dynamic friction to reduce fraud rates without slowing your customers’ purchase journey.

Here’s how it works:

As soon as shoppers arrive at your store, SEON immediately begins collecting data behind the scenes. You choose the data points to focus on and enrich, such as IP address, email address, phone number, and device. SEON also lets you check 50+ platforms and social media networks for linked profiles and open-sourced customer info. This allows you to learn hundreds of insightful data points about the customer without having to ask them, thus interrupting their shopping experience.

All the data is fed through risk rules, which are customizable. SEON also features a whitebox machine learning engine that will learn from your customers and activity and suggest new rules that will work for you in particular. As you flag more fraud cases, the system learns to recognize suspicious patterns in your particular website users.

The goal is to reduce fraud at every stage, whether it’s a login, sign up, or, of course, a payment, by giving you complete control of your risk appetite. This helps reduce false positives, but you can also use all the collected data to dispute chargebacks and prove you’re dealing with friendly fraud.

SEON Pros

• Frictionless digital footprint analysis: Aggregates real-time data from 50+ social networks and platforms so you can quickly see if you’re dealing with a real person or not and implement dynamic friction, only asking shoppers for extra information when it’s necessary.
• Spot connections between accounts: Multi-accounting and bonus abuse challenges? SEON can take down entire networks of fraudsters by highlighting links between their accounts, as well as suspicious setups.
• Flexible integration: Use SEON on its own, or pick and mix any APIs you need to integrate with your existing tech stack. Or use SEON’s Shopify app, Chrome extension, Zapier integration, or the user-friendly end-to-end Admin Panel interface.

SEON Cons

• No chargeback guarantee: SEON believes that the chargeback guarantee model is an incentive to create too many false positives. If it’s this pricing model you are after, there are better alternatives.

SEON Pricing

• Starting from $299 per month. Also, SEON lets you pay per API call, try the product for free for 14 days, and cancel anytime you want.

Choose SEON If:

• You’re looking for an intelligent solution that leverages real-time insights without interrupting the shoppers’ experience.

Signifyd – Revenue, Abuse and Payments Protection

Rajesh Ramanand and Michael Liberty met when they worked at PayPal – where they realized that allowing online payments was one thing, but protecting stores from fraud was just as important. Their solution? A fraud prevention product that calls itself the “defender of ecommerce” and promises not to treat your customers like criminals. 

Signifyd sure has found support in the online store world, as it currently protects some of the biggest retailers, such as Samsung, Philips, and Omega. 

Under the hood, the tech is broken down into four key components, namely Fraud Protection, Abuse Prevention (both powered by blackbox machine learning), Account Protection and Payments Optimization, a PSD2 compliant solution that authenticates transactions to accelerate the customer’s checkout experience.

Signifyd Pros

• Enterprise ecommerce specialists: Larger retailers should find themselves at home with Signifyd’s other clients. 
• Data enrichment: You can aggregate external data based on an email address or phone number.
• Powerful integrations: Signifyd works seamlessly with Salesforce, Shopify, and Magento. 

Signifyd Cons

• No reverse social media lookup: While you get some data enrichment, you won’t be able to learn anything from social networks and similar platforms.
• Blackbox machine learning model: Blackbox models aren’t explainable, which means that they’re not as easy to improve upon, and any false positives are not transparent.

Signifyd Pricing

• Available upon request. 

Choose Signifyd If:

• You are an enterprise that uses Salesforce, Magento or Shopify looking for a set-and-forget solution.

Kount – 13 Years’ Worth of Business Data

One of Kount’s greatest selling points is its Identity Trust Global Network, containing a whopping 23 billion data points for user actions and profiles across 250 countries and 75 industries. This data was collected in over 13 years.

Other key products include Command, the firm’s end-to-end solution for dealing with CNP transactions; Central, tailored to payment service providers; and Control, their ATO protection tool. Kount’s technology is used by world-leading online retailers such as PetSmart and Staples, but also financial institutions such as Barclays and Chase.

As a bonus point, Kount was acquired by Equifax in February 2021, which means you’re very likely to see integrations with other tools from the UK’s leading credit scoring provider in the future. 

Kount Pros

• Strong chargeback prevention focus: A lot of the data points Kount has gathered over the years are designed to point toward chargeback fraud in order to prevent it.
• Protects the entire customer journey: From signup to checkout and even authentication at login, you can calculate risk at every step.
• Customizable solution: One reason Kount works just as well for online stores as banks is that you can have complete control over how you mitigate risk.

