THE BALANCING ACT

Minimize Fraud. Minimize Costs. Maximize Revenue.

2016 eCommerce Fraud Report: Middle East and Africa Edition
1 INTRODUCTION
The Balancing Act of Fraud Management

2 METHODOLOGY
About the Survey and Respondents

5 1. L EARN TO FIND
THE RIGHT BALANCE
Balanced Fraud Management
Calls For Optimized Fraud Operations

11 2. LEARN TO RECOGNIZE
YOUR CUSTOMERS BEHAVIOR
Optimizing Fraud Management
For Genuine Customers

21 3. L EARN WHEN AND

WHEN NOT TO REVIEW
Optimizing Fraud Management Through
More Efficient Manual Review

27 4. L EARN TO ACT
SMART ON THE MOVE

Optimizing Fraud Management
Across Multiple Channels

35 5. L EARN TO LIVE
WITHOUT BORDERS
Managing Fraud Internationally

40 CONCLUSION
 INTRODUCTION: THE BALANCING ACT OF FRAUD MANAGEMENT

To minimize fraud losses, you need

to reduce the number of fraudulent
transactions going through your systems,
through accurate fraud detection.
To maximize revenues, you need
to be able to recognize genuine orders
and process them efficiently. At the same
time, you want to keep the operational costs
of fraud management as low as possible.

Minimizing fraud, maximizing revenues, and

minimizing operational costs are the three pillars
ctio S

of a successful fraud management balancing act.

MA uine O
ete LOS

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The desire to strike a better balance between

te F FRA
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all three areas of fraud management is revealed

RE epta

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Ac MIZE

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by responses to this surveyour first among

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BALANCING businesses in the Middle East and Africa. In many

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instances, the survey uncovers challenges and

ACT priorities which are similar to those expressed by
respondents to our most recent research surveys
carried out in the UK1 and North America2.
MINIMIZE
OPERATIONAL COSTS
Efficiency

1
CyberSource, The Balancing Act, 2016 UK eCommerce Fraud Report
2
CyberSource, Annual Fraud Benchmark Report: A Balancing Act, North America Edition 2016

2016 eCommerce Fraud Report: Middle East and Africa Edition 1

|ntroduction
METHODOLOGY: ABOUT THE SURVEY AND RESPONDENTS

We commissioned an in-depth survey

of 102 businesses in the Middle East
and Africa to gain insight into their
challenges and priorities around managing
eCommerce and mCommerce fraud.

The survey was carried out in January and Given the complexity of the fraud management
February 2016 in conjunction with Vanson balancing act, the report also discusses fraud
Bourne, a leading independent specialist screening and prevention techniques available
in market research for the technology sector. to help you respond to risk and fraud threats
and get the balance right.
Based on the results of that survey, this report
the first CyberSource report on eCommerce
fraud management in the Middle East and Africa
summarizes the key findings.

Middle East Africa

Bahrain, Qatar, Saudi Arabia and the United Egypt, Kenya, Mauritius, Nigeria
Arab Emirates (UAE). and South Africa.

Egypt

Bahrain

Qatar
Nigeria Kenya

Saudia Arabia
United
Arab Emirates Mauritius

South Africa

2016 eCommerce Fraud Report: Middle East and Africa Edition 2

Methodology
Base Total 102. Respondents by Market Sector
Middle East 35.
South Africa 46.
Total Middle East South Africa Rest of Africa
Rest of Africa 21.

Physical goods 25% 23% 30% 19%

Travel bookings 24% 23% 24% 24%

Services, excluding travel 18% 9% 22% 24%

Digital goods & event tickets 14% 26% 7% 10%

Subscription services 11% 9% 9% 19%

Telecom 9% 11% 9% 5%

Base Total 102.

Size of Business by Estimated eCommerce Revenue
Middle East 35.
South Africa 46.
Total Middle East South Africa Rest of Africa
Rest of Africa 21.

Less than $1m 21% 20% 9% 48%

$1m $25m 43% 37% 50% 38%

More than $25m 36% 43% 41% 14%

Average annual
eCommerce revenue ($m)
$16.59 $17.79 $18.93 $9.48

For the purposes of the survey, our eCommerce
definition includes orders placed via webstore,
mobile, tablet and telephone. Specific questions
related to mCommerce include orders placed via
mobile and tablet devices only.
For comparison, respondents were also asked
to provide their estimated point of sale (POS)
revenue. Broadly speaking, eCommerce revenues
equate to approximately half of POS revenues
across the region.

Base Total 102.

Size of Business by Estimated POS Revenues
Middle East 35.
South Africa 46.
Total Middle East South Africa Rest of Africa
Rest of Africa 21.

Less than $1m 20% 17% 13% 38%

$1m $25m 36% 31% 39% 38%

$25m $50m 15% 17% 17% 5%

More than $50m 29% 34% 30% 19%

Average estimated annual
POS revenue ($m)
$32.39 $36.31 $34.50 $21.21

2016 eCommerce Fraud Report: Middle East and Africa Edition 3

Methodology
 NON-CARD PAYMENT METHODS

Non-card payment methods include cash
on delivery, bank transfers, digital wallets
and PayPal. 74% of respondents say their
businesses accept non-card payment types,
but only just over half screen all non-card
payment types for fraud.
However, there are variations per subregion:
Just 60% of Middle Eastern respondents accept
non-card payment types, but are rigorous about
screening them: only 5% say they screen none
of these transactions.
 76% of African respondents (excluding South
Africa) accept non-card payment types, but half
of those who accept them say they screen none
of these transactions.

74% of respondents
accept non-card
payment methods.
Middle East South Africa Rest of Africa
60% 83% 76%

Base Total 73. Fig 1. Screening of Non-Card Payment Transactions

Middle East 21.
South Africa 36.
Rest of Africa 16.
Do you screen non-card transactions for fraud? Total Middle East South Africa Rest of Africa
Excludes respondents whose
organizations do not accept
non-card payment methods. Yes, across all non-card payment types 53% 76% 56% 19%
Excludes dont know responses.
Yes, but only for those non-card
30% 19% 36% 31%
payment types perceived as risky

No 16% 5% 8% 50%

2016 eCommerce Fraud Report: Middle East and Africa Edition 4

Methodology
1. LEARN TO FIND
THE RIGHT BALANCE
 BALANCED FRAUD MANAGEMENT CALLS
FOR OPTIMIZED FRAUD OPERATIONS
Looking at the respondents main fraud
management challenges and their priorities
for the next 12 months, its clear that
the balancing act looms large for them.
FRAUD ITSELF IS UNDER CONTROL
Overall, losing revenue to fraud is ranked fourth
out of six challenges asked about; for respondents
in the Middle East, its the challenge of least
concern. This suggests that most respondents
feel they are reasonably well in control of the
traditional centerpiece of fraud management
minimizing fraud losses. Thats a similar finding
to our UK survey3, in which respondents indicated
that losing revenue to fraud was fifth out of the
same six challenges.
3
CyberSource, The Balancing Act, 2016 UK eCommerce Fraud Report
2016 eCommerce Fraud Report: Middle East and Africa Edition 6
BUT THE BALANCE ISNT YET RIGHT
Respondents top concern is the risk of losing
business by turning away too many genuine
customers when trying to detect fraud (50%).
This shows a concern with avoiding over-zealous
fraud management efforts which can hinder
revenue-generation efforts.
Other top concerns among respondents are:
Spending too much time manually reviewing
too many orders (44%).
Being unable to accurately measure fraud
rates/metrics by sales channel (43%), showing
a focus on the omni-channel environment.
These are the same as the top three concerns
revealed by our UK survey3 (albeit in a slightly
different order).
For respondents in Africa (excluding South
Africa), however, the picture is somewhat
different. Dependence on in-house fraud systems
straining IT resources is their joint top concern
(alongside losing business by turning away too
many good customers); while manual review
is the challenge theyre least concerned about.
Learn to Find the Right Balance
Base Total 100.
Fig 2. eCommerce Fraud Challenges of Greatest Concern
Middle East 35.
South Africa 45.
Rest of Africa 20.
Respondents could choose
13 challenges from 6 options.
Excludes dont knowresponses.

