Actually, you do. In many cases, fraud follows a pattern. If you're a merchant, and you're getting a lot of fraudulent charges, you'll often get into a discussion with your upstream processor's fraud department about the details and how to mitigate it. I don't work in payments anymore, but as an example of how this works, I was talking a few weeks ago with a merchant who does tens of millions gross every year, but also faces five digits of fraudulent transactions. They sell car parts, so it's quite easy to buy one or two things for a lot of money. While working with their processor, they discovered that a significant amount of fraud was coming from two cities. And not just two cities, but two neighborhoods. And not just two neighborhoods, but two streets.
They simply reject any transaction from that street before even sending things to the processor, and now they're saving tens of thousands of dollars a year.
Processors do their own fraud as well. But, as they're based on heuristics, the more context you can give, the better. Depending on how exactly they do fraud, they may not see a specific kind of fraud coming through one customer, but may be better at seeing fraud spread out amongst customers.
You know your customers and business better than anyone, even your own upstream.
Actually, you do. In many cases, fraud follows a pattern. If you're a merchant, and you're getting a lot of fraudulent charges, you'll often get into a discussion with your upstream processor's fraud department about the details and how to mitigate it. I don't work in payments anymore, but as an example of how this works, I was talking a few weeks ago with a merchant who does tens of millions gross every year, but also faces five digits of fraudulent transactions. They sell car parts, so it's quite easy to buy one or two things for a lot of money. While working with their processor, they discovered that a significant amount of fraud was coming from two cities. And not just two cities, but two neighborhoods. And not just two neighborhoods, but two streets.
They simply reject any transaction from that street before even sending things to the processor, and now they're saving tens of thousands of dollars a year.