{"id":4795,"date":"2020-10-01T10:16:44","date_gmt":"2020-10-01T04:46:44","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=4795"},"modified":"2025-01-06T12:59:24","modified_gmt":"2025-01-06T07:29:24","slug":"data-business-analytics-fraud-mitigation","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/data-business-analytics-fraud-mitigation\/","title":{"rendered":"How Data Empowers Our Risk Team to Mitigate Fraud"},"content":{"rendered":"

Preventing fraudulent transactions is one of the most integral aspects of digital businesses. Fintech companies, like Razorpay, pay a lot of attention to minimizing the presence of unwanted elements in their environment.<\/span><\/p>\n

For payment solutions providers, one important indicator used to quantify safety is the fraud-to-sales (FTS) ratio.<\/span><\/p>\n

The fraud-to-sales ratio is defined as:<\/span><\/p>\n

(Total volume of the transactions reported as fraudulent in a time interval)\/(Total captured volume in that time interval)\u00a0<\/span><\/p><\/blockquote>\n

Online payments are susceptible to frauds. All of us know this. Some might have even experienced this. Maybe, recently, during or after the lockdown as well.\u00a0<\/span><\/p>\n

While we saw a dip in our volumes during the lockdown period, we also saw an emergence of fraudulent activity that exploited the COVID-19 fear.<\/span><\/p>\n

An increase in frauds being reported, along with a decrease in total volumes would mean a surge in the fraud-to-sales ratio. It doesn\u2019t need to be said that an increase in FTS could be highly detrimental to a fintech company. It could lead to the loss of reputation and also invite penalties from external stakeholders.<\/span><\/p>\n

Hence, to ensure customer satisfaction in such trying times, a business must approach fraud mitigation in more ways than one. One thing we\u2019ve always ensured is that while building high-tech solutions to secure our payments flow, we do not disregard the role of our Operations team.<\/span><\/p>\n

One of the ways by which we effectively restrict fraudulent businesses or customers through our platform is by having our operations team actively monitor payment patterns and behaviours.\u00a0<\/span><\/p>\n

Whenever frauds are reported on your platform, our operations team reacts by communicating with the responsible businesses. When we aren\u2019t convinced of the business\u2019s response, we might withhold their settlements as well.\u00a0<\/span><\/p>\n

In such a manner, temporarily withholding funds from the business will help address complaints raised against them, in case we have to issue refunds. If the situation persists, the last course of action would be to deactivate the business from our platform.\u00a0<\/span><\/p>\n

It could also happen that a business is being preyed upon by fraudsters masquerading as customers. In such cases, we closely monitor them until their FTS ratio falls within permissible limits.\u00a0<\/span><\/p>\n

To do this, it is imperative to make the team data-driven. We do this by focusing on:\u00a0<\/span><\/p>\n