50%
Losing business by turning away too many
good customers when trying to detect fraud

Middle East South Africa Rest of Africa

51% 51% 45%

44%
Spending too much time manually
reviewing too many orders

Middle East South Africa Rest of Africa

46% 51% 25%

43%
Inability to accurately measure fraud rates/metrics
by sales channel (causing operational inefficiency)
Middle East South Africa Rest of Africa
43% 44% 40%

37%
Too much revenue being lost to fraud
Middle East South Africa Rest of Africa
23% 47% 40%

31%
Dependence on in-house fraud systems
straining IT resources

Middle East South Africa Rest of Africa

23% 31% 45%
27%
Unable to use all customer or transactional data
in our fraud management system

Middle East South Africa Rest of Africa

40% 16% 30%

2016 eCommerce Fraud Report: Middle East and Africa Edition 7

Learn to Find the Right Balance
 THE FOCUS IS ON OPTIMIZING FRAUD OPERATIONS

The survey results indicate that respondents Respondents from Africa, including South
are focused on optimizing fraud operations over Africa, are also keen to improve chargeback
the next 12 months, in order to do more than management efficiency; while respondents from
simply achieve low overall fraud rates. the Middle East also want to improve process
In particular, they want to: analytics and fraud management by channel.
Minimize the risk of turning away good
customers, especially by improving
automated detection accuracy.
Be more efficient, especially with regard
to manual review.

Base Total 100. Fig 3. Priority Areas for Improvement Over The Next 12 Months
Middle East 35.
South Africa 44.
Rest of Africa 21.
Respondents could 28% 68%
choose 14 priorities Outsourcing portions of the Improving automated detection
from 6 options. review/screening operation and sorting accuracy
Excludes dont know responses. Middle East South Africa Rest of Africa Middle East South Africa Rest of Africa
17% 39% 24% 63% 77% 57%

37%
Better managing cross/
omni-channel fraud
Middle East South Africa Rest of Africa
37% 39% 33%

55%
Streamlining manual review
tasks and workflow
Middle East South Africa Rest of Africa
51% 57% 57%

41%
Improving process analytics
Middle East South Africa Rest of Africa
49% 36% 38%

42%
Improving chargeback management efficiency
Middle East South Africa Rest of Africa
31% 48% 48%
2016 eCommerce Fraud Report: Middle East and Africa Edition 8
Learn to Find the Right Balance
 IN THE SPOTLIGHT
HOW MUCH IS BEING LOST TO FRAUD?

Overall, respondents average (mean) estimates of the percentage of their annual revenue lost to
eCommerce fraud over the previous year were broadly similar in the Middle East and South Africa
(between 5% and 6%), but higher in other African countries (over 9%).

Base Total 71. Fig 4. Percentage of Annual Revenue Lost to eCommerce Payment Fraud
Middle East 24.

6.27%
South Africa 32.
Rest of Africa 15. Total average
Excludes dont know responses.
Middle East South Africa Rest of Africa
5.01% 5.75% 9.40%

100
0 9%

10 19%

20 29%

30 39%

40 49%

50 59%

60 69%

70 79%

80 89%

90-99%

100%
80

60
% of Respondents

Total

Middle East

South Africa

Rest of Africa
40

20

0
% of Annual Revenue Lost

2016 eCommerce Fraud Report: Middle East and Africa Edition 9

In the Spotlight: How Much is Being Lost to Fraud?
 UNDERSTANDING THE TOTAL COST OF FRAUD

When estimating the total cost of eCommerce

fraud to their business, respondents include
the following elements:

Base Total 102. Fig 5. Elements Included When Estimating the Total Cost of eCommerce Fraud
Middle East 35.
South Africa 46.
Rest of Africa 21.
Respondents could select
as many factors as apply. 76% Middle East
80%
South Africa
78%
Rest of Africa
67%
All respondents. Cost of lost goods/services

56% Middle East

46%
South Africa
59%
Rest of Africa
67%
Additional fees/costs associated with the payment
transaction (e.g. chargeback fees)

47%
Middle East South Africa Rest of Africa
54% 48% 33%
Shipping and other order fulfillment costs

37% Middle East

26%
South Africa
54%
Rest of Africa
19%
Refunds/credits issued to customers who claim
fraud but did not submit a fraud chargeback claim

30%
Middle East South Africa Rest of Africa
37% 26% 29%
Order review and other risk management costs

25% Middle East

17%
South Africa
35%
Rest of Africa
14%
Estimates of revenues lost to rejecting
valid customer orders

1%
Middle East South Africa Rest of Africa
0% 0% 5%
Other costs

2016 eCommerce Fraud Report: Middle East and Africa Edition 10

In the Spotlight: How Much is Being Lost to Fraud?
2. LEARN TO RECOGNIZE
YOUR CUSTOMERS BEHAVIOR
 OPTIMIZING FRAUD MANAGEMENT FOR GENUINE CUSTOMERS

Businesses are understandably keen

to avoid doing anything that could have
a negative impact on the customer
experience. Indeed, the top concern
among survey respondents is the risk
of losing business by turning away
too many good customers when trying
to detect fraud.

GENUINE ORDER REJECTION

Businesses are generally unhappy with high
order rejection rates because they know this
usually reflects that good customers are being
turned away along with fraudsters.
Why good orders get rejected
Genuine orders may be rejected if the fraud
rules being applied in a particular channel
arent tailored to typical behavior in that
channel. (See the section Learn to Act Smart
on the Move).
One of the trends identified by our Managed Risk
Analysts is that every year, fraudsters get better
at looking like genuine customers, making it
harder to distinguish between a good and a bad
order. (See Increase Your Toolkit to Combat Clean
Fraud Learn Zone).

2016 eCommerce Fraud Report: Middle East and Africa Edition 12

Learn to Recognize Your Customers Behavior
Base Total 75.
Fig 6. eCommerce Order Rejection Rate
Middle East 26.
South Africa 33.
Percent of eCommerce orders rejected in the past 12 months due to suspicion of fraud
Rest of Africa 16.
Excludes dont know responses.

On average, respondents
rejected 8.13% of
eCommerce orders, due
to suspicion of fraud.
Middle East South Africa Rest of Africa
5.10% 8.98% 11.33%

Total Middle East South Africa Rest of Africa

0 9% 65% 81% 64% 44%
10 19% 21% 15% 24% 25%
20 29% 9% 4% 3% 31%
30 39% 3% 0% 6% 0%
40 49% 0% 0% 0% 0%
50 59% 1% 0% 3% 0%
60 69% 0% 0% 0% 0%
70 79% 0% 0% 0% 0%
80 89% 0% 0% 0% 0%
90 99% 0% 0% 0% 0%
100% 0% 0% 0% 0%
Average (mean) 8.13% 5.10% 8.98% 11.33%

2016 eCommerce Fraud Report: Middle East and Africa Edition 13

Learn to Recognize Your Customers Behavior
 Almost three-quarters (71%) of respondents
to our survey track false positives, although
the subregional picture varies. False positives are
tracked by 80% of respondents from the Middle
East and by 73% from South Africa, but by only
54% of respondents from other African countries.
Respondents who do track false positives
estimate that an average (mean) of almost 11%
of rejected orders are actually genuine. Middle
Eastern respondents estimate a much lower
average percentage (just over 3%) compared
with those from South Africa (more than 16%)
and other African countries (13%).

