Learn about the threat of payment fraud and how your company can prevent it.
Statista predicts that fraudulent transactions using payment cards will reach $38.5 billion by 2027. Meanwhile, according to Sumsub’s internal statistics, 70% of fraud occurs after initial verification. Therefore, it’s essential for companies to minimize payment fraud at all stages.
We at Sumsub prepared this guide explaining how companies can use automated tools to spot and react to potential payment fraud, as well as other criminal activities.
Payment fraud occurs when a criminal steals payment information to make unauthorized transactions.
“Card-present” fraud occurs when a criminal gets access to a physical card and uses it to withdraw money from an ATM or pay for items at a store. “Card-not-present” fraud takes place when a criminal gets access to card information, such as CVV number, billing address, etc—but not the physical card itself.
The most common types of payment fraud include:
If you want to learn more about each (and how to prevent them), read our in-depth guide on the topic here.
We’ve prepared this checklist with the most important steps for payment fraud protection:
With Sumsub’s Payment Fraud Prevention solution, you’ll be able to scan every transaction in real-time while blocking all suspicious activity. Our company verifies the legitimacy of the provided payment methods, ensuring they belong to the rightful person. This helps companies avoid costly chargebacks while maintaining customer trust. Moreover, these checks can be implemented at various stages of the user lifecycle (withdrawal, payments, etc.), depending on the needs of the company.
With Sumsub, you can choose the type of user actions that will be monitored, as well as steps that users will have to take when taking these actions.
Below, we outline a payment fraud prevention scenario powered by Sumsub:
The risk estimation is based on the following checks:
If everything matches, then the transaction can be approved. If the information provided doesn’t match, the transaction is declined and will require a manual check from the company.