Everyday, travel companies face lost revenues and fraudulent attempts, particularly from chargebacks. Travel fraud prevention is completely necessary to save businesses from their impending collapse.
But what’s the problem with chargebacks, exactly? To put it simply, a chargeback lets consumers refund their purchases once they cancel their booking. It’s a completely legal thing to do as long as they follow the policies.
However, with how the digital era modernizes the way consumers book travel and tickets, a new problem arises. Hospitality becomes exploited by doing online chargeback frauds. Learn how these travel payment frauds can be prevented with the right tool.
Where Travel Fraud Prevention Falls in the Booking Journey
Before knowing where exactly prevention will take place, travel companies need to learn about how customers prepare to book a trip. Before booking, they have to find the travel site, followed by choosing the plan, making a credit card payment, and confirming the transaction.
Based on this, fraud can be prevented right from the payment processing. There are three ways travel companies can prevent travel frauds this way:
- Using 3D Secure (3DS) authentication during credit card processing. This method verifies the identity of the cardholder by using additional verification methods.
- Implementing fraud prevention tools that track suspicious transactions. These robust tools use risk assessment and behavioral analysis, detecting bulk ticket purchases or suspicious location/IP addresses.
- Strengthen cancellation policies to prevent illegitimate chargeback claims. Ensure clear and concise terms to avoid misunderstandings and reduce disputes (that could lead to potential chargeback frauds).
Why Traditional Controls Limit the Effectiveness of Travel Fraud Prevention
While setting up the services, travel companies may already have refund abuse prevention systems, but are they reliable enough? In fact, traditional systems may have limited the effectiveness of fraud prevention for several reasons, such as:
- The rigid nature of traditional fraud prevention. In the era where frauds are constantly evolving, static and rule-based fraud prevention due to traditional control can’t simply adapt to advanced cyberthreats.
- Manual review and monitoring process. Lack of real-time mechanism allows payment frauds to remain undetected for a long time. Relying on manual labor is fine, but not when dealing with frauds that can happen in just a matter of seconds.
- High risk of false positives from traditional control. Static fraud prevention may flag last-minute bookings or irregular (but legitimate) activities as fraud. Not only does this limit the effectiveness of fraud prevention, but it also creates friction for customers.
Using Device Trust to Strengthen Travel Fraud Prevention Decisions
Alternatively, there is also another solution that travel companies may be able to implement: device trust. Normally, this security model is being used at the corporate level to determine whether a device is authorized to access sensitive data.
However, in travel businesses, device trust can be used to strengthen existing travel fraud prevention by taking its risk-based logic. Here’s how device trust in travel platforms would work wonders:
Approving Low-Risk Bookings Instantly
Risk-based systems like device trust determine how customers can purchase travel plans and tickets based on their risks. This system is dynamic, ensuring low-risk customers can book whenever they want.
The risk can be determined with their purchase behavior and digital fingerprinting. This concept helps travel companies balance user experience and security by approving low-risk bookings without any friction.
Adding Friction Only for High-Risk Devices
How about customers with high-risk scores? Naturally, they will not immediately be flagged as fraud yet. Instead, the device-based risk detection systems will demand an additional authentication to prove their legitimacy more accurately.
For example, they can prove it by choosing biometrics or a one-time password to authenticate. Again, only high-risk devices require these to log in, allowing low-risk ones to enjoy the services seamlessly.
Preventing Ticket Issuance Before Fraud Occurs
Rather than mitigating, travel companies can prevent the fraud from even occurring in the first place. Device trust can exactly do this with:
- Tracking the digital fingerprint and IP address to determine whether a customer is faking their location when attempting an illegitimate purchase.
- Analyzing behavioral patterns to distinguish between real humans and bots made for exploiting bugs in the ticket systems to gain benefit.
Reducing Chargebacks before Disputes Are Filed
Chargeback reduction can be improved with device trust, thanks to its capability of behavioral analysis and digital fingerprinting. Behavioral analysis flags suspicious activity like suddenly buying multiple travel plans, while digital fingerprinting checks if the device has been used to perform such.
With these working in real time, device trust can alert travel companies if suspicious users file disputes in hope of gaining illicit chargebacks.
How Travel Fraud Prevention Improves Operations and Customer Trust
Naturally, better security means more trusted business, which also means more customers. Here’s how travel and ticketing fraud detection could improve travel companies’ operations and customer trust:
Lower Chargeback Ratios
Having a chargeback reduction means there will be fewer chargeback ratios. Only the legitimate refunds made by real consumers, while any fraudulent attempts have been prevented. Not only does it improve operations, but travel companies can also save losses from false chargebacks.
Reduced Manual Review and Support Costs
With fraud prevention now working in real-time, manual review is much less needed. As a result, travel companies can operate businesses efficiently with lower support costs. Customer support can be focused on helping customers rather than facing chargeback frauds.
Faster Resolution for Legitimate Travelers
What about customers that have legit businesses? By using fraud prevention with device trust, these legitimate travelers will be treated as low-risk. Verification becomes fast and seamless, increasing their customer experience with booking travel.
Stronger Trust in the Brand
Lastly, by having robust refund abuse prevention, travel companies can also improve their relationship with their customers. Travel companies will be deemed as trusted businesses, which means more customers will be likely to purchase more bookings in the future.
Power Travel Fraud Prevention with Device Trust from Keypaz
Keypaz understands how travel companies struggle with chargeback frauds all the time. Hence, Keypaz is willing to provide the best solution with its AI-powered device trust. Here’s how Keypaz powers travel companies:
- Detect suspicious chargeback attempts and anomalous behavior that resembles a bot by using its device intelligence.
- Enhance risk-based systems by contextual device insights, ensuring no false positives against real customers.
- Scan the customer’s device for any usage of VPNs, fake locations, and cloned apps, then determine its device trust score.
Interested with a device trust in travel platforms? Start your free trial with Keypaz to strengthen your travel fraud prevention today!