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Merchants - Fraud & Risk Management


Fraud and Risk Management Tools
iPayDNA’s gateDNA has very comprehensive risk and management tools which works in the background to help you minimize losses from fraud and disputes. These risk tools are used to ensure alerts are triggered when certain transactional patterns or events occur. Our unique risk management tools are the result of gathering data from 3rd party providers such as IP locators and using AI (artificial intelligence) and ruled based algorithm we are able to quickly flag a potential fraudulent transaction. While you are out selling, our system and our operations team are protecting you against unnecessary fraud losses. Every fraud transaction iPayDNA can help you as a merchant detect will undoubtedly save you more money.

Transaction risk management can be categorized into 2 categories: -

A. Pre-Authorization Fraud Scrubbing

B. Post-Authorization Risk Management

A. Pre-Authorization Fraud Scrubbing
Pre-authorization means that the transaction is being scrubbed for risk and fraud before sending the transaction to the acquiring bank for processing.
i. Card Velocity Limits - Our gateway can be customized to reject same card being processed in the last 24 hours, 7 days and 30 days. You can request card velocity limit on your merchant account that suits your risk appetite and business model.
ii. Email Velocity Limits - This works the same way as card velocity limit but on the cardholder’s email address. Transactions are automatically rejected if the threshold is breached for same email within the last 24hours, 7 days and 30 days.
iii. Phone Velocity Limits - The system tracks same phone numbers being used on every transaction. Transactions are automatically rejected if the threshold is breached for same phone number within the last 24hours, 7 days and 30 days.
iv. 3D Secure - Also known as Verified by VISA and MasterCard Secure Code, these protocols ensures that the cardholder enters a PIN or password to authenticate that the credit card belongs to that person. 3D Secure merchant accounts more declined transactions for many reasons and merchants are not fully protected against chargebacks.
v.  IP Match against cardholder billing address - This feature checks to ensure that the IP address where the transaction originates from matches the location of the cardholder’s billing address within a customizable radius in kilometers.
vi.  Card BIN does not match billing address - This feature checks to ensure that the billing address matches the country where the credit card has been issued.
vii.  Card BIN Issuing Black List - As a merchant, you can specify where you do not want to accept transactions from. We match where the card is being issued versus this black list and automatically decline the transaction. This reduces your risk exposure to certain notorious countries where fraud is rampant.
viii. Proxy IP - Our system detects the IP address of the cardholder and if it detects that the cardholder is using a proxy server IP, our system will flag the transaction and alert our risk team and can also alert the merchant.
 ix. Email address is high risk or from a free mail - We check internally against of high risk email address formats and flag the transaction as potential fraud. We also increase the risk score of the transaction if the cardholder email is free sprintf (Yahoo Mail, Gmail, etc.)
x.  Billing address does not match Zip code - Fraudsters uses card billing addresses that are not valid, our system is linked to service providers that tells us whether a billing address is valid. However, this works for only certain countries only.

Post-Authorization Risk Management

Post authorization risk management is how iPayDNA tracks and manage transactions after successful authorization from the acquiring banks.

i.  Phone Verification - Upon completion of the authorization of the transaction, transactions with high risk score can be automatically routed to our call center to verify these transactions. This will provide a voice trail that the cardholder was verified through their phone number and this voice trail is very useful to better represent the merchant against retrieval requests and chargebacks upon any disputes. Note that additional charges apply, do talk to our sales consultant on how you can activate this service for your merchant account to reduce fraud and increase your chances to win in any disputes.
ii.  Delivery Status on Physical Goods - Our gateway can link your transactions to courier companies and get online updates from these courier companies on the delivery status of physical goods sold online. Current courier companies linked to our payment gateway are USPS and Royalmail. This feature is useful in presenting evidence that the goods have been shipped to the cardholder in the event of disputes.
iii.  Retrieval Ratio Monitoring - Retrievals are request from the issuing bank of the cardholder asking for more supporting documents on the transaction performed. Retrieval request can be initiated by the cardholder or the issuing bank. Merchants have to ensure their retrieval ratio is below a certain threshold.
iv.  Chargeback Ratio Monitoring - Chargebacks are request from issuing bank to the acquiring bank to refund the transaction that was performed earlier. Chargeback are treated quite seriously by the Card Associations as a sign that the merchant is either a fraud or that the merchant is not selling goods or services that is acceptable. Chargebacks are deducted from the merchant’s processing amount or the standard rolling reserves. Our Non-Card Payment Channels offers reduced or no chargeback risk to merchants.
v.  Refund Ratio Monitoring - Refunds are made after successfully authorized transactions are settled. Card Associations and acquiring banks only allow a certain refund ratio for each merchant account to avoid any doggy business practices.

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