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Level up your fraud game: five areas where gaming companies can improve

Level up your fraud game: five areas where gaming companies can improve

Jeff Wade

Risk Products & Value Added Services Manager at Worldline

Working with gaming merchants gives Worldline the unique insight and expertise in the highly sophisticated and fast-moving underworld of fraud in the gaming sector. As such, we seek to help merchants identify, address, and overcome the potentially enormous financial and reputational risks associated with this rapidly expanding sector around the globe.

Gaming is a hugely popular sector and the number of players (both in the market and of the games) is expanding (with estimates putting it at €200 billion annually). Larger, more established, companies who have grown geographically are seeing huge increases in transaction numbers, while smaller and mid-tier operators are beginning to expand further in terms of geographic outreach. Additionally, new companies are emerging seemingly daily in geographical markets such as South America and Africa whereas just a few years ago, gaming as a business was ‘not a thing’.

With this expansion comes new challenges in fraud prevention. For established merchants, they must learn to operate in new markets and recognize the purchasing patterns of their new customers and the tactics of the region’s fraudsters. For new merchants, there are the usual challenges of starting a digital business but often they are doing so in markets known to have higher fraud rates in CNP transactions. In this blog I’ll share five areas gaming companies should take look at when it comes to fraud.  

1. Know your audience!

Today’s gamers are sophisticated, discerning customers and expect a smooth and secure experience when purchasing. Any additional friction (i.e. checks and balances) is equally in danger of being a turn-off for the consumer and drive players away as it is to stop a fraudster. Similarly, today’s fraudsters are sophisticated and discerning themselves leading to an arms race of prevention where legitimate customers may get caught up in the friction crossfire.

2. Multiple identity verification

To fight genuine fraudsters, employing multiple identity verification tools has been proven to significantly reduce fraud practices. This in turns helps legitimate customers avoid future friction by making themselves known to the merchant. However, acceptance and understanding of such defences differ in each geography. Being aware of these differences and the purchasing patterns that are most common and more widely accepted in each is critical. A great example is the prevalence of local payment methods. We strongly advise any merchant thinking of entering a new geographic marketplace to get expert local advice on such patterns and practices.

3. Track and monitor customer behaviour  

One of the most common difficulties in identifying good customers beyond the use of identity verification tools is unfamiliarity with customer behaviour. While the stolen payment information fraudsters use to acquire in-game currencies or ‘items of value’ can be difficult to readily identify at the time of a purchase. Nevertheless, merchants can adopt payment fraud methodologies that track and monitor the actions of their players to understand the full spectrum of behaviour expected of their player base and locate potential fraudulent deviations.

4. The in-game economy

Every gaming company is seeking to attract more players but increasingly, like in many other sectors, it is more important and easier to retain them than to win new ones. Hence, the development and significant growth of in-game economies where the players retain a personal stake in returning time and time again. However, these ‘economies’ attract ever more sophisticated and determined fraudsters to infiltrate the ecosystem.

5. Spotting emerging trends

Merchants should try and spot any trends emerging in the online gaming community within which they operate. This applies to both legitimate trends and fraudulent ones. However, keeping apace with the rapid changes in the market and the ever-changing, ever-advancing methods of fraudsters can be difficult for merchants who can get embroiled unnecessarily and expensively in allocating unnecessary time and other valuable resources with trying to ‘keep up’ with these methods. We would recommend that you source a partner with all the expertise, experience and specialist skills and market knowledge who can help you navigate these tricky and often treacherous waters.

At Worldline we aim to do a lot of the heavy lifting for our merchant customers by bringing our unparalleled expertise and consultancy to bear on your unique issues and problems. With several fraud protection tools in our armoury, our consultants can discuss and agree with the merchant what tools and services they need – and why.

Find out more about Worldline’s fraud solutions.