Antifraud systems

Antifraud systems are software suites that prevent fraudulent transactions. Antifraud solutions analyze every transaction and tag it according to its level of legitimacy.

Traditionally, an antifraud suite comprises a fraud-detection system, a fraud-prevention system, and a fraud-analysis system.

How antifraud systems work

Modern antifraud systems take into account a multitude of parameters to detect fraudulent transactions, such as:

  • Payment amount,
  • Unique bank card tokens,
  • The user’s digital fingerprint,
  • The IP address of the device used for payment,
  • Purchase history,
  • Payment rejection history.

Fraudulent transactions are detected and blocked using rules and filters as well as machine-learning technologies.

Rules limit the opportunities for cyberfraud. Popular rules include:

  • Limiting the number of transactions per period of time,
  • Limiting the amount of a one-time payment or transfer,
  • Limiting the number of bank cards used for purchases by one individual throughout a certain period of time. (This measure helps prevent cybercriminals from using multiple stolen cards in an online store.)

Machine learning helps detect more advanced cases of fraud: for example situations in which card transactions do not raise immediate suspicion but show an aberration from the card holder’s customary behavior. Thus, a user placing an order in an online store from an unknown device and a browser they don’t normally use may be a reason to request identity confirmation.

Depending on the settings, a specific organization’s antifraud system may request additional information from the card holder if it detects a suspicious transaction, automatically block such transactions, or notify the operator of its need for a ruling on its course of action.

Antifraud system applications

Antifraud systems are employed in banks, online stores, and payment systems such as Visa, MasterCard, and PayPal. In addition, antifraud technologies can find application in other areas, such as in video games to secure in-game transactions. The term “antifraud” also applies to solutions that advertisers use to detect and prevent click fraud (generating fake clicks in pay-per-click advertising).

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