It’s dangerous to pay a deaf ear to fraud and new safety techniques if you run a business prone to payment fraud.
Merchants want as much protection as possible— and adding an extra layer of protection can further reinforce your multilayer strategy.
Velocity checks, for instance, are an important way to deal with fraudulent purchase attempts in your eCommerce website.
To learn how this approach works, it helps to understand how criminals target businesses.
Understanding Credit Card Fraud
Many unauthorized purchase attempts on your website come from fraudsters who specialize in credit card fraud.
But the credit card data comes from their partners in crime and often contains both valid and invalid card info. Many times, a fraudster must test each card number on an eCommerce website to determine if the information is accurate or not.
Rejected cards usually mean the card data is wrong, while all the accepted card data is valid and may be used in oncoming fraudulent purchases. The fraud risk remains until the card owner notices the breach
When criminals test multiple cards and accomplish several fraudulent payments on an eCommerce website, chargebacks begin to pile up, exposing its owner to liabilities.
Merchants can rely on velocity checks to help spot and stop phony purchase attempts.
Velocity Checks: What are they?
Velocity checks are a fraud-protection strategy built to track the rate at which shoppers initiate transactions.
This technology works by spotting and stopping phony purchase attempts based on how a buyer initiates several transactions.
When criminals get their hands on the right card number, they make multiple purchases in a bid to utilize all the funds. For merchants, multiple card tests and fraudulent purchases can mean serious financial losses.
This strategy helps a business analyze customer data based on several factors, such as:
- Billing Address
- Shipping Address
- Email Address
- Cardholder Name
- Type of Device
- IP Address
- The Card Number
Velocity checks are built to scrutinize the data issued with every transaction and raise red flags for several submissions of the same card data within a specific window.
That way, a business can filter out phony transactions by identifying easily the instances where a would-be criminal is testing cards or attempting numerous transactions with stolen credit card information.
Velocity checks are an excellent way to stay on top of any hidden fraud activity threatening to ruin your business’s bottom line.
Most payment security services include velocity checks in their security strategies, but merchants should inquire upfront.