Fortify Your Business With Zuora Fraud Protection

Digital transactions are the backbone of business operations. Therefore, the surge in payment fraud has become a critical concern for companies worldwide.

Recent research reveals that among the companies with global annual revenues over US$10 billion, 52% experienced fraud in 2020 and 2021^[i].

As fraudulent schemes become more sophisticated by exploiting payment system vulnerabilities, it’s imperative for businesses, especially those operating on subscription-based models, to fortify their defenses.

Enter Zuora Fraud Protection, a collaboration between Zuora and Microsoft Dynamics 365 Fraud Protection, designed to be the shield against the financial onslaught of fraudsters.

Understanding Payment Fraud and Its Impact

Payment fraud, in its essence, is a financial deception involving false payment information or unauthorized access to card details. Given the advancement in technology, fraudulent attempts often involve users attempting to siphon funds through small, incremental transactions, leveraging incorrect or misleading information to exploit vulnerabilities in payment systems.

Types of payment fraud include credit card fraud, debit card fraud, mobile payment fraud, refund fraud, and card testing fraud. These can lead to:

• Loss of Payment Information
• Higher Chargeback Rates
• Financial Loss
• Operational Disruption
• Legal Consequences

Zuora’s Fraud Protection: The Guardian of Your Transactions

Zuora’s Fraud Protection is a cloud-based solution tailored to counteract the threats of payment fraud within the subscription ecosystem. Whether you offer SaaS, an eCommerce platform, or a content streaming service, this feature provides a proactive defense, ensuring the security and integrity of your transactions. By integrating with Microsoft Dynamics 365 Fraud Protection, Zuora offers a dual-configuration method involving Zuora-hosted payment method pages and operations through Zuora’s payment UI, APIs, or payment runs.

Key Features and Benefits

Zuora Fraud Protection, enhanced through collaboration with Microsoft Dynamics 365 Fraud Protection, offers a suite of features designed to provide a comprehensive defense against payment fraud for subscription-based businesses.

Here’s a deeper dive into its key features and the benefits they bring:

1. Reduce Operational Expenses

Zuora Fraud Protection serves as a proactive barrier against fraudulent activities, reducing the risk of financial losses from unauthorized transactions. Its precise ability to identify and flag potential fraud decreases the need for extensive manual reviews. This efficiency not only streamlines operational processes but also reduces expenses associated with manual intervention. Consequently, businesses can allocate resources more effectively, focusing on cases that truly need attention.

2. Real-Time Threat Detection

The Zuora Fraud Protection system utilizes adaptive AI technology that operates in real-time, quickly identifying and flagging suspicious activities as they happen. It continuously learns from transaction patterns and user behavior to prevent suspicious activities. Additionally, this capability significantly boosts bank acceptance rates by accurately identifying legitimate transactions. An increased acceptance rate ensures that valid transactions are processed successfully, directly contributing to higher revenue and reducing fraudulent transactions.

3. Seamless Customer Experience

Zuora Fraud Protection is engineered to minimize disruptions in the subscription experience. By enhancing the screening of transactions during payment method creation, the system accurately differentiates between legitimate and fraudulent transactions. This reduction in transaction challenges leads to a smoother subscription journey. Businesses have the opportunity to fine-tune Zuora Fraud Protection rules to diminish friction in the subscription process, thereby preventing fraudulent transactions and fostering a more seamless, user-friendly experience for their customers.

4. Geolocation Verification and Velocity Checks

By utilizing geolocation and IP address verification, Zuora Fraud Protection introduces an added layer of security, ensuring that users access your services from anticipated regions. This feature is crucial for identifying and preventing scenarios where a fraudster might use a single card multiple times or when multiple users attempt to use one card with different logins. With Zuora Fraud Protection, businesses can set specific parameters to monitor such activities. It also incorporates a Device Fingerprinting feature, which provides data on electronic devices to further identify and prevent fraud.

