Fraud prevention for online orders

The number of fraud cases has increased significantly in recent years, leading to substantial hardware damage and financial losses. Fraudsters use various tactics such as SIM swapping, phishing attacks, and unauthorized access to compromise user accounts. To effectively counter these threats, telecommunications companies are required to implement robust security measures, with two-factor authentication established as a key line of defense.

The challenge was to develop a tailored solution that could be seamlessly integrated into an existing online ordering process of a telecommunications customer. The primary goal was to reduce and track fraud during online purchases while simultaneously increasing security and strengthening customer trust.

In addition, the solution needed to follow a white-label approach, making it applicable across multiple brands, minimizing financial losses and damaged hardware caused by fraudulent orders, and enabling continuous monitoring of fraud trends in comparison to the market.

This project involved an extensive analysis for a well-known telecommunications company. The selected solution was the integration of two-factor authentication (2FA) into the existing online purchasing process in order to specifically address security risks.

By introducing 2FA, both security and customer trust were significantly improved. At the same time, there was a clear focus on reducing fraud throughout the entire online ordering process.

From a technical perspective, new API interfaces were integrated and connected to existing customer authentication services, which serve as the source of user information.

The project was consistently designed following a white-label approach, allowing the solution to be flexibly applied across multiple telecommunications brands.

In addition, customer interactions were tracked in detail to transparently analyze successfully authenticated purchases, abandoned or failed orders, and the number of authentication attempts.

Complementary dashboards are available to enable structured analysis and monitoring of relevant customer and process information.

Prevention: By implementing SMS-based two-factor authentication for purchase orders, the risk of fraud was significantly reduced. The additional authentication layer minimizes the likelihood of fraudulent transactions and contributes substantially to reducing financial losses and hardware damage.

Security: 2FA adds an additional layer of security to the purchasing process. Even if login credentials are compromised, access to the customer’s mobile device is still required to complete a transaction. This effectively protects sensitive customer data.

Real-time monitoring: SMS-based authentication enables real-time monitoring of user accounts and transactions. Unusual or suspicious activities can be detected early, allowing for a fast and targeted response to potential threats.

Authentication: Requiring an SMS code significantly reduces the risk of unauthorized access and account takeovers. Even with knowledge of a user’s password, access is not possible without the second factor.

GDPR compliance: The introduction of SMS-based 2FA helps telecommunications companies meet the requirements of the General Data Protection Regulation regarding data security and the protection of personal information.

Customer trust: Transparently and proactively securing customer accounts strengthens user trust. This increased sense of security has a positive impact on customer loyalty and enhances the company’s reputation as a reliable provider.