The amount of online transactions increase every day, while purchasing online has turned into the habit for many customers. Very often people prefer to buy online because it is cheaper, faster and more convenient, but unfortunately the level of credit card fraud is higher for online transactions. That’s why merchants who run their businesses online look for payment processing systems which are highly secure. But what fraud protection tools does it need to have in order to meet the requirements of the modern market? Modern credit card fraud protection tools can be divided into three groups according to their nature: techniques based on the geographical location, accuracy of customer-supplied data and others.
Geographical location based techniques include IP geolocation defining; proxy detection (high-risk IP addresses, suspicious proxies and satellite connections serving high-risk geographies are indicated); BIN analysis (bank identification number is analyzed to find out the following information card association, issuing country, bank and card type).
Techniques based on the accuracy of the customer-supplied data are the following e-mail identity verification, telephone profile analysis, reverse address lookup, professional social network lookup. These techniques are targeted mostly at checking whether the information provided by the customer during the transaction (e.g name, surname, shipping address, billing address, etc.) corresponds previously submitted one.
Some payment processing platforms may use risk scoring (a third-party service performs an overall risk assessment of a transaction), website traffic information analysis, mapping and domain registration lookup. The information obtained from these sources can also help to point out customers from high risk zones.
If the online payment processing service you utilize supports all mentioned fraud protection tools it can help your business to reduce the amount of chargebacks and consequently protect you from significant money losses.
The last thing which should be mentioned is the example of the truly secure payment processing solution — UniPay Payment Management Platform (More detailed description of this payment processing software can be found here).
Visit Paylosophy Payment Advice Blog if you are interested in the more profound explanation of the credit card fraud protection tools.