Insights of Sirish Kumar on payment gateways and on starting your eCommerce business in the GCC region

Mr. Kumar is the CEO of TELR and former CFO for PayPal in ASEAN and India. He sees the main challenge for payment gateways in eCommerce to protect the store owner from fraudulent buyers. TELR is a payment gateway that handles payments from local and international customers. It offers merchants one simple integration to accept multiple currencies for business on social media, websites, and mobile apps.

Integrate gateways into your social selling

A payment gateway is the key to making the shopping experience for the buyers as enjoyable as possible. A seamless integration of the existing shop concepts is crucial. Especially the upcoming new model of social selling requires a quick and easy way to pay. In social selling, the products were offered via a facebook page, or you could create selling opportunities directly from your Instagram account. In this way, a simple social media presence turns into a point of sale.

Be aware of identity theft

While the merchant focuses on marketing and getting the right products for her customers, there are buyers that don’t respect a good deal. They claim the product was not delivered, abuse return policies, or claim the item is not as described. Even more malicious buyers use identity theft to scam the merchant. Identity theft comprises a staggering 71 percent of all fraud activity.

The Genuine Buyer

But how to find the genuine buyers? A payment gateway provides a full anti-fraud solution. The gateway utilizes a lot of methods and tools to protect the merchant. One important method is the Address Verification Services (AVS). The AVS checks if the delivery address matches the one on file at the card issuing bank. Another basic requirement is Card Verification Value (CVV). A code connected to each credit card that is not stored digitally. And then there are a lot of public and secret methods like device identification, flagging of large transactions, payer authentication (3-D secure), restrictions for high-risk countries, lockout mechanisms, and risk scoring.

Get your basic store up and running

For the new entrepreneurs, these problems seem not so pressing at the start of their business as Mr. Kumar states. They need to focus on getting their basic store up and running. A starting business needs to generate revenue, and then, in the next steps grow internationally. When a shop only processes a few orders a day the risk of fraud seem manageable. But when you scale up and you’re facing 500 transactions a day, a problem with credit card payments could become very risky and expensive in the case of frauds.

Choose the right payment solution

But what are the special challenges in the GCC Region? Telr made it to the number one spot of payment gateways in the UAE because it is addressing the needs of local customers and merchants. The payment market is very fragmented and there are a lot of cultural differences between the countries. In the UAE there are a total of 13 wallets to choose from, and they’re backed mostly by credit card. A completely different picture you see when you’re looking at Saudi Arabia, where cash is still king. In general payment integrations and gateways are still a big challenge in the region. There are so many payment gateway integration options available in the market, that some merchants integrate multiple payment gateways in their shops. So, it stays difficult to decide which payment gateway will befit your online store. Due to the massive use of credit cards in the UAE, you should choose a solution that provides complete fraud protection included in your service plan.

Recognizing Common Fraud Tactics in E-commerce

Fraudulent buyers can pose a serious risk to your e-commerce business. With the rise of online shopping, fraud tactics have become more sophisticated, making it harder to detect and prevent. As a business owner, staying vigilant and recognizing the signs of fraud is essential for safeguarding your profits and reputation. In this section, we’ll dive into some of the most common fraud tactics in e-commerce and how you can identify them before it’s too late.

One of the primary tactics used by fraudulent buyers is payment fraud. This typically involves stolen credit card information or using a fake identity to make purchases. These transactions might initially appear legitimate, but they often come with red flags like unusually large orders, rush shipping requests, or discrepancies in billing and shipping addresses. Fraudulent buyers will often try to push through high-value purchases quickly, taking advantage of the fact that many e-commerce businesses prioritize fast processing over verification.

Another common fraud tactic is account takeover. Here, a fraudster gains unauthorized access to a customer’s account, usually by obtaining login details through phishing or data breaches. Once inside, they might place orders using the victim's stored payment information. This can lead to significant losses, as it may go unnoticed until the buyer contests the charge or the account holder realizes the activity. For businesses, fraud detection systems must constantly monitor for unusual account activity, such as frequent login attempts or sudden changes in account details.

Then, there’s refund fraud, which is often harder to detect. Fraudulent buyers will purchase items, use them for a short time, and then return them for a refund, claiming the product is faulty or unsatisfactory. This tactic is particularly common in industries like electronics and apparel, where items are often returned after minimal use. To combat this, e-commerce businesses need to implement strict return policies and keep track of patterns in customer returns.

Finally, identity fraud is a tactic where fraudsters use stolen or fake identities to make fraudulent purchases. This is often seen in situations where international transactions are involved, or when customers purchase high-ticket items without being able to provide verifiable information. It's crucial to have systems in place that can validate customer identities, especially in markets where fraud is more prevalent.

For e-commerce fraud prevention, it’s important to have a strategy in place to recognize these common tactics. This includes using reliable fraud detection tools that can analyze transaction patterns, validate payment methods, and flag suspicious activity. Partnering with trusted services like GO-Globe can also help you identify potential fraud risks early and take action before it affects your bottom line.