Implementing Zuora Fraud Protection: Best Practices

• Review and Customize Settings: Start by thoroughly reviewing Zuora’s Fraud Protection documentation. Tailor the settings to meet your specific business needs by leveraging the configurable rules and parameters available. This can involve setting rules based on email IDs or defining conditions within rule configurations to ensure a fit that’s just right for your operation.
• Collaborate with External Services: Don’t hesitate to explore how integrating external fraud protection services can complement Zuora’s capabilities. This approach can significantly enhance the depth and accuracy of your threat detection efforts, creating a more robust defense against fraud.
• Regular Monitoring and Analysis: Check the Fraud Protection dashboard routinely. Regular analysis of reports and alerts is crucial for staying ahead of potential risks. Zuora offers features like Blocks and Watch Lists, which can be invaluable for managing and overturning false positives—ensuring that legitimate users aren’t unfairly blocked from your services.
• Continuous Optimization: Recognize that fraud patterns are always changing, and your defense strategy should evolve accordingly. Keep refining your fraud protection setup based on insights from real-world data and continuous monitoring. This includes adjusting to new fraud trends by modifying settings related to velocity checks, country restrictions, and risk score thresholds.
• Real-World Application: Imagine your business as a subscription-based e-commerce platform using Zuora Fraud Protection. The system, in real-time, identifies a surge in transactions from an area known for fraud. Thanks to its adaptive machine learning algorithms, it quickly adjusts to this emerging pattern, sending out alerts and halting potential fraud in its tracks, thus safeguarding your revenue and customer trust.

How to Configure Fraud Protection Service

The setup process involves configuring IDs in Microsoft Dynamics 365 Fraud Protection and then configuring the fraud protection service in Zuora. This includes setting up screening for card and non-card transactions across various interfaces and enabling automatic chargeback data uploads to train Microsoft’s machine-learning model for optimum efficacy.

Configuring the Fraud Protection Service in Zuora

After setting up the fraud protection service in Microsoft, follow these steps to configure it within Zuora:

1. Access Payment Settings:

• Click on your username in the upper right corner.
• Navigate to Settings > Payments.

2. Initiate Configuration:

• Select Configure Fraud Protection Services to open the configuration page.

3. Edit Settings:

• Click on Edit to modify the fraud protection settings.

4. Select Data Types to Screen:

Choose the types of transactions you want the fraud protection service to screen. Your options include:

• Card transactions initiated through hosted payment pages.
• Non-card transactions (such as Bank Transfer and ACH) initiated through hosted payment pages.
• Card transactions conducted via Zuora’s UI, APIs, or payment runs.
• Non-card transactions (Bank Transfer and ACH) conducted via Zuora’s UI, APIs, or payment runs.

5. Enable Chargeback Data Uploads:

• If you wish to utilize your chargeback data in Zuora for Microsoft’s machine-learning model training, select Enable automatic chargeback data uploads. This helps in enhancing the model’s effectiveness by incorporating your specific data.

6. Save Your Configuration:

• Once you’ve made your selections and adjustments, click Save to apply your fraud protection settings.

Configuring Fraud Protection in Microsoft Dynamics 365

To set up fraud protection rules in Microsoft Dynamics 365, follow these streamlined steps:

1. Access Rule Configuration:

Look for the Rule Configuration option on the left side of the screen. This is where you can define rules for identifying fraudulent payments within Dynamics 365 Fraud Protection.

2. Create New Rules:

From the Rule Configuration menu, navigate to Rules. Then, select New Rule to start defining a new fraud detection rule.

3. Modify Existing Rules:

To adjust settings for an existing rule, follow the same pathway: Rules Configuration > Rule. Here, choose Rule Settings to make changes to the criteria or actions of your current rules.

Conclusion

Zuora Fraud Protection offers a strategic advantage that safeguards your business against financial losses, enhances operational efficiency, and ensures a seamless experience for your customers.

By adopting Zuora Fraud Protection, businesses can not only protect themselves from the ever-evolving threats of payment fraud but also foster trust and satisfaction among their customer base, securing their position in the competitive landscape of subscription-based services.

Secure Your Subscription Business Against Fraud Today. Let’s Talk!

Statistics Reference:

^[i] PWC