Base Total 59. Fig 7. Estimated False Positives

Middle East 20.
South Africa 26. Percent of orders rejected that are believed to be valid
Rest of Africa 13.
Respondents whose
organizations rejected
eCommerce orders
due to suspicion of fraud
in the past 12 months.
Excludes dont know responses.

On average, respondents
believed that 10.87%
of rejected orders were
in fact valid.
Middle East South Africa Rest of Africa
3.12% 16.61% 13%

Total Middle East South Africa Rest of Africa

0 9% 51% 70% 50% 23%
10 19% 8% 10% 4% 15%
20 29% 7% 0% 8% 15%
30 39% 2% 0% 4% 0%
40 49% 0% 0% 0% 0%
50 59% 0% 0% 0% 0%
60 69% 0% 0% 0% 0%
70 79% 0% 0% 0% 0%
80 89% 2% 0% 4% 0%
90 99% 2% 0% 4% 0%
100% 0% 0% 0% 0%
Average (mean) 10.87% 3.12% 16.61% 13%
We don't track false positives 29% 20% 27% 46%

2016 eCommerce Fraud Report: Middle East and Africa Edition 14

Learn to Recognize Your Customers Behavior

Base Total 102.
Respondents could select
very concerned, somewhat
concerned or not concerned.
Chart shows combined
responses from very concerned
and somewhat concerned.
All respondents.
Excludes dont know responses.
LEARN ZONE
4
5
TOP FRAUD ATTACKS
Respondents are concerned about many different Both of these fraud risks involve fraudsters
types of fraud attacks and risks. Overall, the top possessing enough information to impersonate
two concerns are account takeover and clean genuine customers convincingly. If businesses
fraud, with 94% of respondents very or somewhat cant distinguish fraudsters from genuine
concerned about both of them. These are the customers, they may struggle to maximize
same top concerns as respondents to our UK genuine revenue while minimizing fraud losses.
survey expressed4.
Fig 8. Fraud Risks by Level of Concern
1
94%
Clean fraud
94%
2 Account takeover
90%
3 Organised crime
4
89%
Friendly fraud
85%
5 Fraud on orders placed using alternative payment methods
6 85%
Fraud on mobile devices
83%
7 Low average ticket fraud
80%
8 Reselling physical or digital goods/services
79%
9 Cross border fraud
10
78%
Reshipping
EXTEND FRAUD MANAGEMENT TO ACCOUNT TAKEOVER
94% of respondents are very or somewhat concerned monitor, challenge or block account actions based on
about account takeover, and 82% say that the effect on rules relating to account creation, login and updates.
their business of account takeover is very or somewhat
2. You should be able to factor in data relating to
signicant, compared to other types of fraud attacks.
usernames, passwords, addresses and devices used.
Online fraud management traditionally happens only
3. Ideally you also want to be able to take into account
in relation to payment, but fraud perpetrated through
cross-merchant data, and use account takeover decisions
account takeover could potentially be prevented by
to inform your rules for payment fraud detection.
detecting suspicious account activity before any
purchase is attempted. Account takeover screening could be particularly valuable
for any business running a loyalty program. This is
To do this, look for a fraud system or service that supports
especially true in the travel industry, where trillions of
account takeover screening as well as payment fraud
loyalty points or miles worth more than $200 billion are as
management:
yet unredeemed by the genuine customers whove earned
1. Just as you build rules that govern acceptance, review them, making them a valuable target for fraudsters5.
and rejection of purchases, so you should be able to allow,
CyberSource, The Balancing Act, 2016 UK eCommerce Fraud Report
Skift, Loyalty Program Fraud Can Cost Travelers and Providers a Fortune, Nov 2014
2016 eCommerce Fraud Report: Middle East and Africa Edition 15
Learn to Recognize Your Customers Behavior
 A FULL TOOLKIT

Facing increasingly sophisticated fraudsters
better armed with clean data, fraud management
teams also need to step up in sophistication,
using new tools and techniques to distinguish
good orders from bad.
Our survey suggests this isnt happening quickly
enough in all parts of the region. Overall, only
three of 19 fraud detection tools are used by
more than half our respondents:
CVN (Card Verification Number)
Payer Authentication
Customer order history
Our surveys of other geographies show that
more fraud detection tools are used by more
than half of respondents:
UK survey6
Five of 21 fraud detection tools, including
CVN, Payer Authentication and customer
order history, are used by more than half
of respondents.
North American survey7
Nine of 21 tools, including CVN and customer
order history, are used by more than half
our respondents.

Base Total 102.

Fig 9. Tools Currently Used and Planning to be Added In Next 12 Months
Base for Other 6.
to Assess eCommerce Payment Fraud Risk
All respondents.

Current usage Plans for 2017 Stopped using tools

in the last 12 months

Validation services Address Verification Service (AVS) 40% 33% 0%

CVN (Card Verification NumberCVC2, CVV2, CID, etc.) 63% 28% 1%

Payer Authentication (3-D Secure): Verified by Visa/ 50% 39% 0%
MasterCard SecureCode/American Express SafeKey
Telephone number verification/reverse lookup 32% 31% 4%
Postal address validation services 33% 31% 4%
Google Maps lookup 35% 29% 3%
Social networking sites 31% 32% 4%
Two factor phone authentication (e.g. Telesign) 24% 35% 1%
Your proprietary Fraud scoring modelcompany specific 28% 34% 0%
data/customer history
Positive lists/whitelists 42% 24% 1%
Customer order history 61% 26% 1%
Customer website behavior/pattern analysis 40% 29% 1%
Negative lists/backlists (in-house lists) 47% 31% 1%
Order velocity monitoring 36% 40% 3%
Multi-merchant Shared negative listsshared hotlists 31% 34% 2%
data/purchase history
Multi-merchant purchase velocity/identity morphing models 31% 28% 2%
Purchase device tracing Device fingerprinting 34% 25% 5%
IP geolocation information (country, city, etc.) 37% 25% 1%
*Other (please specify) 33% 33% 33%

Many of the tools that are especially valuable

in combatting sophisticated fraud, such as
two-factor authentication and multi-merchant
data, are used by less than a third of respondents
from the Middle East and Africa. There are
variations by subregion.

*Other (please specify): Commerce developer; Google; Own app; SMS verication; Via phone calls; Visa
6
CyberSource, The Balancing Act, 2016 UK eCommerce Fraud Report
7
CyberSource, Annual Fraud Benchmark Report: A Balancing Act, North America Edition 2016

2016 eCommerce Fraud Report: Middle East and Africa Edition 16

Learn to Recognize Your Customers Behavior
 Subregional Variations

Middle East
Just two toolsCVN and customer order In the United Arab Emirates
historyare used by more than half our CVN, Payer Authentication, device fingerprinting
respondents. (Theyre also two of the tools and multi-merchant data are used by more
a small percentage of respondents stopped than half of respondents.
using over the previous 12 months). More than half of respondents plan to add
AVS, social networking sites, two-factor phone
In Saudi Arabia
authentication, in-house negative lists, order
Three tools are used by more than half
velocity monitoring and IP geolocation over
of respondents: AVS, whitelists and
the next 12 months.
customer order history.
Between 40% and 50% plan to add other
CVN is used by slightly under half of
tools, including Google Maps lookup,
respondents (47%). However, another 47%
customer website behavior/pattern analysis
plan to add it over the coming 12 months.
and multi-merchant data.
More than half of respondents plan
to add Payer Authentication, postal address
validation services, two-factor phone
authentication, company-specific fraud scoring
model, in-house negative lists and order velocity
monitoring over the next 12 months.
Between 40% and 50% plan to add other
tools, including multi-merchant data and
device fingerprinting.

