Fraud Prevention Tools

When you sign up for an Internet merchant account, choose the Quantum Gateway.  The Quantum Gateway offers the merchant free fraud prevention tools to help reduce chargebacks.

These tools are built right into the payment gateway.  This means you do not have to go to another company and integrate that service into your checkout process.  The Quantum Gateway does all that for you!

Scrubbing the Transaction

Years ago, accepting credit cards online was not as risky as it is today.  Merchants relied mainly on Address Verification Service (AVS).  If the street number and the ZIP code matched, usually the merchant did not have anything to worry about.  Unfortunately, fraudulent transactions started appearing, increasing each year.  The card associations developed a 3- or 4- digit number printed on the card.  Depending on the card association (Visa, MasterCard, Discover, American Express, etc), this number is called the CCV2 / CVC2 / CAV2 / CID.  The card associations then came out with a regulation that prohibited merchants from storing this number - they thought a lot of the fraudulent transactions would decrease.

It started to appear that way, but then the CCV2 / CVC2 / CAV2 / CID started being verified as well.  The card associations seem to be unable to keep up with fraudulent transactions.  This opened the door for other companies to assist merchants and card associations to prevent fraud online.

MaxMind

MaxMind is helps merchants reduce fraudulent activity by scoring. 

GeoIP Checking

This scoring includes looking at the customer's IP address to see if it matches the country (for the billing address).  It looks at the country (Egypt, Ghana, Indonesia, Lebanon, Macedonia, Morocco, Nigeria, Pakistan, Romania, Serbia and Montenegro, Ukraine, or Vietnam) to see if it is consider high risk.  It also looks to see how far away the IP address is from the billing address - the farther away, the higher the risk.

Proxy Servers

Once that is done, MaxMind will look to see if a proxy server is being used.  For example, if the IP address matches an Anonymous Proxy, the risk is higher the transaction is fraudulent.  This means the customer is trying to hide his / her location.  Another way to consider it - if a customer walks into a store in a disguise, and you see that it is a disguise, you might not want to accept the credit card or verify his / her identity.

High Risk Usernames, Passwords, E-Mail Addresses

It then takes a look at the username, e-mail address, and even the password.  MaxMind has a database of high risk usernames, e-mail addresses, and passwords.  If these matches, the higher the risk.  It will also look at the e-mail address to see if it is a free e-mail address.  Unfortunately, free e-mail addresses have a higher risk of fraud attached to them.

BIN Match

It then compares the Bank Identification Number (BIN) (the first six digits).  It takes a look at the billing address (country) to see if it matches an issuing bank in that country.  If you asked for the issuing bank name, it will compare to see if those matches.  Or if you asked for the customer service phone number for the credit card, it will match that for you.

Address & Phone Number Checks

This will compare the customer's phone number (area code) with the billing address to see if they match.  It takes a look at the shipping address to see if it is a known mail drop.

Scoring

After this is all done, you will get a score.  Currently, there are two types of scoring methods, one based on a scale from 1-10 and another from 1-100.  You can choose which scoring system you would like to use in the Virtual Terminal.  We recommend you use the scale 1-100.

This riskScore looks at the specific mismatches and then compares that to millions of transactions in their database.  This scoring will examine the free e-mail address and if the e-mail provider is one that does not see that much fraud, MaxMind will take that into consideration when calculating your score.  And it considers some Internet Service Providers (ISP) like AOL.  Even though the IP address might be based in Virginia, the customer could live in Hawaii.  This is also taken into consideration when providing you a score.

Merchants are different - you might have to take some time to find out what number is suitable for you. 

Dial Verify

Now once that is done, you can call your customers to verify the phone number.  Well, calling each customer can be very time consuming and you might not be able to reach the customer.  However, with Dial Verify, this is handled during the checkout process.  The customer can give you the phone number to call at that moment.  The system will call the number the customer gives, prompting the customer to enter the code that appears on the screen.  This code can be anywhere from 1 - 10 digits, you choose how many digits you want through the Virtual Terminal.  You can even upload WAV files, customizing this process even more.  (If you need professional voice talent - consider Lynn Brooks.  Her fees are very reasonable and her work is impeccable.)

Verified by Visa / MasterCard Secure Code

If the transaction is still in your comfort zone (remember this is all control in the Virtual Terminal),Verified by Visa / MasterCard Secure Code (VBV / MSC) comes next.

Credit Card Authorization

Once the transaction passes through the above fraud prevention tools, the authorization goes through.  I know this might seem a bit too much, but fraudulent transactions cost millions each year to merchants and merchant account providers.  If you have a lot of chargebacks, this might be a way to help reduce them quite a bit.

Virtual Terminal | Recurring Billing | Quantum Vault | QuantumMobile
Batch Uploading | MaxMind Fraud Controls | DialVerify
Address Verification Service (AVS) | Fraud Prevention Tools | Chargebacks