Kount Cons

• No phone or social media lookup: You’ll get tons of data pertaining to payment, yes, but not much extra info to complete a customer profile.
• Opaque pricing: The chargeback guarantee model can be loved or loathed by online stores, but everyone agrees that hiding pricing behind sales calls is a downside.

Kount Pricing

• You’ll need to get in touch with the company directly to learn more about prices.

Choose Kount If:

• You value the intel gathered by other merchants on who’s fraudulent and who’s not.

Sift – Digital Trust & Safety and Chargeback Prevention

A Y Combinator alum with a $1 billion valuation, Sift has quickly emerged as one of the startup world’s favorite fraud protection solutions – including for online stores. It currently protects a number of renowned brands operating in the CNP space, such as Airbnb, McDonald’s, and Doordash, among others. 

The company’s key products are the Digital Trust and Safety Suite, which includes all their APIs designed to stop fraud; Account Defense, the ATO solution; Payment Protection, which combines shared databases and machine learning; and Dispute Management, specifically tailored to moderating and safeguarding content.

As you can imagine, a key advantage of having this whole suite of products is that they seamlessly integrate with each other and that most of them offer enough customization options to adapt the tools to your risk managers’ needs. 

Sift Pros

• Specialist chargeback module: It should offer peace of mind to online retailers who want to see results out-of-the-box.
• Data enrichment and machine learning: Reduce user friction by adding external data to your user profiles, and feed the results to a powerful ML system.

Sift Cons

• Blackbox AI: Sift is great at calculating risk. But how exactly? It’s not always clear, because of the opaque nature of its blackbox algorithms.
• Less-than-ideal integration: Some reviewers report lengthy deployment and difficulty in combining Sift products despite the availability of APIs.

Sift Pricing

• Available by contacting the sales team.

Choose Sift If:

• You want the option of selecting from various solutions that integrate well with each other.

Cybersource – Single Platform Commerce Solution

When it comes to gathering credit card data, you’d be right to guess that Visa is pretty good at it. This is why it would make sense for the card operator to get into the payment protection industry by acquiring Cybersource, a fraud prevention company, back in 2010 (for a whopping $2 billion).

What it means for its users is that you can get a single point of control for payment acceptance, fraud management, and transaction security. In its own words, Cybersource’s goal is to reimagine payments via seamless personalized experiences that are friendly and secure.

In practice, this is done via the standard IP and device analysis, along with behavior tracking and user authentication. The key point to note is that Cybersource takes a bit of an all-or-nothing approach, which means you’ll have to handle both payments and risk management with the company.

Cybersource Pros

• Payments and payment protection: The partnership with Visa makes it an attractive proposition if you need to start accepting payments on your site with peace of mind.
• Additional payments services: You get fraud and risk management, but also extras such as payouts, global tax calculation, and currency conversion for CNP, BNPL, e-wallets, direct debit, and more. 

Cybersource Cons

• Full integration required: Cybersource is at its best when you use it for payment acceptance and fraud prevention – meaning it’s not ideal for a multi-layered ecommerce fraud prevention approach such as a risk stack made up of various tools.
• Not suited for SMBs: Smaller online stores with low to medium-volume transactions could be deterred by Cybersource’s lengthy and expensive contracts.

Cybersource Pricing

• You’ll need to contact the company for a quote but, in general, they seem to be tailored to Enterprises.

Choose Cybersource If:

• You’re with an enterprise and work closely with Visa for payments.

Arkose Labs – Script and Bot Attack Mitigation Experts

Arkose Labs was founded in 2015 by Kevin Gosschalk and Matthew Ford, with the goal of applying to fraud detection their combined experience in machine vision technology and game development. 

The successful implementation of their vision can be seen in their trusted clientele, which includes some of the biggest names in digital media and gaming, like EA, Adobe, Dropbox, Microsoft, and Snapchat among them, as well as the popular game of Minecraft.

Three products comprise Arkose Labs’ main fraud prevention solution: Arkose Detect, Arkose Protect, and Arkose Response. With all three integrated into a company’s security stack, Arkose Labs is so confident in its ability to prevent scaled automated attacks that they offer a Service Level Agreement with up to $1 million in loss reimbursement for successful credential stuffing attacks. 

This unique level of assurance is built off the backs of the adaptive step-up challenge security architecture, where users with bot-like behavior are asked to complete puzzles to confirm they are human. This is complemented with fraud detection APIs to assess users based on their devices, IP or point of connection, and behavioral analytics like velocity checks, which are fully explainable by whitebox machine learning.

