Because credit card fraud can wreak havoc on the financial side of your business and its reputation, the first proactive step you should take to mitigate the consequences should be implementing a card fraud detection solution.
The reality is that managing payments manually not only makes you liable for financial losses if you accept a fraudulent payment, but you might also end up declining a lot of genuine customers by mistake.
However, with a proper fraud detection strategy, you’ll have no problem avoiding or, at the very least, minimizing the damage of fraudulent transactions.
What does credit card fraud detection do?
In simple terms, credit card fraud detection platforms make your life easier while making it significantly harder for scammers.
They do so by helping you minimize chargebacks and increase the acceptance of legitimate orders by leveraging various behavioral, contextual, and historical data analyzed by artificial intelligence, for the most part.
How to choose a credit card fraud detection platform?
With cybersecurity (opens in new tab) booming, there are so many vendors with different features to choose from.
In essence, it all depends on your requirements. If you’re handling a smaller number of transactions, you can use a system that lets you supervise it manually, as opposed to letting it run in the background.
You should also consider the price and if the platform you’re looking at has a chargeback guarantee so you won’t have to pay for chargeback yourself.
Best credit card detection platforms: how do we test them?
Since we’re not business owners and we don’t have the means of testing these solutions ‘’in the field’’, we decided to evaluate how they perform on paper, but we also took into account user reviews.
First, we examined which prevention tools these companies employ, their main features, customizability options, and how they handle chargebacks. Next, we took a close look at the pricing plans and figured out if their features are worth the price of admission.
Kount (opens in new tab) safeguards the entire customer journey, from stopping credit card payment fraud to stopping account takeovers and account creation fraud.
It accomplishes this by leveraging AI and establishing a trust level for every identity (opens in new tab) and interaction based on a network of over 32 billion transactions. Its AI produces an Omniscore (a transaction safety rating) which can be used in tandem with a flexible policy engine to tweak fraud prevention actions based on outcomes.
This, along with a reasonable price, makes it a viable option for businesses of all sizes and different kinds of online merchants.
It has a monthly minimum of $1000, however, and the pricing depends on sales volume. Still, when you consider there is a chargeback guarantee, the damage is quite minimal.
Clearsale (opens in new tab) employs both artificial intelligence and a team of expert fraud analysts. Here’s how this process works: the AI starts analyzing customer behavior as soon as they arrive at your site. If it recognizes any fraudulent browsing patterns, the order is forwarded to a team that manually checks the report.
The platform is a great fit for both small businesses and large enterprises. The pricing depends on sales volume with two pricing plans at your disposal.
The first is the KPI (key performance indicator) plan where you set your desired KPIs and if Clearsale doesn’t meet them, you receive a discount. The second one is the guarantee plan in which you will get reimbursed if there are any chargebacks.
One of the biggest advantages of using Stripe Radar (opens in new tab) is that its machine learning algorithms have access to data from the entire Stripe network. Because of that, this software can spot growing and recurring fraud risks in real-time.
On top of that, there is also Chargeback Protection, which automates the chargeback dispute process (including evidence collection) and reimburses you for eligible charges.
Stripe Radar is an easy-to-use solution that doesn’t sacrifice customizability. It can handle a lot of the work automatically according to a set of fully customizable rules.
Stripe offers two plans: the enterprise plan, which requires you to request a custom quote, and a pay-as-you-go plan that takes a small percentage of each transaction along with a transaction fee.
Riskified (opens in new tab) is an eCommerce (opens in new tab)-centered platform that uses machine learning to bring you real-time insights. The same algorithm also gives out a detailed explanation as to why it classed a transaction as fraudulent.
It’s worth noting that Riskified doesn’t give out risk scores. Rather, the platform provides you with a simple approve/decline answer so you can choose which ones you will manually review.
However, some users have reported problems with PayPal integration so if your business handles a lot of PayPal transactions, you might experience a few hiccups along the way.
The price depends on transaction volume, but you only need to pay a fee for transactions that generate sales.
Sift (opens in new tab) not only recognizes threats in real-time with machine learning, but it also automatically shares data between banks and customers to identify transactions.
This vendor can help you spot problems that lead to chargeback requests. It collects evidence without any input from the user and submits an automatic response, making it ideal to combat friendly fraud (a type of fraud that occurs when a customer disputes a charge because of confusion or fraud).
For instance, if there are multiple occurrences when customers don’t recognize the charges from your business, Sift AI might suggest changing the description of the transaction with your payment processor.
Pricing is not publicly available.
Say goodbye to credit card fraud
By utilizing these services, you’ll stop credit card fraud from harming your business. Approaching this issue proactively instead of winging it and hoping for the best means you’ll spare yourself and your legitimate customers from a world of trouble.
So if you want to safeguard your business from credit card fraud and keep its reputation spotless, consider implementing some of the credit card fraud detection solutions we outlined here.