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Fraud Protection For Small And Medium-Sized Enterprises (SMEs) 

Victims of fraud can be people from all walks of life, corporations, and even entire communities. Due to their potential lack of resources to identify and stop fraud, small businesses can be particularly exposed to it. Payment and invoice fraud are two common types of fraud that impact small businesses. Chargeback fraud remains one of the main issues for every company that accepts credit card payments because it has been on the rise for some years.

Small and medium-sized businesses (SMEs) frequently have a limited management staff and a tight profit margin. They thus don’t have much money to spend on things like fraud prevention for their online shops. They must still make sure they are safeguarding themselves against fraud, though.

Cons Of Not Using Payment Fraud Detection Technology

First of all, manually verifying each order from online businesses is incredibly tiresome and time-consuming in the absence of a payment fraud detection solution. Comparing the order details with different data sources would involve too many other aspects. Human factors and errors during the manual assessment will always mark legal transactions as fraudulent.

Companies must employ more personnel just to check for fraud. Extremely inefficient and expensive, not to mention the risk of losing a client if order verification takes too long.

Remember the main drawback! By routinely demanding chargebacks, some clients take advantage of the chargeback system. If a merchant receives significant chargebacks, payment gateways may blacklist them from accepting online payments.

The Advantages Of A Payment Fraud Detection System

Several components of an order transaction can be reviewed against a wide range of data sources using an automation fraud screening service or payment fraud detection tool. Distance measurements between the IP origin and the shipment or billing address are made possible by IP address geolocation. If the distance is considerable, that may be a fraud order. A buyer’s shipping and billing addresses being different is also quite suspicious.

The utilized credit card and email address are checked against regularly updated blacklists. The blacklists are continuously updated by merchants who use merchant networks and payment fraud detection systems. The merchant can ban the information if a fraudulent transaction uses that email address or credit card. The other merchants using the payment fraud detection system service are immediately protected with such information.

Depending on their risk tolerance and business logic, merchants can create conditions that can cause a manual fraud check. The majority of organizations have unique fraud-handling procedures. Thus the flexibility to customize rules is highly helpful in meeting the demands of each business.

Proxy server detection can alert you to potential fraud attempts. Fraudsters frequently use proxy servers to conceal their location. Employing a proxy server in New York and a con artist in Nigeria might make it seem like they are there.

Time is money in the fast-paced world of online commerce. Automatic fraud screening is quite effective at safeguarding web retailers with huge transaction volumes because it just takes a few seconds. Moreover, automated monitoring is less likely to provide false-positive or false-negative results.

Why Is A Payment Fraud Detection Solution Beneficial For SMEs?

The payment fraud detection system’s fraud screening service examines several purchase specifics, including the order’s email id, IP address, billing/shipping address, bank account, and order quantity or overall sales amount. Additionally, it allows for transaction velocity checks to stop carding attempts and can trace purchase histories by email account or IP address.

Payment fraud detection systems may quickly identify fraud tendencies using the screening results of the different order components and reduce risk using custom rules. So, an efficient fraud protection solution should immediately reject an order or flag it for manual assessment, drastically cutting down on the time and labor needed for fraud review operations.

In our society, fraud is becoming a bigger problem, impacting people, businesses, and even entire economies. Statista projects that by 2023, e-commerce losses due to online payment fraud will total 48 billion US dollars. To prevent financial loss, staying alert and aggressively recognizing fraud is critical.

Criminals use a variety of deceitful tactics to get unauthorized goods, services, or confidential information for themselves or others. The ultimate objective is to benefit themselves, either directly or indirectly.


As technology advances, fraud is continuously changing. This has made it easier for scammers to get beyond security and screening measures. Stopping fraud is a demanding and difficult undertaking to complete. Yet, fraud mitigation is possible with the correct tools.

Thanks to the extensive array of fraud checks performed by payment fraud detection solutions, businesses would undoubtedly gain from incorporating fraud screening into their online storefronts. A firm can easily be destroyed by chargeback fees involving fraudulent orders. Therefore failing to do so is equivalent to committing financial suicide.

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