The importance of a solid risk analysis to safely increase online sales in Latin America

Alain Delcourtgeneral manager at BoaCompra, a PagSeguro company: ‘The current context is particularly fragile in terms of the risk of fraud: on the one hand, e-commerce revenues are exploding in Latin America; on the other, a scenario of strong financial instability.

Fraud is a constant risk for businesses selling online in Latin America, a region frequently targeted by fraudsters. However, with reliable advanced technology and in-depth market expertise, more secure transactions can be guaranteed. This article dives into the main characteristics you should look for in your risk prevention partners.

As online sales increase more and more, a major risk facing any business operating digitally also increases: attempted fraud. This is especially true for foreign and local merchants selling in Latin America, a region historically prone to fraud.

The current context is particularly fragile in terms of the risk of fraud: on the one hand, e-commerce revenues have been exploding in Latin America for a few years, and even more so after the COVID-19 pandemic; on the other, a scenario of strong financial instability.

These two factors make fraud attempts even more frequent in a region where they are already a daily concern for companies trying to escape financial losses caused by fraud. According to the MRC’s 2021 Global Fraud Report, 3.5% of e-commerce transactions in Latin America in 2021 were attempted fraud, which is higher than the global average of 2.6%.

So, to sell successfully – and securely – in Latin America, you need to counter fraudsters with robust, state-of-the-art risk analysis solutions. Let’s dive into some of the factors that make a risk analysis process reliable and beneficial to your business, so you can know precisely what your business should be looking for.

1. Knowledge of the market and target audience

Fraudsters have access to modern technology, but in order for a fraud attempt to occur, they also use several behavioral techniques. Therefore, designing an anti-risk flow starts with understanding how a certain audience buys and behaves online.

Each industry deals with different types of risk, requiring distinct approaches to fraud prevention. The online gaming market, for example, is one of the most frequent targets of fraud due to its high number of low-cost purchases, the presence of in-game purchases and currencies, and a younger audience, who might be less aware. fraud risks.

These are of course just some of the characteristics of fraud attempts targeting online gambling companies – of which we at BoaCompra are very aware, having been a leader in this segment for over 17 years of experience in payment solutions for foreign merchants selling in Latin America.

As gaming is one of the most targeted and fastest growing online markets, it “sets the bar” for fraud prevention in other digital goods segments, helping them to better define the most effective anti-risk strategies. It also means that BoaCompra’s own intelligent fraud prevention algorithms are ready to protect the digital goods industry as a whole.

2. Highly Skilled Machine Learning

As technology evolves, companies can strengthen their anti-risk processes, but keep in mind that fraudsters also benefit from technological advances. Thus, it is essential to put in place cutting-edge and constantly updated strategies so as not to fall behind.

BoaCompra by PagSeguro’s machine learning algorithms have been learning for over 17 years to better identify and combat online fraud attempts at the most sensitive stage: payments. We process more than 100 million transactions each year, and each of them creates data to feed our machine learning. This is why we are able to reduce instances of fraud without harming the approval process for legitimate purchases.

3. Customization if needed

Ideally, your payment partner’s expertise and your own company’s knowledge should be combined to define the best fraud prevention processes. BoaCompra has its anti-risk feed well established, but there is room for customization where merchants believe it is needed to make it even more tailored to specific business needs.

It is also important to be able to manually review any transaction identified as fraudulent, in order to better avoid cases of false positives and to increase the accuracy of the algorithms.

Since online fraud usually occurs during the payment process, it is essential that your partner for accepting payments in Latin America is able to handle fraud attempts, which can be very common in the region. From payments, to customer support, to the most robust risk prevention, BoaCompra by PagSeguro strives to be a reliable partner for all our customers’ needs.

About Alain Delcourt

Alain Delcourt is Managing Director of BoaCompra, a PagSeguro company. He has 20 years of expertise in e-commerce, payments and the distribution of digital goods in Latin America. Prior to BoaCompra, Alain co-founded several companies, which made him a versatile executive known for building multicultural teams and highly collaborative work environments.

About BoaCompra by PagSeguro

With more than 17 years of experience, BoaCompra by PagSeguro is a local payment platform that allows merchants around the world to access Latin America by accepting more than 140 payment methods in local currency, without the need for a local entity. It also allows single/bulk payments to Brazilians in local currency instantly, without bank fees. BoaCompra is part of PagSeguro, a disruptive fintech company powered by strong and consolidated infrastructure and capital.


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David A. Albanese