13 December 2023
Marketplaces are particularly targeted by fraud attempts and are exposed to a growing risk of bank data breaches. Hence, they must do everything possible to secure their environment, ensure data protection, and guarantee safe transactions.
In this article, we offer 5 tips for limiting fraud, ensuring compliance with regulatory requirements and guaranteeing secure transactions, to provide users with the best possible payment experience.
PCI DSS (Payment Card Industry Data Security Standard) certification is a global security standard for banking data. It includes a set of requirements that must be met to improve consumer data security online. In a nutshell, it involves:
To strengthen payment security, reduce fraud and improve the customer experience, it’s necessary to apply a robust authentication procedure (SCA – Strong Customer Authentication) during transactions. This initiative is a response to the financial regulations within the European Union set out in the PSD2 (Payment Services Directive). To ensure compliance, a marketplace must use the 3D-Secure-v2 protocol, which requires at least two authentication factors to standardise and strengthen its payment control system. These factors can be:
Regarding security, one of the fundamental verification procedures concerns KYC (Know Your Customer). The marketplace must validate the sellers’ identity by gathering information to prove they are who they say they are. This is particularly important in the fight against money laundering and the financing of terrorism (LCB-FT). This procedure, which meets regulatory requirements, also ensures marketplace users’ security in the fight against financial fraud and identity theft.
The KYC obligation also applies to marketplace buyers. To achieve this, a marketplace can rely on verification processes such as buyer registration with identity and residence verification, profile validation by sellers, sending a letter with authentication codes, etc. There are many security solutions!
It’s also advisable to have a KYC team of legal and IT security experts who can control suspicious behaviour.
Transactions on marketplaces involve exchanging sensitive data and substantial amounts of money. In addition to security measures such as multi-factor authentication and data encryption, it’s crucial to inform users of the importance of data security and provide them with the proper cybersecurity practices.
The marketplace model is unique in that it concentrates large volumes of orders, so it’s important to anticipate various dispute scenarios (product quality, late delivery, non-compliance). However, there are tried and tested methods and solutions to prevent reputational risks. Each marketplace can define its dispute resolution policy to resolve disputes effectively and fairly: mediation mechanisms, arbitration methods, customer service to resolve conflicts effectively and fairly, etc.
A marketplace can define its dispute resolution policy:
The dashboard allows a marketplace to monitor marketplace activity effectively with a 360° view. By tracking transactions in real time (payment details, amounts, dates, payment status), it is possible to exploit the data and generate reports. Having accurate information and these indicators helps to reduce fraud.
Specific alerts can be configured using the dashboard to detect fraudulent transactions, enabling all accounts to be managed effectively and centrally. The leading indicators to monitor are:
In the event of alerts, it is crucial to be able to rely on a proactive team capable of responding in real-time (by blocking fraudulent transactions, for example).
To ensure compliance with standards, to provide a framework of trust, to process sensitive data and to secure payments on marketplaces; companies can use a payment service provider (PSP). This partner is responsible for all aspects of transaction compliance and security.
By combining the best verification (OCR, instant KYC), encryption and authentication (2FA) technologies, Lemonway strengthens the payment control system and limits the risks associated with fraudulent behaviour. Thanks to its robust and innovative technology, Lemonway has protected and ring-fenced the funds of several thousand platforms since 2012. All data is hosted in PCI DSS-compliant data centres in France.
Furthermore, Lemonway provides a wealth of information about transactions and the ability to configure specific alerts to optimise the detection of suspicious behaviour. Finally, the teams work alongside marketplaces to ensure the necessary responsiveness in the event of fraud, providing recommendations and solutions and limiting the spread of the threat.
As a pan-European licensed payment service provider, Lemonway guarantees its users the highest level of security and compliance with regulatory requirements. You’ve got a question? A project? Contact our teams!
