As online fraud surges, a thorough understanding of new tactics and defenses can help ISOs and processors position themselves as trusted merchant advisors, rather than mere products providers. Knowledgeable advice not only helps merchants keep fraudsters at bay, it acts as an ISO or processor’s value-add and a point of differentiation.

Statistics tell the story: Online payment fraud accounted for 1.4 percent of online revenue—approximately $3.6 billion—last year, according to a report released earlier this year by electronic payment and risk management solutions provider CyberSource. While credit card fraud as a percentage of total sales losses has trended downward since 2004, losses due to fraud are trending upward as more merchants— including small- to medium-sized players struggling to compete against their cyber-savvy counterparts—begin riding the Internet wave.

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