Learn about what payment screening is, when it can be used, and how it differs from transaction monitoring.
As fraud continues to grow, there is an urgent need for reliable transaction monitoring and payment screening tools for all types of businesses. We’ve already covered transaction monitoring in-depth. But what about payment screening? Read on to learn everything you need to know.
Payment screening is a financial security measure used to detect and prevent fraudulent transactions, usually during the onboarding process. It is used by financial institutions and other businesses to analyze and review financial transactions for fraud detection and/or compliance with regulations.
Payment screening involves assessing transaction details and patterns, such as their size, timing of withdrawals, and background of parties involved. This helps in preventing fraudulent transactions, ensuring regulatory compliance, and maintaining the security of financial systems.
Both transaction monitoring and payment screening happen in real time and are aimed at detecting fraudulent transactions. However, there are differences.
Payment screening is typically done at specific moments in the customer lifecycle, such as the onboarding process or when large transactions are attempted.
Transaction monitoring typically involves ongoing analysis of a customer’s entire transaction history and behavior over time to gain a comprehensive view of their financial activities. This process is more retrospective than payment screening, as it focuses on the overall financial activity of an account rather than specific individual transactions.
Both transaction monitoring and payment screening can successfully identify:
In addition, transaction monitoring and payment screening enable setting specific rules for checking transaction data.
The payment screening process typically involves several steps (which can be adjusted) to identify potentially fraudulent transactions:
Payment screening helps businesses identify, prevent, and report illicit activities as follows:
Sumsub’s Transaction Monitoring solution helps businesses detect and prevent fraudulent transactions while staying compliant with AML regulations. Sumsub’s continuous monitoring ensures ongoing security even after the initial onboarding process is complete, as 70% of fraud cases happen after the initial checks are passed. Here’s what it can prevent:
By swiftly detecting fraudulent transactions, institutions can prevent financial losses associated with fraudulent activities, such as unauthorized transactions and account takeovers. This not only minimizes financial losses for companies, but also protects their reputation and customer trust.
AML regulations require financial institutions to detect and report suspicious transactions related to money laundering and/or terrorist financing (ML/TF). Transaction Monitoring employs advanced algorithms using AI and Machine Learning to detect unusual or high-risk transactions that could be related to ML/TF. By identifying and submitting SARs promptly, financial institutions reduce the risk of money laundering, which can lead to significant financial and reputational damage.
Sumsub’s Transaction Monitoring ensures that financial institutions maintain full regulatory compliance, reducing the risk of costly penalties and regulatory actions.
Chargebacks happen when customers dispute a transaction and request a refund from their financial institution. Transaction Monitoring helps in identifying problematic transactions at the outset, reducing the likelihood of disputes that can harm customer relationships.
Payment screening works by analyzing transaction data in real-time, applying predefined rules and algorithms to identify potentially fraudulent or suspicious activities.
Sanctions payment screening is a financial security process that involves checking transactions against government-issued lists of sanctioned individuals, entities, or countries to ensure compliance with international sanctions regulations.