Arkose Labs Pros

• Guarantee against automated attacks: Offers ZeroBot guarantee against automated attacks, effectively controlling ATOs, website scraping, scaled new account fraudsters, and card testing.
• Reimbursement for credential stuffing losses: Up to $1 million in reimbursement for successful bot attacks.
• Anti-web scraping capability: As they specialize in automated bot attacks, Arkose Labs also offer website security to protect from data scraping.

Arkose Labs Cons

• Rulesets not immediately customizable: Arkose’s 24/7 SOC support has to be contacted to implement changes, rather than being able to adjust sensitivities in the software. 
• Requires a dedicated team: Despite automation, a dedicated fraud analyst team is necessary for it to function optimally.

Arkose Labs Pricing

• Unfortunately, this is not available online. Contact Arkose Labs’ sales team for a quote.

Choose Arkose Labs If:

• You deal with big transaction volumes and are likely to face automated attacks.

Covery – Fraud Fighting with Blockchain Tech

Covery is a Maltese company that seeks to provide total fraud prevention, from risk analysis to chargeback prevention, AML and PEP screenings. Founded by a group of experienced data scientists and risk managers, Covery’s primary goal is to provide fraud prevention that both secures ROI and gives users peace of mind when it comes to the appropriate use of their data. 

With those tenets at the forefront, Covery now boasts major clients like Dow Jones, Ondato, and Visa’s proprietary Verifi authentication service.

Inspired by the security of blockchain technology, Covery’s main fraud solution is powered by a huge database of over 400 million reputation records, which it uses to cross-check incoming traffic for fraud identifiers. Covery leverages both data-based risk scoring and reputation databases to run lookups that prevent fraud and provide other services like mitigating the cost of hard KYC checks and precluding chargebacks. 

The Covery product also boasts a high level of user-friendliness. It is easy to integrate into existing CRMs, and existing users appreciate the response time for risk decisions and the customizability of available risk rules.

Covery Pros

• Blockchain-inspired data storage: Leverages a database of 400 million risk identifiers secured by blockchain technology, called Trustchain.
• Versatile integration capabilities: Fast returns on API calls, resourceless ML model development tools.
• Clever tools to mitigate chargebacks: Costs associated with hard KYC and chargebacks are monitored by the VMPI and Ethoca chargeback prevention tools.

Covery Cons

• Potentially stale data: Although Trustchain checks are conducted in real-time, the actual information contained within does not update in real-time, and is thus less reliable than data sources that do.
• No reverse phone/email lookups: These data points can generate unique signs of a trustworthy or malicious user, such as an old family email account, or connecting via a virtual phone, respectively.

Covery Pricing

• It’s dubbed “competitive” on the website, but no pricing guide is available without speaking to Covery first.

Choose Covery If:

• You are looking for peace of mind and value all things crypto.

Vesta – CNP Experts with Telecoms Insight

Doug Fieldhouse originally founded Vesta in 1995, offering payment solutions long before the rise of ecommerce. By leveraging these decades of experience as well as modern software technology, Vesta now specializes in fraud prevention for enterprise businesses with a focus on CNP payments for telecom companies. Vesta’s clients include T-Mobile, Vodafone, AT&T, and EE. 

This vendor’s payment and fraud solutions are based on proprietary ML algorithms, device fingerprinting provided by ThreatMetrix, and patented data analysis tools that utilize a consortium data vault of over 2 trillion collected data points. The company is so confident in its fraud-stopping capabilities that it offers complete reimbursement for any transaction the system labels as valid which then turns out to be fraudulent. 

Though specializing in telecommunications, digital wallets, and airlines, Vesta is also offered downscaled, for customers who need fraud solutions for individual storefronts on Shopify or Magento. The brand’s payment guarantee model is offered in both enterprise and standard solutions.

Vesta Pros

• Moneyback guarantee: Vesta reimburses its customers for any false negatives that turn into fraud events.
• Huge proprietary databases: By partnering with big data brands, Vesta can draw on huge amounts of data for fingerprinting and risk identification.
• Extensive experience in telecoms: Offers modules specifically for CNP payments in a telecom ecosystem for both individuals and enterprises.

Vesta Cons

• No customizable risk parameters: Though the risk parameters are expert-tailored to individual companies, the risk rules cannot be adjusted on the fly.
• No pattern recognition: Insights generated by the software do not look for patterns to detect data anomalies that could indicate an attack or an entire fraud ring. 