South Africa
2In-house negative lists are used by more than
half of respondents in addition to CVN, Payer
Authentication and customer order history.
2The position on AVS appears mixed: 48%
use it, 33% plan to add it over the next 12
months, and 20% neither use nor plan to add it.
246% dont use, and have no plans to add,
two-factor phone authentication, and 2%
stopped using it over the past 12 months.
233% of respondents dont use or plan to add
device fingerprinting; and 9% of respondents
stopped using it over the past 12 months.

Rest of Africa
Use of fraud detection tools is generally lower AVS, two-factor phone authentication,
than among respondents from South Africa multi-merchant data, device fingerprinting
and the Middle East. and IP geolocation are among the tools more
than half say they dont use, and have no plans
CVN, customer order history, and order velocity
to add over the coming year.
monitoring are the most heavily used tools
with, respectively 67%, 57% and 48% of
respondents saying they use them.
Payer Authentication currently has a fairly low
usage rate among respondents29%which
is considerably lower than in South Africa and
Middle Eastern countries; but 67% plan to add
it over the next 12 months.

2016 eCommerce Fraud Report: Middle East and Africa Edition 17

Learn to Recognize Your Customers Behavior
 TOOL EFFECTIVENESS
CVN and Payer Authentication, two of the three A considerably higher rate of selection for
tools used by more than half of respondents, Payer Authentication among South African
were also rated the most effective. respondents (71%).
A zero rate of selection for two-factor phone
The rating of some tools effectiveness varies
authentication and device fingerprinting
across the MEA region. Variations include:
among South African respondents.
A considerably higher rate of selection
for CVN among respondents from the
rest of Africa (86%).

Base: Respondents whose

organization currently uses at
Fig 10. Fraud Detection Tools Considered the Most Effective
least one fraud detection tool.
Respondents could select 13 tools.
Respondents only saw answers
previously selected (Fig 9).
Excludes dont know responses.
Total Middle East South Africa Rest Of Africa

Validation services CVN (Card Verification NumberCVC2, CVV2, CID, etc.) 69% 62% 66% 86%
Payer Authentication (3-D Secure): Verified by Visa/
57% 35% 71% 50%
MasterCard SecureCode/American Express SafeKey
Address Verification Service (AVS) 54% 64% 45% 60%
Telephone number verification/reverse lookup 33% 36% 32% 33%
Google Maps lookup 25% 36% 19% 25%
Postal address validation services 21% 30% 6% 50%
Social networking sites 16% 0% 24% 20%
Two factor phone authentication (e.g. Telesign) 13% 25% 0% 25%
Your proprietary Fraud scoring modelcompany specific 38% 33% 33% 60%
data/customer history
Customer order history 37% 44% 34% 33%
Positive lists/whitelists 28% 40% 18% 33%
Customer website behavior/pattern analysis 24% 29% 26% 0%
Negative lists/backlists (in-house lists) 23% 17% 29% 13%
Order velocity monitoring 14% 17% 7% 20%
Multi-merchant Multi-merchant purchase velocity/identity morphing models 28% 33% 20% 50%
data/purchase history
Shared negative listsshared hotlists 25% 44% 21% 0%
Purchase device tracing IP geolocation information (country, city, etc.) 29% 33% 28% 20%
Device fingerprinting 23% 41% 0% 25%

LEARN ZONE INCREASE YOUR TOOLKIT TO COMBAT CLEAN FRAUD

94% of respondents to our survey are very or somewhat
concerned about clean fraud (see Figure 8).
Clean fraud occurs when fraudsters have enough
accurate personal data from stolen identities and credit
cards to impersonate genuine customers convincingly.
The key to combatting clean fraud is to capture and
use additional sources of data that let you go beyond
the surface to identify fraudsters and distinguish them
from genuine customers. Here are two examples:
Cross-Merchant Data
Whatever the data being captured, the value is multiplied
many times over by cross-referencing it with other data
sources globally. No business has direct access to this
kind of information, but it is indirectly available through
some fraud management systems and services. They will
typically use this aggregated data in the base fraud scoring
algorithms for your transactions, letting you take advantage
of transaction histories that go beyond your own.
Detailed Device Fingerprinting
Fraudsters increasingly sidestep basic device
fingerprinting by using proxies to hide their real IP
address, and manipulating browser information
between transactions to make the transacting device
seem different. But a deeper dive can often uncover
inconsistencies suggesting fraud, such as a time
zone or language setting inconsistent with the location
suggested by card details and (spoofed) IP address.
Or you can use a packet inspection service, which
can determine whether the transacting device is
operating as (or through) a proxy, or has behaviors,
such as spamming or firewall scanning, associated
with machines under the control of another device.

2016 eCommerce Fraud Report: Middle East and Africa Edition 18

Learn to Recognize Your Customers Behavior
 IN THE SPOTLIGHT
3-D SECURE PAYER AUTHENTICATION

Respondents from the Middle East and Africa rate Payer Authentication (3-D Secure) as one of the
most effective tools used to assess eCommerce fraud risk. This may be because its unique among
fraud management tools in providing a liability shift for those who use it.

CONCERNS OVER CUSTOMER FRICTION

Despite its popularity in the region, our
respondents indicated there are some
concerns around 3-D Secure. Overall,
customer friction is the top concern (49%)
the same top concern as our UK survey8
revealed. This is followed by limited control
(40%) and cart abandonment (35%).
There are some variations by subregion, however:
In the Middle East, cart abandonment is the
second top concern (46%).
In South Africa, limited control (49%) is of
more concern than customer friction (42%).
Elsewhere in Africa, lack of optimization for
mobiles is the second top concern (38%).

DYNAMICALLY ENABLE 3-D SECURE

Rules-Based Payer Authentication can address
many of the concerns around 3-D Secure. This
solution gives you control over which transactions
go through the 3-D Secure step and which dont.
For example, you could create a rule to disable
3-D Secure for all orders where the card issuer
doesnt use risk-based authentication. These
issuers challenge on every order.
Knowing this, it may be worth disabling 3-D
Secure for these particular orders, while keeping
it enabled for most or all other orders (where the
risk of a challenge is low).
Rules-Based Payer Authentication provides the
flexibility to be very specific about which orders
you invoke 3-D Secure for, and which you dont.

LEARN ZONE THE BENEFITS OF RULES-BASED PAYER AUTHENTICATION

Rules-Based Payer Authentication allows you to benefit Control the Authentication Experience
from these advantages of 3-D Secure while controlling the Choose when to authenticate
purchase experience. Avoid unnecessary checkout disruption
Embed authentication in checkout
Improve Margins
Benefit from the liability shift Increase Conversion Rates
Receive lower interchange rates Reduce checkout abandonment
Minimize chargeback processing costs Accept international transactions that require
Authenticate high-risk transactions without manual 3-D Secure
order review Let authenticated transactions through

8
CyberSource, The Balancing Act, 2016 UK eCommerce Fraud Report

2016 eCommerce Fraud Report: Middle East and Africa Edition 19

In the Spotlight: 3-D Secure Payer Authentication
Base Total 101. Fig 11. Biggest Concerns About Using Payer Authentication (3-D Secure)
Middle East 35.
South Africa 45.
Rest of Africa 21.
Respondents could select 1-3
concerns out of 6.
Excludes dont know responses.

