The right fraud prevention software helps you protect your bottom line while giving your customers a smooth, secure experience.
Getting it right means fewer disputes, lower fees, and ultimately, a more trustworthy relationship with your customers.
Key Features to Look for in Payment Fraud Prevention Software
3D Secure
3DS2 shifts chargeback liability to banks for authenticated transactions. Choose software that integrates this protocol seamlessly, applying step-up authentication only for high-risk purchases. This keeps checkout friction low while protecting revenue.
Real-Time Screening
Fraud happens in milliseconds. Your software must analyze transactions instantly, flagging potential issues like mismatched billing addresses, sudden high-value orders, or devices linked to past fraud.
The best solutions don’t just identify suspicious patterns, they do it without adding noticeable delay to the checkout process.
Chargeback Alerts and Dispute Automation
Look for fraud prevention software that offers real-time chargeback alerts and dispute management tools. These features allow you to respond quickly to chargebacks, collect supporting evidence, and contest illegitimate claims.
Some tools also provide insights into chargeback trends, helping you identify patterns that can lead to future fraud attempts and adjust your strategy accordingly.
Additionally, many payment processors impose penalties for high chargeback rates, and too many chargebacks can lead to account termination. Software that helps you manage chargebacks effectively can help keep your merchant account in good standing and prevent penalties from accumulating.
KYC and Identity Verification
High-risk sectors need robust identity checks beyond basic card verification. Prioritize solutions offering multiple verification methods including biometric scans, document verification, and liveness detection to confirm customers are who they claim to be.
For subscription businesses, comprehensive verification should include email and phone validation to combat free trial abuse and prevent account takeovers. These measures create additional security layers that protect recurring revenue streams without creating excessive friction for legitimate users.
AI with Low False Positives
One of the biggest challenges for high-risk merchants is the balance between effective fraud prevention and ensuring a smooth customer experience.
A system that flags too many transactions as fraudulent can lead to false declines, which can alienate customers and cost you sales. However, a system that doesn’t catch enough fraud is just as harmful.
Look for fraud prevention software that leverages AI and machine learning to continuously analyze transaction data and learn from trends.
With real-time fraud detection, these systems should be able to spot patterns indicating fraud (such as unusual shipping addresses, mismatched IP locations, or device fingerprints) and flag them for review while allowing legitimate transactions to go through.
The goal is to reduce fraud while ensuring minimal disruption to the checkout process.
How FastoSafe Helps High-Risk Merchants Prevent Fraud and Chargebacks
At FastoSafe, we understand the challenges faced by high-risk merchants, especially those dealing with excessive chargebacks. Here’s what we bring to the table.
Real-Time Transaction Monitoring
Fraud can change in an instant, especially in high-risk industries. A delay of even a few hours in identifying suspicious activity can lead to significant financial loss.
Real-time transaction monitoring checks multiple data points (such as IP location, device fingerprints, and purchase history to quickly spot any irregularities).
For instance, a large booking made on a new device in a known high-risk region will trigger an immediate review, while repeat CBD orders from a trusted customer proceed without interruption.
Platforms like FastoSafe use real-time alerts paired with dynamic risk scoring to block fraudulent transactions while allowing valid sales to continue smoothly. This balance is essential for industries like gaming, where false declines could drive away loyal users.
Dynamic Authentication with 3D Secure
Static verification methods are no longer enough to keep up with evolving fraud tactics.
Look for fraud prevention tools that offer dynamic authentication, such as 3D Secure 2.0. This technology assesses the risk of each transaction in real time, requesting additional authentication only when necessary.
For instance, a familiar customer making a late-night purchase from their regular device won’t face any hurdles. But if the transaction involves a large sum from an unfamiliar location with mismatched shipping details, 3D Secure kicks in with extra steps like a one-time code or fingerprint scan.
Chargeback Alerts and Evidence
Fraud can cost far more than just the value of the transaction, each $100 in fraud often ends up costing your business $360 when you factor in fines, operational costs, and potential lost revenue.
Modern fraud prevention tools can alert you as soon as a dispute is filed, allowing you to intervene before it escalates to a chargeback. Look for systems that partner with networks like Ethoca and Verifi, offering real-time alerts when customers challenge a charge.
This allows you to act quickly, issuing refunds before a chargeback request is made. For example, a travel agency can resolve a “services not rendered” claim by providing booking and delivery evidence within hours.
Compliance with Global Standards
High-risk businesses are under constant scrutiny, not just by payment processors, but also by regulators. The requirements differ across industries, but compliance is a must.
For businesses in the THC or CBD sectors, age verification and proof of regulatory compliance are essential. Getting this wrong could lead to fines or even the loss of your ability to process payments.
Smart fraud prevention services help ensure compliance by automating the necessary checks, removing the need for manual oversight. This way, you can stay focused on growing your business, knowing that the compliance aspect is taken care of.
Payment Gateway Integration
The best fraud prevention tools integrate seamlessly with your existing payment systems, so customers experience no interruptions during checkout. Whether you’re using Shopify, Stripe, or a custom gateway, your fraud prevention solution should be flexible and easy to implement.
For example, if you’re a CBD business running a high-volume sale on WooCommerce, intelligent fraud protection will adjust automatically, ensuring legitimate transactions go through while blocking suspicious ones. This is also true for mobile experiences.
When your customers are booking travel deals or making in-game purchases, they expect frictionless payment processing, including Face ID or Touch ID functionality. With the right fraud protection, that’s exactly what you’ll deliver.
Get in touch with us today to see how FastoSafe can help you safeguard your business and reduce fraud.