Vesta Pricing

• Pricing info is available from the sales team.

Choose Vesta If:

• Enterprise or not, you’re a telecom that processes card-not-present payments.

Nethone – Data Science-Powered Prevention

Nethone was incubated in Daftcode’s fintech startup ecosystem. From the outset, Nethone’s vision and goal was to make the internet a “safe and more transparent place for all users”.

The company’s main software solution is Nethone Guard, which utilizes the company’s proprietary Profiler technology, gathering over 5000 data points from each user, including social media profiles and other OSINT data. Using a whitebox machine learning model, these data points are used to determine a “here-and-now” risk score during the customer journey to determine their authenticity and intentions. 

In addition to a UX that is designed to let fraud teams make the most informed decisions on manual reviews, Nethone also provides each customer with an assigned data scientist. This expert’s job is to help adjust and design ML rules that further tighten the security of any digital payment infrastructure.

Nethone Pros

• Dedicated data scientist: Customers are assigned a team member to help adjust and create custom rules.
• Whitebox machine learning: Provides fraud teams with explainable risk metrics.
• Extensive fraud databases: The Profiler tool references a huge number of collected data points, including behavioral analytics, social media accounts, as well as the expected IP and device fingerprinting.

Nethone Cons

• No free stack integration: Integrating the Nethone fraud solution product into an existing security stack comes at a premium.
• No social media profiling: Nethone does not utilize digital footprints, which can deliver clear signs of a user’s true intentions.

Nethone Pricing

• The company does not provide pricing information on the official website.

Choose Nethone If:

• You want your fraud prevention decisions to be readable and understandable by humans.

Why Invest in Extra Ecommerce Fraud Prevention Software?

Juniper Research forecasts a loss of $50.5 billion to ecommerce fraud by 2024. Every projection and all available data agree that ecommerce companies of all sizes are routine targets for fraudsters these days. Even when they are not looking to defraud you but instead just use a stolen card, it’s still merchants who will bear the brunt of it, as they will likely be asked for a chargeback by the legitimate cardholder.

Ecommerce fraud prevention is the solution, but how exactly? A handful of ways in which the technology can help include the below:

• Reduce costs and resources lost to fraud: Having the proper risk management solutions in place can help save on lost items, chargeback fees, and support time dealing with defrauded customers. That’s not to mention return fraud, triangulation fraud, and other tactics that could damage your profits in the long run.
• Maintain a reasonable chargeback rate: Payment processors will avoid working with stores that process too many chargebacks. Your business could also be downgraded to a high-risk merchant category, which will incur extra charges for processing all card payments.
• Secure your customers’ accounts: Whether you operate as an online wallet or not, fraudsters will attempt to log in with existing customer details. They may extract personal information, lock your users out, and make payments that will result in chargeback fees for you.
• Control your brand reputation: If your online store is targeted by fraudsters, you could gain a reputation as an unsafe place to shop and/or amass bad reviews online.
• Improve the efficiency of your manual reviews: While most ecommerce fraud prevention software is designed to automatically approve or decline actions (login, payment, or signups), the technology can also help your manual review team gain more information to make better-informed decisions. Some retailers even use the tools to check questions coming from the support channels, to ensure they’re not targeted by social engineering attacks.
• Improve the user experience: Deploying the right fraud detection solution can actually accelerate the checkout process. When you have risk scores that clearly show a legitimate user, you can reduce the number of verification steps required for them, which makes buying easier and faster.

Choosing the Right Ecommerce Fraud Detection Software

Online stores have always been a major target for fraudsters. And while historically they only attacked retailers dealing in high-end electronics or jewelry, these days, no ecommerce outlet is safe. 

Let’s not forget that a high chargeback rate isn’t just worrying for your bottom line; it could also put you in card network operators’ black books, which would mean a higher transaction fee on every payment.

Luckily, there is an increasing number of ecommerce fraud prevention solutions available for everyone from small to large retailers.

As for how SEON can help in particular, it does so by leveraging unique social and online footprint data. This works behind the scenes to catch suspicious users based on more than the standard steps of fraud prevention – device fingerprinting, velocity checks and IP analysis.

This means that you better and faster assess who’s real and who’s a fraudster, without introducing any friction to the customer experience.

Even further, if you choose to do so, you can use these insights to segment your users and spot high-value customers, so you can offer extras to attract and keep them happy.

FAQ

Sources

• Juniper Research: Online Payment Fraud Report 2020–2024
• Merchant Savvy: Payment Fraud Statistics