49%
Consumer friction/
poor customer experience

Middle East South Africa Rest of Africa

60% 42% 43%

40%
Limited control with how I can authenticate
Middle East South Africa Rest of Africa
34% 49% 29%

35%
Cart abandonment
Middle East South Africa Rest of Africa
46% 33% 19%

33%
Not optimized for mobiles
Middle East South Africa Rest of Africa
34% 29% 38%

33%
Reliability*
Middle East
34%
South Africa
36%
Rest of Africa
24% 10%
I have no concerns
Middle East South Africa Rest of Africa
3% 9% 24%

e.g. latency related to some issuing banks or ACS (Access Control Server) providers
*

2016 eCommerce Fraud Report: Middle East and Africa Edition 20

In the Spotlight: 3-D Secure Payer Authentication
3. LEARN WHEN
AND WHEN NOT TO REVIEW
 OPTIMIZING FRAUD MANAGEMENT THROUGH
MORE EFFICIENT MANUAL REVIEW

Across the region, respondents indicate that

spending too much time manually reviewing
too many orders is one of their top three
concerns. Manual review is typically the
largest fraud management operational cost,
so its natural that many businesses are keen
to minimize their reliance on itespecially
when budgets are expected to remain
essentially flat, as reported by our respondents.

FRAUD MANAGEMENT BUDGETS

Across the region, 44% of respondents expect

no change to their fraud management budget
over the next 12 months.
Overall, those expecting a change indicate an
average (mean) increase of 9.17% in budget.
9% of respondents in the Middle East
and 7% in South Africa actually expect
their budgets to decrease by up to 29%.

2016 eCommerce Fraud Report: Middle East and Africa Edition 22

Learn When and When Not to Review
Base Total 98.
Fig 12. Expected Fraud Management Budget Changes Over Next 12 Months
Middle East 35.
South Africa 43.

9.17%
Rest of Africa 20.
Excludes dont know responses. Total average

Middle East South Africa Rest of Africa

6.11% 10.77% 11.10%

Decrease 30 39%

Decrease 40 49%

Decrease 50 59%

Decrease 60 69%

Decrease 70 79%

Decrease 80 89%

Decrease 90 100%

Decrease > 100%

Increase > 100%

Increase 90 100%

Increase 80 89%

Increase 70 79%

Increase 60 69%

Increase 50 59%

Increase 40 49%

Increase 30 39%

Increase 20 29%

Increase 10 19%

Increase 1 9%

Decrease 1 9%

Decrease 10 19%

Decrease 20 29%
50

40

30

20

Total
% of Respondents

Middle East 10
No change
South Africa

Rest of Africa
0
Changes Over the Next 12 Months

MANUAL REVIEW RATES

64% of respondents say they manually screen South Africa
orders for fraud. 70% of respondents do manual screening,
On average, those who do manual screening and screen on average just over 19% of orders.
review almost 15% of orders.
The average time to manually review a suspicious
There are considerable variations at the order is 39 minutes.
subregional level.
Rest of Africa
Middle East 62% of respondents do manual screening,
57% of respondents screen orders manually, and screen on average almost 19% of orders.
screening on average just over 6% of orders.
The average time to manually review a suspicious
However, manual review practices vary
order is 34 minutes.
by country.
For example:
In Saudi Arabia, just 27% of respondents
do manual screening, and screen on
average just over 2% of orders.
In UAE, 71% of respondents do manual
screening, and screen on average over
9% of orders.
The average time respondents say it takes
to manually review a suspicious order
is nine minutes.

2016 eCommerce Fraud Report: Middle East and Africa Edition 23

Learn When and When Not to Review
Base Total 102. Fig 17. Percentage of eCommerce Orders Manually Screened for Fraud
Middle East 35.
South Africa 46.
Rest of Africa 21. On average, respondents
All respondents.
manually screen
None: 36%

14.67% of orders.
Middle East South Africa Rest of Africa
6.26% 19.28% 18.57%

22% screen 1 9% of orders

16% screen 10 19% of orders
9% screen 20 29% of orders

5% screen 30 39% of orders

1% screen 40 49% of orders

3% screen 50 59% of orders

2% screen 60 69% of orders

4% screen 70 79% of orders

1% screen 80 89% of orders

0% screen 90 99% of orders

2% screen 100% of orders

Middle East South Africa Rest of Africa

1 9% 34% 15% 14%
10 19% 9% 22% 14%
20 29% 9% 9% 10%
30 39% 3% 4% 10%
40 49% 0% 2% 0%
50 59% 3% 4% 0%
60 69% 0% 4% 0%
70 79% 0% 4% 10%
80 89% 0% 2% 0%
90 99% 0% 0% 0%
100% 0% 2% 5%
Average (mean) 6.26% 19.28% 18.57%
None (We do not conduct any manual reviews) 43% 30% 38%

2016 eCommerce Fraud Report: Middle East and Africa Edition 24

Learn When and When Not to Review
 BALANCING ACCEPT AND REJECT

Whether a business reviews a few or many orders,
the average accept/reject ratio after manual review
should be as close to 50:50 as possible. (See
Working Towards a 50:50 Ratio Learn Zone.)
Only 18% of respondents doing manual reviews
are accepting 40-59% of those orders, giving
them close to a 50:50 accept/reject ratio for
manual review.
The majority are either accepting or rejecting the
majority of orders they reviewalmost half (44%)
are rejecting >80% of the orders they review and
20% are accepting >80%.
Both are a strong sign that a business is reviewing
more than it needs to and could reduce review
through more effective automated screening.

Base Total 56. Fig 18. Percentage of Orders Accepted After Manual Review
Middle East 15.
South Africa 28.
Rest of Africa 13. Total average 39.54%
Excludes those whose Middle East South Africa Rest of Africa
organizations do not perform
manual review. 23.26% 41.63% 54%
Excludes dont know responses.

LEARN ZONE WORKING TOWARDS A 50:50 RATIO

On average 18%
A 50:50 ratio indicates that review is reserved for
of respondents accept 40 59%
orders that really are hard to make a decision about.
A ratio far from 50:50, indicating mostly acceptance of orders after manual review.
or rejection of reviewed orders, strongly suggests the
presence of factors that could be worked into rules
to automate many of these decisions, thereby reducing Middle East South Africa Rest of Africa
the amount of manual review required. 7% 21% 23%
Work towards a 50:50 ratio by:
Analyzing the orders that reviewers accept and reject to
find common factors (or combinations of factors) being
used to make decisions.
Turning this insight into rules which will automatically
accept or reject those types of orders.
Ensuring regular feedback between review and
rule-setting teams to create more comprehensive rules
and minimize the amount of manual review required.

