How SpiceJet Nipped Online Fraud in the Bud

Low-cost airlines have turned the airline industry on its head, with every major operator cutting costs to woo customers. But with increased volumes, come increased risks. SpiceJet, which handles more than 2,000 online credit card transactions every day, was in such a situation, when it discovered that it was losing almost Rs 50-60 lakh per month, due to online frauds. Operating in an industry which survived on razor thin margins, Virender Pal, CTO, SpiceJet, knew that he had to quickly find a way to reduce fraudulent transactions.
Pal says that though the firm had a process to verify online transactions in the form of a Fraud Control Unit, they relied on screening transactions manually, which increased the chances of fraud.
The most common method used by fraudsters is to use stolen credit card information to buy tickets. By the time the true credit card owner reports the fraudulent transaction, the flight usually has been taken. While no India-specific figures are available, a Cybersource study estimates online fraud to be about 1.3 percent of worldwide airline revenue.
Alarmed by the increase in online fraud, SpiceJet enhanced customer experience with real-time verification of credit card transactions to alleviate security fears. The thrust was on making SpiceJet.com a secure place for credit card transactions. Accordingly, Pal’s team faced the task of finding an automated and flexible online risk management solution that could screen online transactions efficiently. As the solution chosen would screen transactions accounting for over 90 percent of the company’s business, the firm undertook a careful study of the market, before choosing a solution. After three weeks of deliberation, the firm finally opted for CyberSource’s Decision Manager, an automated online risk management solution. SpiceJet was impressed by the fact that it could get access to a real-time database of credit cards, which was used by nearly 20,000 organizations across the world.
Post deployment, the percentage of fraudulent transactions has come down significantly.
15/05/09 Srikanth RP/NetworkComputing

To Read the News in full at Source, Click the Headline

Categories: SpiceJet May 2009