As online payments continue to evolve at a remarkable pace, so does payment fraud. To combat fraudulent activities, modern payment service providers need to enhance and improve their payment fraud prevention technologies.
- Financial losses: Without effective fraud prevention measures, PSPs may incur chargeback fees, customer reimbursements, and other penalties.??
- Reputational damage: The reputation damage caused by payment fraud can have enduring impacts on the company's development, profitability, and sustainability as a payment service provider.
- Regulatory and legal consequences: PSPs could face legal liability for monetary losses suffered by customers or other parties due to fraud. Plus, neglecting to fulfill contractual obligations and agreements regarding data security with merchants, financial institutions, or other stakeholders may lead to lawsuits.
- Threats to compliance: PSPs found non-compliant with regulatory requirements in tackling payment fraud face hefty fines, penalties, or sanctions imposed by regulatory authorities. Additionally, they may encounter operational disruptions and miss out on future business opportunities, hindering their growth potential.
Let’s examine advanced payment fraud prevention technologies taking as an example Akurateco's white-label payment gateway. Considering the numerous challenges that fraudsters present us today, Akurateco's system is built on three key components to effectively combat them:
- Whitelists and blacklists: Whitelists and blacklists safeguard users by identifying trusted and suspicious entities in transactions. Whitelists streamline payment experiences for preapproved entities, while blacklists block unauthorized entities to prevent system vulnerabilities exploitation. With this approach, transactions are automatically validated and blocked when necessary, ensuring a secure payment environment.
- Velocity limits: Velocity limits are designed to control and regulate particular transaction parameters, such as the maximum amount debited from a card within a defined timeframe or the maximum number of payment attempts allowed from various sources like cards, IPs, emails, and their combinations. By implementing velocity limits, organizations can effectively hinder unauthorized individuals from exploiting stolen cards and engaging in excessive spending.
- Third-party risk-scoring providers: Akurateco works with top global risk-scoring providers such as Fraudio, MaxMind, AcuityTec, and Sift Science. They analyze various data points to assign a risk score to each transaction, indicating the likelihood of fraudulent activity. As a result, businesses and organizations can make informed decisions when approving, rejecting, or further investigating suspicious transactions based on their risk scores.
To learn more about the most efficient payment fraud prevention technologies for PSPs, read the full article
on the Akurateco blog. Let's fortify your online payment security together!