Total Middle East South Africa Rest of Africa

0 9% 30% 60% 21% 15%
10 19% 14% 7% 21% 8%
20 29% 4% 7% 4% 0%
30 39% 0% 0% 0% 0%
40 49% 4% 0% 0% 15%
50 59% 14% 7% 21% 8%
60 69% 4% 0% 4% 8%
70 79% 9% 13% 4% 15%
80 89% 9% 7% 4% 23%
90 99% 9% 0% 14% 8%
100% 2% 0% 4% 0%
Average (mean) 39.54% 23.26% 41.63% 54%
We dont track 2% 0% 4% 0%

2016 eCommerce Fraud Report: Middle East and Africa Edition 25

Learn When and When Not to Review
 AUTOMATE WHAT YOU CAN

Across the region, respondents who use South Africa

automatic tools to screen orders for fraud Of those respondents who use automatic tools,
use an average of seven tools; 3% dont use on average eight tools are used; 2% use none.
any automated fraud detection tools. These
Rest of Africa
are similar findings to our UK survey9, in which
Of those respondents who use automatic tools,
respondents who use automatic tools use an
on average five tools are used; 10% use none.
average of eight tools; and 3% use none.
A well developed automated screening process
Middle East
can deliver rapid, accurate and efficient decisions
Of those respondents who use automatic tools,
about the majority of orders, leaving only the
on average seven tools are used; all respondents
most suspicious ones for the review team to
use at least one tool.
investigate manually.

Base Total 102. Fig 19. Number of Automatic Tools Used to Review Fraud
Middle East 35.
South Africa 46.
Rest of Africa 21. On average 7
All respondents. tools are used to review fraud.
40
Middle East South Africa Rest of Africa
7 8 5
30

Total 20
% of Respondents

Middle East

10
South Africa

Rest of Africa
0
0 5 10 15 20
Number of tools

LEARN ZONE MAKING THE CASE FOR AUTOMATION AND MORE EFFICIENT MANUAL REVIEW
If a business has online revenues of $5 million
per quarter, it could see total annual losses to
fraud of $1,544,860, calculated as follows:
Fraud rate of 6.83%: $341,500 per quarter
8.13% of orders are rejected, value: $406,500
per quarter
11% of those rejected orders are valid: $44,715
Therefore lost revenue per quarter:
$341,500 + $44,715 = $386,215

LEARN ZONE THREE WAYS TO MAXIMIZE YOUR REVIEW TEAMS EFFICIENCY

1. Use a case management or review workflow 2. Ensure that your fraud and review teams share
system that: knowledge about developing fraud trends. A good
Brings together all the relevant order information needed feedback loop between analysts and reviewers is vital.
on a single screen, in an easy to-understand format.
3. Train reviewers on the differences between channels
Includes links to third-party verification tools such as
and markets, and ensure that they understand which
Google maps, social media platforms, electoral registers,
information and validation sources work best for each.
telephone directories and email domain registers.
If your review team is large enough, it may be worth
Helps to prioritize orders for review based on criteria
having specialists for certain channels or markets.
such as time sensitivity (e.g. same-day delivery)
or customer profile.

9
CyberSource, The Balancing Act, 2016 UK eCommerce Fraud Report

2016 eCommerce Fraud Report: Middle East and Africa Edition 26

Learn When and When Not to Review
4. LEARN TO ACT
SMART ON THE MOVE
 OPTIMIZING FRAUD MANAGEMENT ACROSS MULTIPLE CHANNELS

The most unambiguous trend in eCommerce

is the growth of the mobile channel.
According to eMarketer10, the Middle East
and Africa region is considered one of the
worlds most vibrant and fast-growing mobile
marketsand the largest after Asia-Pacific.

eMarketer estimates that just over 606million
people in the region had at least one mobile
phone in 2015, with the total set to pass
789million in 2019.
The internet population in the region is also a
mobile-first one: in 2015, 93% of internet users
in Lebanon, Qatar, UAE, Saudi Arabia, Tunisia
and Egypt went online via a mobile phone; just
73% did so via a desktop or laptop computer11.
70% of survey respondents are ready to take
advantage of the mobile channel by offering
a mobile-optimized website, a mobile app,
or both.

10
eMarketer, http://www.emarketer.com/Article/Smartphones-Tablets-Spread-Across-Middle-East-Africa/1012989
11
eMarketer, http://www.emarketer.com/Article/Internet-Users-Middle-East-Africa-Choose-Mobile-Access/1012695

2016 eCommerce Fraud Report: Middle East and Africa Edition 28

Learn to Act Smart on the Move
 mCOMMERCE IN THE MIDDLE EAST AND AFRICA

70% of respondents support the mobile Among respondents who track eCommerce
channelmore than in either the UK (59%)12 revenue for their mobile apps, the average
or North America (52%)13. eCommerce revenues from orders submitted
Among respondents who track eCommerce that way is almost 23%.
revenues for their mobile-optimized websites,
the average eCommerce revenue from orders
submitted that way is almost 31%.

Base Total 102.

Fig 16. Order Channels Offered by Respondents
Middle East 35.
South Africa 46.
Rest of Africa 21.
All respondents.

100% Middle East

100%
South Africa
100%
Rest of Africa
100%
Web or online store

51% Middle East

69%
South Africa
46%
Rest of Africa
33%
Mobile app

47% Middle East

60%
South Africa
46%
Rest of Africa
29%
Mobile-optimized website

42% Middle East

31%
South Africa
59%
Rest of Africa
24%
Telephone/call center

37% Middle East

17%
South Africa
43%
Rest of Africa
57%
Physical store(s)/face-to-face sales

12% Middle East

9%
South Africa
17%
Rest of Africa
5%
Kiosk

Looking more closely at the mobile channel, In the Middle East and South Africa more
respondents are more likely to have just a mobile respondents have both than just one or
app than just a mobile-optimized website. the other; elsewhere in Africa none of our
respondents has both.

12
CyberSource, The Balancing Act, 2016 UK eCommerce Fraud Report
13
CyberSource, Annual Fraud Benchmark Report: A Balancing Act, North America Edition 2016

2016 eCommerce Fraud Report: Middle East and Africa Edition 29

Learn to Act Smart on the Move
Base Total 102.
Fig 17. Breakdown of Mobile Apps and Mobile Websites
Middle East 35.
South Africa 46.
Rest of Africa 21.
All respondents.

23% 19%
Mobile app (without mobile-optimized website) Mobile-optimized website (without mobile app)
Middle East South Africa Rest of Africa Middle East South Africa Rest of Africa
23% 17% 33% 14% 17% 29%

28% 30%
Both mobile app and mobile-optimized website Neither mobile app nor mobile-optimized website
Middle East South Africa Rest of Africa Middle East South Africa Rest of Africa
46% 28% 0% 17% 37% 38%

2016 eCommerce Fraud Report: Middle East and Africa Edition 30

Learn to Act Smart on the Move
Base Total 39. Fig 18. Percentage of eCommerce Revenues from Mobile-Optimized Website
Middle East 18.
South Africa 16.
Rest of Africa 5.
Respondents whose organization
has a mobile-optimized website.
Excludes dont know responses.
Total Middle East South Africa Rest of Africa
0 9% 5% 0% 13% 0%
10 19% 15% 17% 13% 20%
20 29% 21% 22% 25% 0%
30 39% 13% 17% 6% 20%

30.74%
40 49% 8% 6% 13% 0%
On average 50 59% 8% 17% 0% 0%
of respondents eCommerce revenue 60 69% 5% 6% 0% 20%
comes from mobile-optimized websites. 70 79% 5% 0% 13% 0%
80 89% 0% 0% 0% 0%
Middle East South Africa Rest of Africa
31% 29.23% 36% 90 99% 0% 0% 0% 0%
100% 0% 0% 0% 0%
Average (mean) 30.74% 31% 29.23% 36%

