Understanding the Transaction Verification Process
Over the years, numerous top-tier merchants have developed sophisticated procedures to verify online transactions and reduce fraud. Despite many virtual carders being aware of these procedures, few understand the implementation of fraud scoring and the order in which these verification methods are applied. This article details several companies' verification procedures to enhance your understanding.
The Risk Management Toolkit
1. **AVS (Address Verification Service)**
2. **CVV (Card Verification Value)**
3. **IP/GEO/BIN Scrubbing**
4. **Cardholder Authentication (VbV/MSC)**
5. **Phone Verifications**
6. **Manual Order Reviews**
7. **Chargebacks & Representments**
8. **PCI Compliance & Data Security**
Address Verification Service (AVS)
-How It Works
- AVS provides a match or non-match result for the billing street number and billing zip code, not the full address.
Implementation
- Available on most internet merchant accounts and payment gateways.
- Gateways typically allow configuration to automatically decline authorizations with AVS mismatches.
#### Benefits
- Easy to implement.
#### Limitations
- Only works for U.S., Canadian, and U.K. cardholders.
- Increasing percentage of compromised cards may still provide valid AVS matches.
#Card Verification Value (CVV)
How It Works
- Provides a match or non-match result for the 3- or 4-digit number on the back of the card.
Implementation
- Available on most internet merchant accounts and payment gateways.
- Gateways often allow configuration to decline authorizations with CVV mismatches.
## Benefits
- Works for almost all cardholder accounts globally.
- Less vulnerable than AVS data as CVV is not stored.
## Limitations
- CVV data cannot be stored for recurring transactions.
# IP/GEO/BIN Scrubbing
# How It Works
- Compares the customer's IP address with their stated geographic location.
- Compares the BIN (first 6 digits of the credit card) with the IP or stated geographic location.
## Implementation
- Integration with services like MaxMind or through shopping carts, billing systems, and payment gateways.
## Benefits
- Fast, cost-effective, and non-intrusive.
- Can block up to 89% of fraud if properly implemented.
# Limitations
- May not be reliable for AOL users due to traffic routing.
- Proxy databases are continuously updated.
## Examples of What IP Geo-Location Can Reveal
## Yellow Alerts
- Free email addresses.
- Customer phone number mismatch with billing location.
- BIN country mismatch.
- BIN issuing bank name mismatch.
- BIN phone mismatch.
## Red Alerts
- Country mismatch.
- Orders from high-risk countries.
- Use of anonymous proxies.
- Orders from known carder emails.
- Use of high-risk usernames/passwords.
- Shipping to known drop shipping addresses.
Case studies
1. ChangeIP
ChangeIP is a DNS and domain name registration provider offering free and custom Dynamic DNS services to over 50,000 users. They faced significant challenges with fraud, losing up to $1,000 per month due to instantly delivered digital goods that were not recoverable if the purchase turned out to be fraudulent.
Implementation
• ChangeIP integrated MaxMind’s fraud detection service to screen transactions in real time.
Results
• After implementing MaxMind, ChangeIP experienced a 90% reduction in losses, significantly improving their profitability and security.
2. MeccaHosting
MeccaHosting, based in Colorado, provides web hosting services. Before integrating MaxMind, they struggled with chargebacks, which were costly and time-consuming to manage.
Implementation
• MeccaHosting integrated MaxMind’s fraud detection service into their order processing system.
Results
• Since the integration, MeccaHosting has not received a single chargeback. On average, 12-15 fraudulent orders per month are flagged by MaxMind, preventing significant financial loss. Over five months, this saved them at least 60 chargebacks and $6,000 in unnecessary costs.
3. Red Fox UK
Red Fox UK is a web hosting and software development company serving small and medium-sized businesses worldwide. They faced challenges with chargebacks and fraudulent transactions, affecting their revenue and operational efficiency.
Implementation
• Red Fox UK implemented MaxMind’s fraud detection solutions to scrutinize transactions.
Results
• By using MaxMind, Red Fox UK increased its revenue by 4% and reduced chargebacks by 90%. The fraud detection system allowed them to better identify and block fraudulent transactions, improving their overall financial health and customer trust.
4. 365 Inc.
365 Inc. specializes in digital media and e-tailing for soccer and rugby, processing over 10,000 transactions per month with a large international customer base. They were experiencing significant losses due to chargebacks, amounting to over $10,000 per month.
Implementation
• 365 Inc. integrated MaxMind’s fraud detection service into their transaction processing system.
Results
• Chargebacks were reduced by over 96%, bringing losses down to less than $500 per month. Most chargebacks now are due to general order disputes rather than fraud. The integration of MaxMind significantly reduced their exposure to fraudulent transactions and improved their bottom line.
