The title of this post says it all however I’m not actually too disappointed. Following the competition and the way it was judged I’ve come to the conclusion that there was no way E-resistible could have walked away with the prize money unless we had understated our progress & achievement.

NACUE is an organisation that is set up to help student entrepreneurs get on their feet and to this end the National Varsity Pitch Competition achieved this goal. The winning prize was awarded to a second hand video game exchange website. This is a business that hasn’t launched yet, with no proof of concept and (imo) unclear revenue streams. However, it is potentially a very good idea with a large target market. If the judges (Doug Richards et al) viewed the competition as “if this £10k was my own money to invest then where would I put it” then I can see no way that the video game exchange could have won. Sadly for us the judges simply picked what they thought was a good idea which needed the money to get off the ground.

Not really knowing this in advance, we walked on stage all guns blazing in an effort to convey how successful E-resistible has been. The reality is that the money was given to a start-up that really needs it, so we can walk away feeling happy for the winners. It was never part of our business plan to use prize money to expand, winning would have been an unexpected nice surprise but the reality is that its impact on our business would have been very limited because of the stage we’re at.

Below is a picture of the team being awarded the prize for winning our category on the night.

Anyway onwards and upwards, there will be some fairly visible updates to the site coming in the next month or so and we’re currently very busy expanding into some new cities.

Finally, a report on the cycling training. I’m not worried about fitness or stamina levels…however saddle soreness is something else altogether! Lets just say it hurts!!

We’ve had some more great news this week when we found out that E-resistible has made it through to the finals of the National Varsity Pitch Competition run by NACUE – an organisation that supports entrepreneurship at UK universities. In total there were 42 semi-finalists split amongst 7 categories and one business has been selected from each category to provide 7 businesses who will compete in the Grand Final held in The British Library on 5th May.

The 1st prize is £10,000, access to a business mentor and free office space (yes we’ve got some in Tewkesbury but we could do with some space in London too!) The final also has some heavyweight judges in the form of Doug Richards from the 1st two series of Dragons Den, July Meyer from the online version of Dragons Den and Richard Tyler who is the enterprise editor for The Daily Telegraph.

Last monday I attended the semi-finals for our category which involved pitching E-resistible to a pannel of 6 judges for two minutes and taking their questions. Unfortunately both Stephen & Velin were out of the country so I was on my own meaning that the pressure was really on to get through! I don’t know how I would have explained it to them if we didn’t make it…

I am supremely confident in the business and having lived & breathed E-resistible for the last 2 years I was able to answer the judges’ probing questions very specifically and in great detail. I don’t expect that Doug Richards will be anywhere near as easy to impress but we are definitely going to give it a good go!

There are other benefits to the competition such as increased visibility and exposure on a national level for E-resistible. The audience will be made up of invited guests such as investors, public figures and national press so there is also potential that we will be seen by someone who is very keen to invest money into E-resistible. We haven’t actively sought investment capital to date because we haven’t needed it and we enjoy our large equity stakes in the company, however, we could do an awful lot if someone offered us a substantial sum of money (150k+).

Who knows where this road will lead. We really want to win on 5th May and I think we are in a very good position to be strong competitors for the 1st prize. Pitching to some business legends will be pretty intimidating but i’m sure we will take it in our stride and give it our best shot.

Credit card fraud is something that a normal person doesn’t really think about. You hear figures on the news of 700,000 instances of fraud last year costing businesses £420m and it means nothing to you. “My  card hasn’t been stolen yet & even if it is the bank will reimburse me” – this was my attitude until E-resistible became a card merchant and we suddenly found out the rules of the game…

We initially started with a very well known payment processor that attaches itself to an equally well known auction site. This payment processor offered literally zero protection for merchants against fraud. As a merchant the way to protect yourself is to ensure the customer goes through 3d Secure Authentication, this is the password for Verified by Visa & Mastercard Secure Code that most people are familiar with on internet transactions. However our 1st payment processor didn’t have 3d secure available for anyone to use, this therefore left all their internet merchants at the mercy of fraudsters. When the inevitable charge backs arrived from the person who’s card was stolen our payment processor did no investigation at all, took the money from us to reimburse the card holder and charged us a £7 admin fee for the privilege of taking our money away!

On top of this they also retained 5% of our total turnover in a rolling reserve for 90 days. For a business working on a small 9% margin this was the absolute killer. The fact that they retained this rolling reserve tells me that they were expecting very high levels of fraud due to their weak system and the retainer covered their risk.

Needless to say we lost many thousands in a short period of time & our relationship with this payment processor was abruptly halted. We now use a reputable merchant bank and Sage Pay as our gateway. The gateway provides all the fraud checking procedures, 3d secure etc. Both provide an excellent service to us and I happily recommend them to other people setting up e-commerce websites.

Following on from our bad experience I think we’ve now become one of the most responsible and secure merchants on the web. We actually went to the trouble of writing our own fraud checking system. When we identify an attempted transaction as fraud we can also flag that persons, postcode, telephone number, IP address and account with us as fraudulent. Now every order that gets placed scans against our database of past attempted offenders and flags up any matches for further investigation.

With our experience we noticed some patterns to the fraudulent activity and can identify the risky transactions  just by looking at data we already gather. Here are a few indicators:

1.) Fraudulent transactions will always arrive at e-resistible by searching something along the lines of “order takeaway pay by card” “Order takeaway online”, this doesn’t mean that all people searching this are fraudsters but its just another measure to look at. Someone searching “Chinese delivery Bristol” is most probably totally innocent.

2.) The person’s email address will bear no resemblance to their name. Most peoples emails have their name in it and those that don’t usually have a variation eg John Smith could have smithy1988@hotmail.com, again this doesn’t mean that crazy_chick83737@hotmail.com is guilty but the % of people placing orders searching for “Order Takeaway Online” and a random email is fairly low.

3.) The person will often make many attempts with many different cards. How many people do you know with 3 different visas? This combined with points 1 & 2 practically makes the person a definite fraudster. We also log the issuing countries and banks of the cards & you will see that the cards will all be registered to different addresses.

4.) The cards will be registered to a different country. Fraud is mostly committed with international cards so this is a particularly easy way to filter high risk fraudulent transactions.

The fraudsters never actually have the card they are using with them, they have most likely brought a list of details or stolen them online somehow. This means that they don’t know the issuing bank and sometimes even the country that the card is registered to. This makes it very easy when I call them up to “ask security questions”, most just hang up on me or guess wrongly. Due to the increased security we now have in place, most fraudsters aren’t able to actually place the order however we still call them anyway :-p this is to act as a deterrent, I always tell them we have called the police & reported their address, IP address & mobile number. I believe that fraudsters are in contact with each other so once they find a soft website loads of attempts will be made as word spreads amongst the criminals. By telling them we’ve called the police even for people who don’t manage to place the order I hope that word also spreads that attempting to use a stolen card on E-resistible isn’t worth the trouble as we always catch them & they risk getting the police involved.

That’s our experience and how we’ve had to learn very quickly to protect ourselves. No-one was there to give us this information when we set out & when I see some competitors of ours setting up with the same payment processor that we used initially I feel really sorry for them as I’m sure they will soon experience some real pain. My issue with the card industry as a whole is that there isn’t enough of an incentive to totally remove fraud from the system. The merchant is the one who pays the cost of any fraud and therefore why should the card companies invest large sums of money to guard against it. If they were footing the bill you could bet that fraud levels would be close to zero.