Advanced Features

Fraud Prevention

Enhancing security and mitigating payment risks

Overview

Fraud prevention is a critical component of payment processing. PayOS provides merchants with tools to enhance security by integrating their existing fraud detection systems and leveraging PayOS data to inform risk-based decisions.

How PayOS Supports Fraud Prevention

  1. Integration with Merchant Fraud Engines:

    • Merchants can connect their fraud detection tools to PayOS.
    • Use PayOS-provided data, such as customer behavior and transaction history, to feed into existing risk engines.
    • Merchants have the option to enable third-party fraud services during the session creation call. This integration allows for real-time risk assessment, providing risk scores that can be used in the rules assessment for payment initiation.

  2. Risk Scores and Rules Engine:

    • PayOS generates risk scores for transactions based on a variety of data points (e.g., transaction amount, customer location, payment history).
    • These risk scores can be returned during the session creation call and are crucial for determining available payment methods and authentication behavior.
    • Merchants can configure rules to automatically block or flag high-risk transactions, taking into account the risk scores provided by their third-party fraud services.

Example: Real-time Fraud Detection Flow

  1. Payment Initiation:

    • A payment request is initiated and sent to PayOS.
    • PayOS collects contextual data like IP address, device information, and payment history.

  2. Risk Scoring:

    • The data is processed through PayOS’s rules engine to generate a risk score.
    • The merchant’s fraud engine can receive this score for further evaluation, allowing for dynamic adjustments to payment methods and authentication requirements.

  3. Fraud Response:

    • Low-risk transactions proceed without friction.
    • High-risk transactions trigger additional steps like 3D Secure or multi-factor authentication (MFA).

Secure Data Handling

  • PCI Compliance: PayOS ensures that all sensitive data is handled securely and in compliance with PCI-DSS.
  • Tokenization: Sensitive payment details are converted into secure tokens, reducing the merchant’s exposure to fraud risks.

Example Risk Score Response:

1{
2"transaction_id": "txn_12345",
3"risk_score": 87,
4"recommendation": "manual_review",
5"details": {
6"device_fingerprint": "abcdef123456",
7"ip_address": "192.168.0.1"
8}
9}

Best Practices for Fraud Prevention

  • Regular Monitoring: Merchants should monitor transactions in real-time and take proactive actions on suspicious activity.
  • Update Rules Frequently: Adjust fraud detection rules as patterns and trends evolve.
  • Use Multi-factor Authentication: Encourage customers to enable MFA for high-value transactions.
  • Leverage Data Insights: Use PayOS reports to identify fraud patterns and optimize rules.