We dont track 21% 17% 19% 40%

Base Total 39. Fig 19. Percentage of eCommerce Revenues from Mobile App
Middle East 16.
South Africa 16.
Rest of Africa 7.
Respondents whose organization
has a mobile app. Total Middle East South Africa Rest of Africa
Excludes dont know responses. 0 9% 13% 13% 19% 0%
10 19% 18% 19% 13% 29%
20 29% 18% 19% 19% 14%
30 39% 15% 19% 19% 0%
On average 22.79% 40 49% 5% 13% 0% 0%

of respondents eCommerce 50 59% 3% 6% 0% 0%

60 69% 0% 0% 0% 0%
revenue comes from mobile app.
70 79% 3% 0% 6% 0%
Middle East South Africa Rest of Africa
80 89% 0% 0% 0% 0%
24.57% 22.25% 16.67%
90 99% 0% 0% 0% 0%
100% 0% 0% 0% 0%
Average (mean) 22.79% 24.57% 22.25% 16.67%
We dont track 26% 13% 25% 57%

2016 eCommerce Fraud Report: Middle East and Africa Edition 31

Learn to Act Smart on the Move
 YOU CANT MANAGE WHAT YOU CANT MEASURE

Fortunately many of our respondents realize this:
75% track fraud through their online store;
70% track it through their mobile-optimized
website; 57% track it through their mobile app;
and 50% through kiosks. Fraud tracking drops
below 50% for the MOTO (mail order/telephone
order) channel and in-store.
Although the overall picture indicates a high level
of tracking for payment fraud by order channel,
respondents from the Middle East and South Africa
are generally more likely to track payment fraud
than respondents from other African countries.
In these countries, the only channels in which
payment fraud is tracked are online stores
(40%) and mobile-optimized websites (100%);
and 45% of respondents dont track fraud
by order channel at all.

Base Total 97. Fig 20. Order Channels Tracked for Payment Fraud
Middle East 34.
South Africa 43.
Rest of Africa 20.

75%
Respondents only saw answers Middle East South Africa Rest of Africa
previously selected (Figure 16).
Excludes dont know responses.
85% 84% 40%
Webstore
or online store

70% Middle East

71%
South Africa
62%
Rest of Africa
100%
Mobile-optimized website

57% Middle East

74%
South Africa
57%
Rest of Africa
0%
Mobile app

50% Middle East

67%
South Africa
50%
Rest of Africa
0%
Kiosk

48% Middle East

45%
South Africa
58%
Rest of Africa
0%
Telephone/call center
or mail order channel

43% Middle East

50%
South Africa
68%
Rest of Africa
0%
Physical store(s)/
face-to-face sales

15% Middle East

3%
South Africa
12%
Rest of Africa
45%
We do not track fraud
by order channel

2016 eCommerce Fraud Report: Middle East and Africa Edition 32

Learn to Act Smart on the Move
 CHANNEL DIFFERENCES MATTER

eCommerce and mCommerce offer different
data for fraud management (or the same data
is less or more useful); and fraudsters may use
different tactics in each channel. Equally, genuine
customer behavior differs in different channels.
A big part of the challenge around optimizing
fraud management is to ensure you dont turn
away good orders by ignoring this.
The rapid growth of the mobile channel14 in the
region indicates that it merits particular attention.
The more revenue that comes via the mobile
channel, the less you want to risk sub-optimal
fraud management endangering that revenue.

THE RIGHT TOOLS FOR THE JOB

Overall, 78% of respondents with a mobile However, practices vary by subregion.

channel use existing eCommerce fraud tools
to screen orders that originate from a mobile-
optimized website or mobile app. Typically
the same fraud tools can be used, its just
their relative importance that may differ.
In particular, in contrast to the Middle East
and South Africa, the majority of respondents
from other African countries use a different
combination of tools.

14
eMarketer, http://www.emarketer.com/Article/Smartphones-Tablets-Spread-Across-Middle-East-Africa/1012989

2016 eCommerce Fraud Report: Middle East and Africa Edition 33

Learn to Act Smart on the Move
Base Total 45. Fig 21. Use of Existing eCommerce Tools to Screen Orders in the Mobile Channel
Middle East 23.
South Africa 17.
Rest of Africa 5.
Are transactions originating from your mobile website and/or app screened using the same combination
Respondents whose organization
of existing eCommerce fraud tools?
tracks payment fraud through
a mobile-optimized website or
mobile app.
Excludes dont know responses.

78% of respondents
use the same
combination
of existing eCommerce
fraud tools.
Middle East South Africa Rest of Africa
78% 88% 40%

LEARN ZONE BUILD A MOBILE FRAUD STRATEGY

As with eCommerce, the rules created for mCommerce
will depend on the data that can be captured, the
behavioral patterns and fraud trends that are understood
to be relevant, and the level of sophistication that suits
your organizations requirements and risk prole.
You dont necessarily need to achieve a high level
of sophistication immediately. Here are three simple
steps to getting started on an mCommerce fraud strategy:
1. Start tracking mobile transactions. Measuring mobile
chargeback, rejection and review rates will enable informed
decisions to be made about how and when to act.
2. Create a distinct mobile profile, even if at first the rules
applied are an exact copy of existing eCommerce rules.
3. Start capturing the device type and operating system,
even if no rules are immediately implemented, based on
the differences in fraud pressure between different devices.

2016 eCommerce Fraud Report: Middle East and Africa Edition 34

Learn to Act Smart on the Move
5. LEARN TO LIVE
WITHOUT BORDERS
 MANAGING FRAUD INTERNATIONALLY

Overall, more than three-quarters (78%)

of survey respondents plan to accept
orders from new geographic markets
in the next 12 months, and 64%
already serve customers outside their
home country. These figures are almost
identical to those revealed by our UK
survey (76% and 63% respectively)15.

In contrast, only 55% of respondents in our

North American survey say they accept orders
from outside the US and Canada16.
On average, for respondents who accept
international orders, a quarter (25.04%)
of their eCommerce orders come from outside
their home country. This is slightly lower than
among UK respondents, where 31% of total
eCommerce orders are cross-border, among
those who accept them15.

15
CyberSource, The Balancing Act, 2016 UK eCommerce Fraud Report
16
CyberSource, Annual Fraud Benchmark Report: A Balancing Act, North America Edition 2016

2016 eCommerce Fraud Report: Middle East and Africa Edition 36

Learn to Live Without Borders
Base Total 102.
Fig 22. Percentage of eCommerce Orders That Come From Outside
Middle East 35.
Respondents Home Countries
South Africa 46.
Rest of Africa 21.
All respondents.

Middle East 24.63%

On average,
respondents said
that 25.04% of their South Africa 30.35%
orders came from
outside their
home country. Rest of Africa 14.10%

Total Middle East South Africa Rest of Africa

1 9% 4% 6% 2% 5%
10 19% 7% 3% 11% 5%

20 29% 11% 17% 11% 0%

30 39% 11% 11% 13% 5%

40 49% 10% 6% 17% 0%
50 59% 5% 9% 2% 5%
60 69% 8% 6% 9% 10%
70 79% 3% 6% 2% 0%
80 89% 4% 3% 4% 5%
90 99% 0% 0% 0% 0%
100% 2% 0% 4% 0%
Average (mean) 25.04% 24.63% 30.35% 14.10%
We do not currently accept orders
36% 34% 24% 67%
from outside of our home country

Base Total 86. Fig 23. Plans to Accept Orders from New Geographical Markets
Middle East 33.
in the Next 12 Months
South Africa 34.
Rest of Africa 19.
Excludes dont know responses.
Middle East 79%

78% of respondents
plan to accept orders South Africa 85%

from new markets.

Rest of Africa 63%

2016 eCommerce Fraud Report: Middle East and Africa Edition 37

Learn to Live Without Borders
 Subregional Variations

Digging a little deeper, subregional variations are revealed.

