With a dubious credit card, fraudsters usually target one merchant to max out the card until someone notices his activities. The resulting mess will have you being contacted by Visa or MasterCard notifying you that the legitimate cardholder just noticed that a large number of purchases not made by them, though your website was charged, and you are about to take a heavy loss for accepting and shipping that transaction.
Mechanics of Fraud Detection in Velocity Checks
A velocity check is made up of three or more variables. But it always includes quantity, data element, and timeframe.
Here are some examples that help frame velocity checks:
The check can be based on various types of data, such as IP address, device ID, credit card number, or payment method.
Potential checks include: How many transactions has a customer performed, spent, as well as orders placed using the same credit card number in the last 24 hours.
With the time frame specified. While it may be common for a single customer to place multiple orders in 24 hours for some businesses, others can view this as a sign of fraudulent activity. Merchants will need to select a suitable timeframe parameter that matches the nature of their business for the velocity checks.
How Velocity Checks Will Help.
The aim of a velocity check is to identify fraud patterns in payment transactions. Recurring patterns and relationships between transactions within a specified (short) period of time are examined.
Whether you are a startup or a bigger presence in the e-commerce scene, credit card frauds expose you to a whole range of vulnerabilities. Take action before it’s too late.
See how we Payment Options can prevent you from losing money. Contact us today to speak to a web security expert.