Payment gateway fraud is fraudulent activity that targets payment gateways, which serve as the technological infrastructure for secure online payments. Fraud is more commonly encountered by large companies, as the flow of financial transactions is larger and not all payment gateways perform quality transaction verification.
Billblend uses all modern ways to prevent payment gateway fraud. Let’s tell you what are the options of payment gateway fraud and how Billblend protects clients from fraud.
Ways of fraud with payment systems
Scammers use several methods of payment gateway fraud. Here are four of the most popular schemes.
Identity theft
Identity theft is an offence where a person’s personal data is illegally used for material gain. Fraudsters can steal a person’s physical card or hack into a database where personal information is stored.
To reduce the risk of losing important personal data it is important to keep an eye on who you leave a financial footprint with. It’s worth avoiding registering on sites with dodgy reputations, as there is a risk of putting your data in the hands of malicious individuals. Don’t download apps from unverified sources, don’t download pictures and files sent by strangers to your device.
BIN attacks
BIN attacks are a method of payment fraud in which an attacker uses data about a card’s BIN number and generates the remaining digits to it. The purpose of the generation is to create an actual card number to use to make purchases.
A payment gateway can provide all of this, so it’s important to know what to look for when choosing one. There are four main parameters: security, currency support, speed of integration, and speed of transaction processing.
Card-testing
This method of fraud is similar to the previous one, but unlike the first one, the attacker does not have reliable information about the BIN number. The scammer creates several hundred variations of card numbers and tries to find one valid one that can be used to make a purchase.
Account takeover
This method of fraud with payment systems is associated with the attacker gaining access to the client’s personal data, which allows him to enter the personal cabinet of a banking application or e-wallet. Having gained access to the account, the scammer can make purchases using confirmation codes from the personal cabinet.
Ways to combat fraudulent transactions
Billblend prioritises customer safety, so we follow different ways to prevent fraud with payment gateways. Let’s tell you about the most popular and effective ones.
Address Verification Service (AVS)
Address Verification Service (AVS) is a service that allows you to verify whether the user making a payment is really the owner of a bank card. Verification is carried out by comparing the address specified in the payment form with the one specified when the card was issued.
The security system works as follows:
- when making a payment, the client enters his address;
- the system sends a request to the issuing bank;
- the bank checks the data and sends a reply;
- if the address matches, the transaction will be confirmed; if the address differs, the transaction will be cancelled.
Address Verification Service (AVS) is not available in all countries of the world and not all payment systems allow to verify user data.
CVV (Card Verification Value)
CVV (Card Verification Value) is a verification code of a bank card, which confirms its authenticity. The code is usually indicated on the back of the card. This code must not be shown to unauthorised persons and must not be made publicly available on the Internet.
CVV code consists of 3 digits, rarely 4. A similar technology of protection against payment gateway fraud is used by most operators issuing bank cards. The name of the code may differ, but the principle itself is unchanged.
To prevent fraud with payment systems, when processing a transaction, the gateway requests not only the card details, but also the confirmation code. If the code is not suitable, the transaction is rejected. Attackers can gain access to a real card, but without CVV. In this case, there will be many transactions with code generation in the hope of finding a match. Billblend monitors permanent cancellation situations in a transaction and flags them as fraudulent.
Device Identification
Device Identification is a technique for identifying the device from which a transaction is made. This anti-fraud method does not involve checking payment data, but rather the IP address and browser from which the payment is made. If there is a discrepancy with the usual data, the transaction may be refused.
Flag Large Transactions
This is an anti-fraud system aimed at limiting the amount of purchases from one card. After gaining access to a bank card, attackers will try to cash out all the funds as quickly as possible. To combat fraudsters, you can limit the number of transactions by time and amount. If an exceeding of the limit is detected, an additional check will be assigned.
Payer Authentication (3-D Secure)
3-D Secure is a two-step confirmation technology. Increases the security of credit and debit card payments that we make on the Internet. The essence of the fight against fraud is related to the additional step of transaction confirmation. To make a purchase, it is not enough to specify only the card details. To confirm the write-off of money, it is necessary to enter the pin code that the client has set or the code received from the bank that issued the card.
This is one of the most popular fraud prevention tools that companies use and that also takes into account their interests.
Conclusion
Billblend uses different methods to combat payment gateway fraud. The most demanded ones are described above. We also use financial transaction analysis. An additional level of verification can be assigned, for transactions from countries with a high level of fraud, if the familiar IP address of the buyer is different, there have been many payment rejections at this address. All this protects the company from reputational risks and financial losses.
FAQ
What are the ways to combat fraud?
The main ways are user address verification, IP address verification, confirmation of the transaction by CVV code or code from the bank.
How to protect myself from fraud with bank cards?
The main ways – do not leave card data on unverified resources, do not download files from unverified sources.
What should be taken into account when choosing a payment gateway?
When choosing a third-party payment gateway, companies should prioritise security features, compliance with industry standards and fraud prevention experience.
Which countries have high fraud rates:
According to the Online Fraud Guide, some of the countries with the highest rates of online fraud are Israel, Malaysia, Egypt, Pakistan, Ukraine, Russia, Bulgaria, Romania, Lithuania, Nigeria, Nigeria and the countries of the former Yugoslavia.
