Shopify’s machine learning technology has helped find and flag potential fraud across its platform, helping merchants spot risky transactions more quickly. That means keeping up with a fast-growing volume of online sales. With this rapid growth, many business owners are embracing the change of another thing: a rise in fraud.
Global e-commerce fraud is forecast to cost more than a billion in 2023, up from a billion in 2022, with a 17 percent year-on-year increase. Businesses can minimize online fraud by using a chargeback cover service and setting an even lower risk tolerance, i.e., reducing the risk they would be prepared to take at peak shopping times.
Fortunately, Shopify merchants can use Shopify Fraud Control to help set risk tolerance. Shopify has the best merchandising tools to help you predict, detect, and manage fraud. These tools include machine learning, custom rules, and chargeback protection with dispute management, all at no added cost.
The Strength of Shopify’s Machine Learning Technology
To prevent e-commerce fraud, one must spot the fraudulent purchase before affecting the business’s bottom line. Shopify uses machine-learning technology to spot and flag fraud on the network and alert merchants dealing with suspicious transactions.
According to Shopify CRO, Aswathy Vasudevan, “Our supervised machine learning, trained on billions of transactions, identifies fraudulent activity accurately and fast across millions of merchants. Say goodbye to the inconvenience of fraud and safely fulfill an impressive 99.7% of orders.”
Shopify’s machine learning technology empowers real-time insights with exact data in each order. The technology has studied over 10 billion transactions made by millions of merchants to give precise details from a 360-degree viewpoint. That is where such technology comes in to help merchants accept payments safely and spot patterns earlier than smaller networks.
The system, instead, works in real-time, adapting to assess the risk level for any given payment. Shopify takes the guesswork out of determining which orders are safe by offering a risk level with insights, reducing uncertainty when processing transactions. It works as follows: Shopify collects relevant data during checkout with predictions of fraud to improve the machine learning model over time.
The technology adopts signals such as country, IP address, and customer’s behavior and payment details—more like the type of wallet they use to fish out potential fraud. Past flagged customers and past incidents informed future risk assessments.
The CRO and machine learning technology from Shopify work together to pattern every purchase from the first cart to chargebacks if merchants use Shopify Payments.
Recent Enhancements to Shopify’s Machine Learning Model
The sophistication is also on the rise with the number of bad actors. To stay ahead, Shopify continues to invest in the latest solutions for finding and stopping suspicious activity amongst merchants using Shopify machine-learning technology.
In early 2023, Shopify implemented new measures to distinguish legitimate purchasers from fraudsters better. This machine-learning algorithm is updated to correspond with all novel fraud patterns. Shopify Plus experts leverage this to provide unique signals that other providers do not have.
This underscores the need to guard merchants from fraud, significantly when increasing e-commerce sales. In these attacks, bots submit fake payments. This trend has grown since COVID-19 pushed more businesses online.
Late in 2022, our fraud and data scientists realized the escalation of card enumeration attacks on our stores, with bad actors trying up to a million attacks weekly. Using real-time data, we worked with card networks and affected merchants to deploy advanced countermeasures. This was under our e-commerce solutions to pinpoint and preclude such attacks.
Shopify has stopped over 20 million fraudulent orders, discouraging bad actors from targeting our merchants.
Kosar Jaff, Vice President of Engineering at Shopify and responsible for Commerce Trust and Integrity, said, “We know how important trust and safety are in e-commerce. We provide tools for fraud prevention to protect our merchants. From beginner basics to advanced techniques, merchants can feel confident they have the strongest ally against fraud as they scale their business.
Offering Merchants Top-Tier Fraud Protection
At Shopify, we’re deeply committed to building high-performing fraud prevention systems powered by machine learning that any business of any size can trust.
Fraud can be costly and challenging to curtail because fraudsters are highly smart and develop the latest ways of exploiting the breaches. But our complete fraud protection brings you confidence at no extra cost. You get a suite of safeguards using Shopify‘s machine learning technology.
With Shopify Payments, you can:
- Machine learning fraud analysis
- Proxy detection
- Custom rules
- White List and Black List
- 3D Secure is a secure online
- Dispute resolution management
And many more! This year, we’ve rolled out free Chargeback Protection to Shop Pay users, a previously only existing feature in Shopify Payments. We also launched Free Returns for Shop Pay orders, and by now, we’ve already saved over $13 billion in Gross Merchandise Value (GMV) for our clients.
Reduce Chargebacks with Shopify Payments
With Shopify Payments, merchants can automatically manage disputes. In the case of a chargeback, we will handle the response on their behalf, providing all the required information automatically. This will smooth things up.
Through Shopify Payments and Shopify Shipping, merchants win 18% more “product not received” chargebacks with our automated dispute response system. As mentioned earlier, you’d save money on the order, but you’d also dodge expensive chargeback fees.
Our machine learning technology, combined with human experts, ensures that you have solid support at every step. And with available Shopify Support, you are always out there with others when dealing with the pains of chargebacks.
Prevent Fraud While Maximizing Revenue
Of course, fraudulent purchases should be filtered; sometimes, people are worried that they go over the edge and generally negatively impact sales. However, this is not a problem with Shopify products.
Shopify uses machine learning technologies that exclude fraudulent buyers and facilitate genuine buyers’ completion of their purchases. It pushes the envelope to enable precise and effective fraud detection, increasing merchants’ revenue.
In 2022, with its machine learning technology, Shopify’s approval rate reached 99.7%, meaning Shopify might be effective at detecting fraud while helping merchants maximize their income.
Mignonne Gavigan, for instance, switched to Shopify Payments for this reason alone: chargebacks. Jade Sperling, Vice President of Growth and Analytics, said, “With our previous payment provider, we consistently had fraud issues. Switching to Shopify Payments made everything cleaner, easier, and more automated.”
Before, Mignonne Gavigan had used a third-party provider to put her in line for multiple chargebacks. Today, on Shopify Plus, the merchant boasts a meager 0.05% chargeback rate and has an 8:9 approval rate. Start your Shopify journey with some of the world’s most experienced Shopify Plus experts to elevate your business.
Introducing New Features
As if that weren’t exciting enough, Shopify also announced in its blog that it is very excited to invest further in fraud protection, including updated analytics and rules-based workflows.
Here’s what’s new:
Machine-learning technology: The new dashboard brings merchants new, more sophisticated capabilities to manage fraud, including fraud protection powered by machine-learning technology from Shopify. It uses rules and analytics powered by Shopify Flow.
Analytics: Now, merchants can get in-depth fraud analytics in their stores, including order risk insights, authorization rates, and chargeback analytics. This offers a 360-degree view that permits the merchant to comply with the fashion and make more intelligent choices. This is especially true for merchants working with a Shopify Plus agency in Dubai.
Rules: With JSON’s new rules feature, merchants can automate fraud management. Using Shopify Flow, merchants can create custom rules that will help determine which orders should be automatically blocked, allowed, or even marked for review.
This allows lots of flexibility for agencies that engage with an e-commerce company in Dubai. New functions make Shopify an influential best friend in fraud prevention and higher business management.