Middle East
Of Middle Eastern respondents who accept At least a quarter of respondents accept
cross-border orders, at least half accept orders orders from the following countries outside
from other countries in the region: the Middle East:

UAE (87%) India (35%)

Saudi Arabia (70%) US (35%)

Qatar (65%) Egypt (30%)

Bahrain (52%) UK (26%)

Fewer respondents in Saudi Arabia (33%)

accept cross-border eCommerce orders than
respondents in UAE (87%). However, 67%
of Saudi Arabian respondents plan to accept
orders from new markets in the next 12 months;
87% of UAE respondents plan to do the same.

South Africa
Of South African respondents who accept cross- At least a third accept orders from the following
border orders, at least a quarter accept orders countries outside Africa:
from other African countries:

Botswana (52%) UK (60%)

Zambia (40%) Germany (49%)

Nigeria (34%) US (49%)

Kenya (31%) China (34%)

Rest of Africa
Of respondents who accept orders from outside At least a third of respondents accept orders from
their home country, more than half do so from: the following countries outside Africa:

Egypt (86%) UAE (57%)

Morocco (57%) Saudi Arabia (43%)

Kuwait (43%)

US (43%)

2016 eCommerce Fraud Report: Middle East and Africa Edition 38

Learn to Live Without Borders
 CROSS-BORDER FRAUD CONSIDERATIONS

Respondents who accept, or plan to accept, Respondents identify cross-border fraud as

cross-border orders, may face a potential
problem: the challenge of distinguishing between
fraudulent and genuine customers can be
exacerbated when serving overseas markets.
This is because lack of experience in a new
market usually means lack of knowledge and
data about local fraud patterns, and about what
constitutes normal customer behavior.
a top fraud risk:
More than half our respondents say they
experience higher fraud rates on cross-border
orders than on domestic orders.
Almost all respondents who accept, or plan
to accept, cross-border orders say that fraud
risk is a critical or somewhat important factor
when deciding whether to accept eCommerce
orders from a new market.

Base Total 83. Fig 24. Significance of Fraud Risk When Deciding to Accept eCommerce
Middle East 31.
Orders from New Markets
South Africa 38.
Rest of Africa 14.
Excludes respondents
whose organizations neither
accept nor plan to accept
cross-border orders.
Excludes dont know responses.

49% 47% 2% 0% 1%
Critical Somewhat Neither important Somewhat Not a
important nor unimportant unimportant consideration
Middle East Middle East Middle East Middle East Middle East
29% 68% 0% 0% 3%
South Africa South Africa South Africa South Africa South Africa
66% 29% 5% 0% 0%
Rest of Africa Rest of Africa Rest of Africa Rest of Africa Rest of Africa
50% 50% 0% 0% 0%

LEARN ZONE MANAGING NEW MARKETS

There are two activities businesses should undertake
in order to implement effective fraud management
rules for orders originating from international markets.
Local knowledge is key
You need to gain a deep understanding of the fraud
landscape in your new market. Local experience and
knowledge of fraudster tactics and genuine customer
behaviors, coupled with relevant transaction data,
can give you insight into effective rule creation.
One size doesnt t all
You should use a flexible fraud management tool that lets
you configure rules for different geographies separately,
so that you can treat your international orders differently
from your domestic orders.
Working with a global partner like CyberSource can
help businesses move confidently into new geographies
and effectively manage cross-border fraud. CyberSource
collects fraud data globally and has fraud analyst teams
worldwide. We make this data and expertise available
to our customers to help them address new markets
with less risk.

2016 eCommerce Fraud Report: Middle East and Africa Edition 39

Learn to Live Without Borders
CONCLUSION

Of respondents surveyed, 37% ranked losing
too much revenue to fraud as one of their top
concerns, but placed it fourth out of a possible
six options. This suggests that fraud management
is not just about reducing losses from fraud: this
activity needs to be balanced against the cost
to do so, and the effect on genuine business.
Automated fraud screening can be effective and
efficient, unless it identifies too many genuine
customers as fraudsterswhich can lead to our
respondents top concern: losing business by
turning away good customers when trying
to detect fraud. But too much manual review
can be costly and time consumingour
respondents second highest concern.
Plainly, fraud management is a challenging
balancing act, and one thats occurring in
an increasingly complex and competitive
eCommerce market.

ADDRESSING THE CHALLENGE OF THE BALANCING ACT

As this report has shown, the challenges of fraud Through these approaches and tools, businesses
management are often addressable. It is possible can find and maintain a better balance in fraud
to reduce fraud losses, operational costs and false managementreducing risk and cost, and
positives all at the same time. actively supporting revenue growth.
Optimized Fraud Management:
Uses a diverse range of toolsfrom account
screening to device fingerprinting, from
customer order history to Rules-Based Payer
Authenticationto better distinguish between
genuine and fraudulent customers.
Integrates manual review and rule-setting
to achieve a near 50:50 accept/reject ratio
on manual review for maximum efficiency.
Gives reviewers sophisticated case management
tools to improve their efficiency.
Avoids hidden vulnerabilities by working
across multiple channels while also allowing
for strategies tailored to each channel.
Integrates local knowledge and geography-
specific rules to help reduce the risks associated
with accepting international orders.

2016 eCommerce Fraud Report: Middle East and Africa Edition 40

Conclusion
HOW CYBERSOURCE CAN HELP
CyberSource provides a complete range of Rules-Based Payer Authentication
fraud management solutions to help businesses Rules-Based Payer Authentication allows you to
identify fraud faster, more accurately and with better control the customer checkout experience,
less manual intervention. Our solutions include: while still benefiting from the secure and effective
authentication process of 3-D Secure programs.
Decision Manager
With Rules-Based Payer Authentication you have
CyberSource Decision Manager is the only fraud
the flexibility to determine your authentication
management platform that uses data from the
experiences for your customers and configure
Worlds Largest Fraud Detection Radar, increasing
rules to tailor your fraud risk management.
fraud visibility more than 200 timeseven for
You decide when to authenticate or accept
top merchants. With Decision Manager you can
liability, which can result in increased revenue,
create custom rules and models across sales
improved margins and decreased fraud.
channels and geographies, all on one platform.
Account Takeover Protection
Decision Manager Replay
Account Takeover Protection defends accounts
An industry first, Decision Manager Replay
from fraudulent uses of online accounts and non-
enables you to compare various what-if fraud
payment events, while enabling you to streamline
strategies against historical data, producing
access for valuable returning customers. It can
a real-time report of likely changes to the
allow you to identify high-risk users at account
transaction disposition and fraud rate. You can
creation and login, and monitors for suspicious
now confidently quantify the impact of rule
account changes so that you can keep your
changes prior to activating them in the live
customers accounts safe.
production environment.
Managed Risk Services
CyberSource Managed Risk Analysts have deep
fraud management experience. Located globally
across six continents, our analysts are able to
detect the latest fraud trends quickly to help
minimize your fraud losses while keeping your
operations running efficiently.

2016 eCommerce Fraud Report: Middle East and Africa Edition 41

Conclusion
For more information please contact us:

+971 4 457 7200

MEA@CYBERSOURCE.COM

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This guide is intended to only provide a summary and general overview of the subject matter presented. The information is provided as is without any representations
or warranties. The information is not to be construed as legal, tax, regulatory or any other type of advice. You assume the risk of relying upon the information. Please check
with the appropriate advisors before acting upon the information. This guide is not considered CyberSource services documentation. Please contact us for information
on CyberSource services.
2016 CyberSource Corporation. All rights reserved.