QUASH: How we crushed online credit card fraud

How a single algorithm blocked credit card fraud on eBooks.com

Online credit card fraud algorithm
eBooks'com's fraud-busting system is a well-oiled machine
  • The cost of online credit card fraud in the US exceeds $11 billion annually.
  • Global online card fraud is expected to exceed $50 billion by 2024.
  • But that is dwarfed by the effects of over-cautious screening: $118 billion in lost sales.
  • eBooks.com’s credit card fraud-screening algorithm QUASH is now 14 times more accurate than the industry benchmark.
  • The system discriminates effectively between transactions that just look dodgy and actual fraud attempts.

(Updated September 2021)

Credit card fraud is a major issue for online retailers, especially for those selling intangible goods like ebooks. With physical goods there is at least a delivery address, which can make law enforcement possible. Ebooks are more problematic.

Online retailers without adequate protection have little choice but to decline all transactions that look slightly odd, resulting in lost sales due to false positives. Some companies block sales to entire countries, or even entire regions, because the challenge of detecting fraud is too much.

The tools available from payment gateways and third party providers are hopelessly inadequate, blunt instruments. So we created a proprietary fraud screening system, QUASH, that is extraordinarily effective at minimising credit card fraud and charge-backs. Our charge-back rate is one fourteenth the industry average for online content sales.

eBooks.com’s Chargeback ratio:

2018 0.110%

2019 0.051%

2021 0.039%

When this article first went to press in 2018, QUASH was incredibly effective — five times more effective than the industry benchmark. But that little guy just keeps on learning, whacking those moles faster and better as they pop up. As of 2021 our chargeback ratio is an unbelievable 0.039%. Take that, fraudsters.

eBooks.com’s proprietary QUASH algorithm crushes online credit card fraud to one fourteenth the benchmark ratio

But more importantly, the rate of “false declines” – innocent people being blocked – is close to zero.

QUASH checks every new transaction against millions of data points, and identifies anomalies and evil-doers in less than a second. The algorithm runs quietly in the background, and requires minimal human intervention.

The first prototype of QUASH, eBooks.com's fraud Screening system
The earliest prototype of QUASH, eBooks.com’s fraud Screening system

Why this matters

Honest folks need to know that ethical businesses have their backs and are coming down hard on credit card fraud.

As a consumer, you want your e-bookseller to be onto this.

For publishers and authors, when someone steals your ebook with a hacked credit card, your ebook is, quite literally, getting into the wrong hands. We don’t know what else fraudsters do with your ebooks but there’s no question: you don’t want a growing collection of your IP in the hands of fraudsters. QUASH stops them cold.

And, because QUASH only nails real fraudsters, eBooks.com sells a lot more of your titles than we would if we simply whacked away every transaction that looks a bit unusual. This has to be good for authors, publishers and readers alike.

Further reading:

Chargeback Stats for 2021

Credit card fraud cost US consumers $11

Reducing false positives in credit card fraud detection

eCommerce Growth Drives Rise in UK Card Fraud

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