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How Merchants Can Reduce Payment Gateway Fraud

Blog post from Basis Theory

Post Details
Company
Date Published
Author
Basis Theory
Word Count
972
Company Posts That Month
8
Language
English
Hacker News Points
-
Post removed?
No
Summary

Payment gateway fraud involves card-not-present purchases made with invalid, stolen, fabricated, or compromised card details, exposing merchants to lost goods, chargebacks, fees, and possible disruption or termination of payment-processing relationships. With card-not-present fraud losses projected to rise sharply, merchants remain ultimately accountable even when processors or third-party security providers handle transaction services. Effective prevention requires balancing fraud reduction against unnecessary declines and customer friction through measures such as address and card-code verification, 3-D Secure authentication, transaction and volume limits, and custom risk scoring. The text recommends that merchants strengthen control by using tokenization to securely store card data, automating fraud assessments before submitting transactions, routing approved payments to suitable processors, and evaluating alternate routing after soft declines, particularly when operating across multiple gateways or processors.

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