By understanding these transactions verification processes, it will increase the chances of you carding successfully because you now know the flaws in the system
Contact me on telegram @bugatecj if you have any questions
Over the years, numerous top-tier merchants have developed sophisticated procedures to verify online transactions and reduce fraud. Despite many virtual carders being aware of these procedures, few understand the implementation of fraud scoring and the order in which these verification methods are applied. This article details several companies' verification procedures to enhance your understanding.
The Risk Management Toolkit
1. **AVS (Address Verification Service)**
2. **CVV (Card Verification Value)**
3. **IP/GEO/BIN Scrubbing**
4. **Cardholder Authentication (VbV/MSC)**
5. **Phone Verifications**
6. **Manual Order Reviews**
7. **Chargebacks & Representments**
8. **PCI Compliance & Data Security**
Address Verification Service (AVS)
-How It Works
- AVS provides a match or non-match result for the billing street number and billing zip code, not the full address.
Implementation
- Available on most internet merchant accounts and payment gateways.
- Gateways typically allow configuration to automatically decline authorizations with AVS mismatches.
#### Benefits
- Easy to implement.
#### Limitations
- Only works for U.S., Canadian, and U.K. cardholders.
- Increasing percentage of compromised cards may still provide valid AVS matches.
#Card Verification Value (CVV)
How It Works
- Provides a match or non-match result for the 3- or 4-digit number on the back of the card.
Implementation
- Available on most internet merchant accounts and payment gateways.
- Gateways often allow configuration to decline authorizations with CVV mismatches.
## Benefits
- Works for almost all cardholder accounts globally.
- Less vulnerable than AVS data as CVV is not stored.
## Limitations
- CVV data cannot be stored for recurring transactions.
# IP/GEO/BIN Scrubbing
# How It Works
- Compares the customer's IP address with their stated geographic location.
- Compares the BIN (first 6 digits of the credit card) with the IP or stated geographic location.
## Implementation
- Integration with services like MaxMind or through shopping carts, billing systems, and payment gateways.
## Benefits
- Fast, cost-effective, and non-intrusive.
- Can block up to 89% of fraud if properly implemented.
# Limitations
- May not be reliable for AOL users due to traffic routing.
- Proxy databases are continuously updated.
## Examples of What IP Geo-Location Can Reveal
## Yellow Alerts
- Free email addresses.
- Customer phone number mismatch with billing location.
- BIN country mismatch.
- BIN issuing bank name mismatch.
- BIN phone mismatch.
## Red Alerts
- Country mismatch.
- Orders from high-risk countries.
- Use of anonymous proxies.
- Orders from known carder emails.
- Use of high-risk usernames/passwords.
- Shipping to known drop shipping addresses.
Case studies
1. ChangeIP
ChangeIP is a DNS and domain name registration provider offering free and custom Dynamic DNS services to over 50,000 users. They faced significant challenges with fraud, losing up to $1,000 per month due to instantly delivered digital goods that were not recoverable if the purchase turned out to be fraudulent.
Implementation
• ChangeIP integrated MaxMind’s fraud detection service to screen transactions in real time.
Results
• After implementing MaxMind, ChangeIP experienced a 90% reduction in losses, significantly improving their profitability and security.
2. MeccaHosting
MeccaHosting, based in Colorado, provides web hosting services. Before integrating MaxMind, they struggled with chargebacks, which were costly and time-consuming to manage.
Implementation
• MeccaHosting integrated MaxMind’s fraud detection service into their order processing system.
Results
• Since the integration, MeccaHosting has not received a single chargeback. On average, 12-15 fraudulent orders per month are flagged by MaxMind, preventing significant financial loss. Over five months, this saved them at least 60 chargebacks and $6,000 in unnecessary costs.
3. Red Fox UK
Red Fox UK is a web hosting and software development company serving small and medium-sized businesses worldwide. They faced challenges with chargebacks and fraudulent transactions, affecting their revenue and operational efficiency.
Implementation
• Red Fox UK implemented MaxMind’s fraud detection solutions to scrutinize transactions.
Results
• By using MaxMind, Red Fox UK increased its revenue by 4% and reduced chargebacks by 90%. The fraud detection system allowed them to better identify and block fraudulent transactions, improving their overall financial health and customer trust.
4. 365 Inc.
365 Inc. specializes in digital media and e-tailing for soccer and rugby, processing over 10,000 transactions per month with a large international customer base. They were experiencing significant losses due to chargebacks, amounting to over $10,000 per month.
Implementation
• 365 Inc. integrated MaxMind’s fraud detection service into their transaction processing system.
Results
• Chargebacks were reduced by over 96%, bringing losses down to less than $500 per month. Most chargebacks now are due to general order disputes rather than fraud. The integration of MaxMind significantly reduced their exposure to fraudulent transactions and improved their bottom line.
By understanding these transactions verification processes, it will increase the chances of you carding successfully because you now know the flaws in the system
Contact me on telegram @bugatecj if you have any questions