Beata She's blog : Fraud-monitoring system

Today we offer you to study how fraud-monitoring systems work to prevent Internet-fraud.

What is fraud

In the broadest sense, fraud consists of the conduction of fraudulent operations on the Internet. At the moment, there is a large number of fraud schemes in the financial sector, among which:

Carding - carrying out operations using stolen bank card details;

Skimming - a type of carding - copying of bank cards data using ATM hardware solutions;

fishing - capturing of users"" bank card data through fake websites (almost identical to the original ones) by the users themselves entering their payment data on the fraudulent web pages;

voice fishing - extorting bank card details or personal data from users over the phone (often malefactors pose as bank employees).

Fraud is dangerous for online stores, as there is a chance to incur losses on a fairly large scale. A classic situation of fraudulent transaction looks like the following.

1) as a result of any of the types mentioned above of fraud, the attackers take possession of payment card data sufficient to purchase in the online store;

2) malefactors place an order for the purchase of goods or rendering of some service, after which the money is written off the card;

3) the owner of the card, having learned about the unauthorized transaction, reports the incident to their servicing bank and applies to reimbursement of illegally written off funds (chargeback);

4) The bank initiates the refund procedure; however, the burden of responsibility rests on the e-shop as the latter has to refund payments.

If the fraudsters manage to get the goods, the online store's losses can triple. The store returns the money to the cardholder, loses the goods, and is likely penalized for allowing fraudulent transactions, up to imposing restrictions or a ban on accepting online payments.

Operation of fraud-monitoring systems

To avoid such unpleasant situations, online merchants should use fraud-monitoring systems. Technically, fraud monitoring is an algorithm - a set of special rules and filters - that allows evaluating the potential risks of transactions being made and, if necessary, preventing them. The main task of such monitoring is to check every payment in real-time and detect something "unusual and suspicious"

The innovative Wallester https://wallester.com/ platform with built-in fraud detection and prevention system will ensure complete security of money transactions made within your card program. That is why it is necessary to use this firm's services if you want a reliable payment system and support for your business.

The fraud-monitoring system consists of several elements: configurable automatic transaction monitoring, cardholder identification, and card validation mechanisms, as well as ""manual"" transaction monitoring in case of ambiguous situations.

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