With fraud attempts up 45%1 and the number of successful fraud attempts doubled1 in the past year, it’s safe to say that e-commerce fraud is on the up. In fact, fraud is currently costing the e-commerce industry more than $250 billion in annual costs from fraudulent transactions.1

With the worldwide e-commerce market estimated to be worth $3.9 trillion2, the opportunity for fraudsters is huge and without steps to confront the issue, they will continue to make a small fortune.

Organisations are being impacted by e-commerce fraud in several ways. They are losing revenue when illegitimate transactions are made, for example, from a hacked account or using a stolen credit card; they are increasing their operating costs, detecting fraud and managing refunds; they are losing revenue and face customer satisfaction issues when a legitimate customer transaction is wrongfully logged as fraudulent.

Therefore, not surprisingly, business demand for fraud protection is growing:

  • 75% want advanced authentication and security measures3
  • 65% have experienced the same or more fraud losses in the past 12 months3
  • 69% are concerned with the number of incorrectly declined customer transactions3

Microsoft’s Fraud Challenges

Microsoft is one such business whose e-commerce business has its fraud challenges. With more than 1 billion transactions a year across its various channels, Microsoft fights against more than $1 billion in attempted fraud. It also faces further challenges with 10 to 20 percent of legitimate transactions being rejected. All this whilst trying to deliver the best shopping and purchasing experiences possible.

In response to the growing fraud problem, Microsoft developed its own fraud protection system. Named internally ‘Modern Risk’, the system reduced fraud-related costs by $76 million and increased revenue by hundreds of millions over two years. Having demonstrated its value, Microsoft released Microsoft Dynamics 365 Fraud Protection for public preview in April 2019.

Now all online retailers can use Microsoft Dynamics 365 Fraud Protection to help reduce fraud, thus boosting revenue and delivering a better buying experience to customers.

So how does Dynamics 365 Fraud Protection address these three challenges:

Addressing the challenges of e-commerce fraud


#1 Increase your revenue by decreasing wrongful rejections and increasing bank acceptance rates

Using adaptive AI technology, Microsoft Dynamics 365 Fraud Protection continuously learns and adapts from patterns while equipping fraud managers with tools to optimise fraud controls.


#2 Reduce operating costs by reducing fraud losses and manual review with fraud protection network and account creation protection

Up-to-date, shared data provides a global view of fraud activity while keeping the security of an organisation’s confidential information and shoppers' privacy a priority. Monitoring account creation, helps minimise abuse and automated attacks on customer accounts.


#3 Provide a seamless shopping experience by reducing the frequency of purchase challenges and friction with a transaction acceptance booster

Sharing transaction trust knowledge with issuing banks helps boost your bank authorisation rates.

Fraud Protection 3 Challenges
Source: Microsoft blogs, 2019/12/18/ how-to-fight-the-three-biggest-fraud-threats-in-e-commerce-purchases

Fraud Protection Data Flow Diagram
Source: Microsoft blogs, 2019/12/18/ how-to-fight-the-three-biggest-fraud-threats-in-e-commerce-purchases

To learn more about fraud and how to protect your e-commerce organisation watch the product video.

For more information on how to get started with Microsoft Dynamics 365 Fraud Protection, contact HSO.

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1 LexisNexis® Risk Solutions 2018 True Cost of FraudSM Study Retail Edition, October 2017

2 Worldwide Retail and Ecommerce Sales: eMarketer’s Estimates for 2016—2021

3The 2018 Global Fraud and Identity Report, Experian Information Solutions, 2018