Credit Card Fraud Prevention Services - Paykings Payment Processing

Fraud Prevention

fraud prevention services
What is Credit Card Fraud and How do I Equip my Business with Fraud Protection?
Credit card fraud is a wide-ranging term for theft and fraud dedicated to using or involving a payment card, such as a credit card or debit card, as a deceptive source of funds in a trade. Fraud is a big cause of credit card chargebacks, so many eCommerce business owners seek fraud prevention solutions.The purpose may be to get goods without paying, or to get unauthorized funds from an account. Credit card fraud is also an adjunct to identity theft.As stated by the United States Federal Trade Commission, while the rate of identity theft had been holding steady during the mid-2000s, it has increased by 21 percent in 2008.Though incidences of credit card fraud are confined to approximately 0.1percent of all card transactions, they have led to huge financial losses since the fraudulent transactions have been large-value trades.Despite the enormous volume and valued growth in credit card transactions, the most recent reports of losses have remained the same or have decreased due to sophisticated fraud protection and detection avoidance systems.Today’s fraud protection services and detection systems are designed to stop one-twelfth of one percent of all fraudulent transactions processed, which still translates into billions of dollars in losses.
Why are eCommerce Retailers Liable for Credit Card Fraud?
When a retailer begins accepting online payments, they have officially entered the card-not-present world. For a consumer, the choice between buying merchandise online or in-store merely comes down to a matter of convenience, cost, and availability.Buying online versus in-store are two very different scenarios, especially concerning the liability for accepting a fraudulent transaction.For the eCommerce merchant, a card-not-present (CNP) transaction, which means that the cardholder isn’t physically present with the credit card when using it for a purchase with the merchant.With no standard security measures like checking identification and paying using a chip reader card, an internet transaction is deemed to have far less fraud protection.Given the risk involved with accepting an online transaction, the liability of accepting a fraudulent transaction rests with the retailer themselves, rather than the issuing bank. If a merchant accepts an order online that is later deemed a fraudulent transaction, it’s the merchant’s responsibility to refund the consumer. The cardholder’s issuing bank will collect on behalf of the cardholder.Understanding this liability is essential for online retailers, many of whom are unaware of their duty to examine their online purchases closely to weed out credit card fraud they may be on the hook for.It’s imperative that an eCommerce merchant implement online fraud detection steps to safeguard themselves from the costs of fraudulent transactions, and credit card fraud as a whole, for many reasons.Firstly, the entire cost to the merchant for accepting a single fraudulent purchase is often more than double the cost of the actual purchase itself, because they cannot recover the original merchandise or services that had been fraudulently shipped, and because they must also repay the defrauded customer.Secondly, the retailer’s bank (known as the acquiring bank, together with whom the merchant stores their money) heavily monitors their customers for fraud acceptance, and might charge a fee for each and every chargeback received. And, if the merchant starts to process tens of thousands of fraudulent transactions, an acquiring bank might not only drastically raise credit card fees, they might even take steps to shut down a retailer’s merchant account all together.With all this information presented to you, it isn’t meant to overwhelm you with all this talk of credit card fraud. As an eCommerce retailer, it’s important to educate yourself about what credit card fraud looks like, what it involves, and how to arm yourself with credit card fraud protection.

Learn more about PayKings’ iSpyFraud protection services:

iSpyFraud™ – Detailed Overview

iSpyFraud™ is a rule-set based fraud management utility that allows merchants to configure extensive filters to help them in detecting fraud and screening suspicious transactions. iSpyFraud™ ‘s extensive reporting system gives merchants a quick and easy way to review transactions, block suspicious activity, and zero in on malicious users. iSpyFraud™ looks at transactions both before and after processing and can decline transactions before and after authorization. The successful implementation and reduction in chargeback’s across numerous merchants has been a testament to the effectiveness of this product.

1. Dynamic Building of Fraud Scrubbing Rules

At a Glance, you can view some of the rule building controls. You can create both “Flag For Review” or “Deny” rules. Furthermore, you can differentiate between Attempted and Approved transactions. This gives you the flexibility of keeping someone from trying to spin credit cards and detecting it before they get any transactions approved.

2. Static Rule Banning / Blacklisting

Along with Dynamic rules as specified above, you can also input Static rules such as banning specific countries, IP Address Ranges, Credit Card Numbers, E-Mail Addresses, etc …

3. Review Transactions Marked as Suspicious

The Waiting on Review Tab allows you to view any transactions that have been flagged as suspicious. From here, you can cancel or approve transactions. This dashboard will also tell you what rule(s) have been triggered that caused the transaction to be flagged as suspicious.

4. Full audit history of all transactions – scrubbed or not

Lastly, you can use the History tab to review all transactions. This is helpful when trying to understand and determine fraud patterns. You will be able to see all approved, whitelisted, blacklisted, reviewed, and declined transactions. You can search by IP Address, Transaction ID, etc … to look for obvious patterns.

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