3dcart, a provider of hosted ecommerce software for small and midsized companies, has entered into a partnership with Kount, a turnkey fraud solution provider.
The partnership between 3dcart and Kount comes at a critical time, as online purchase-related fraud spikes during the holiday season. By extending Kount services to 3dcart clients, the two companies hope to reduce chargebacks caused by fraudulent activity and make online selling safer for merchants during and after the busy season.
"Around Christmas time, shopping skyrockets, which means fraudulent activity increases too," Bryan Shaw, community manager at 3dcart, says. "Unfortunately, fraud affects not only consumers subjected to identity theft, but also retailers that lose money if a transaction is deemed fraudulent. Oftentimes, they ship the product or provide the service before fraud is detected, and experience chargebacks once the financial institution notices fraud," he adds.
Through the Kount extension, 3dcart customers can have their transactions regularly monitored and evaluated for fraud. Kount's technology is centered on what the company calls a "decisioning" engine that scans all activity in real time, flagging any transactions deemed suspicious and not congruent with standard shopping patterns. Once the engine earmarks a transaction, Kount alerts the merchant.
While the issue of ecommerce fraud isn't new, the introduction of cryptocurrencies into the space is adding a new dimension to the problem. As more retailers consider honoring cryptocurrencies, those that want to accept them as a form of payment have to deal with some associated risks. Like other transactions made without in-person identity checks, purchases made with cryptocurrencies are more susceptible to fraud.
Bitcoin, for example, which has grown tremendously in value since it was first introduced three years ago, is an anonymous currency. This, Shaw says, makes it more of a target for fraudulent activity and hacking. "All Bitcoin transactions are monitored in an open ledger and are secure," Shaw explains, "but that unfortunately doesn't always stop hackers."
As Bitcoin becomes increasingly popular among consumers, demand for retailers that accept the currency is rising. 3dcart, which was among the first ecommerce software providers to enable its merchants to accept Bitcoin as payment, allows its users to either accept Bitcoin directly or convert it to cash through BitPay, a Bitcoin payment processing provider and 3dcart partner.
"Because you're dealing with online transactions, there will always be individuals and technologies out there to hack even the most secure systems. Bitcoin is still fairly new, which means consumers and merchants are still learning to engage with it," Shaw explains.
Moving forward, Shaw says 3dcart will do its part to ensure that it is delivering solid fraud protection for all types of transactions, including Bitcoin. "All we can do as software providers is aim to stay one step ahead of hackers and develop technologies that ensure the safety of our users," Shaw says.