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Paysight.io – Fraud & Dispute MitigationObjective: Reduce Visa/Mastercard fraud alerts (VAMP/TC40s) and chargebacks through layered prevention, authentication, and transparency. The measures below show how Paysight.io’s CRM proactively lowers fraud alerts and chargeback risk. The percentages (↓) represent estimated reductions in TC40s/VAMP when each feature is applied.

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Core Measures

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Network Tokens on Opt-in & Rebills (Visa & Mastercard)

Network Token Implementation

Replace card numbers with Visa/Mastercard tokens for ongoing billing. Tokens are more secure, update automatically, and reduce fraud claims.Expected Reduction: ↓ ~30%

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3DS in All Markets (Visa & Mastercard)

3D Secure Authentication

Ensures a transaction is fully authenticated by the consumer. When approved, liability shifts to issuers and fraud flags are avoided.Benefits: Enhanced security and liability protection

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3RI on Recurring Payments (Visa & Mastercard)

3DS Requestor-Initiated Authentication

Use 3DS Requestor-Initiated authentication with device/IP/browser data. Creates a digital trail issuers can verify, reducing “no-auth” fraud flags.Expected Reduction: ↓ ~30%

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Visa Order Insight & CR 3.0 Compliance (Visa & Mastercard)

Enhanced Transaction Transparency

Share metadata (IP, device, login history) with issuers. This transparency helps issuers confirm transactions, cutting friendly fraud disputes.Expected Reduction: ↓ 10–15%

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Consumer Clarity (Mastercard)

Enhanced Billing Details

Shows enhanced billing details (merchant name, product, location) to cardholders via their bank app. Reduces “unrecognised charge” fraud claims.Benefits: Improved cardholder recognition and reduced disputes

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Fraud Scoring

Real-Time Risk Assessment

Scores transactions in real time before capture. High-risk authorisations are blocked, preventing them from turning into fraud cases.Benefits: Proactive fraud prevention and risk mitigation

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Rapid Dispute Resolution (Visa)

Automated Dispute Handling

Automatically refunds eligible disputes before they escalate to chargebacks. Improves user experience and prevents fraud alerts from escalating.Benefits: Faster resolution and improved customer experience

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CDRN (Visa)

Chargeback Dispute Resolution Network

Intercepts unresolved Visa disputes and routes them to merchants for fast resolution, reducing ratios by preventing TC40 records also becoming TC15 (chargeback).Benefits: Reduced chargeback escalation and improved dispute resolution

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Clear Descriptors & Automated Care (Visa & Mastercard)

Enhanced Billing Descriptors

Billing descriptors match the website and include contact info. Automated care responses help resolve issues before cardholders contact banks.Benefits: Improved cardholder recognition and proactive issue resolution

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Expected Impact

Contact SupportFor implementation assistance: [email protected]

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Comprehensive Fraud Prevention Guide

Protecting your business from fraudulent transactions and chargebacks requires a proactive, multi-layered approach. This comprehensive guide provides the tools, strategies, and processes needed to minimize fraud-related disputes and maintain healthy payment processing relationships.
What is Fraud Dispute Mitigation?Fraud dispute mitigation involves implementing preventive measures, monitoring systems, and response protocols to reduce fraudulent transactions and successfully defend against chargebacks. It’s a critical component of maintaining low dispute ratios and protecting your merchant account.

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Understanding Fraud Disputes

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Types of Fraud Disputes

  • Card Not Present (CNP) Fraud: Unauthorized use of stolen card information
  • Identity Theft: Fraudsters using stolen personal information
  • Account Takeover: Unauthorized access to legitimate customer accounts
  • Friendly Fraud: Legitimate customers claiming unauthorized transactions
  • Authorization Issues: Transactions processed without proper authorization
  • Processing Errors: Duplicate charges, incorrect amounts, or processing mistakes
  • Consumer Disputes: Product/service not as described or not received
  • Fraud Claims: Unauthorized transaction claims

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Impact of High Dispute Ratios

Critical Thresholds
  • 1% Dispute Ratio: Industry standard threshold for most processors
  • Exceeding 1%: Risk of account suspension or termination
  • High-Risk Status: Additional monitoring and restrictions
  • Financial Penalties: Increased fees and reserve requirements

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Prevention Strategies

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Pre-Transaction Prevention

1

Implement Fraud Detection Tools

Configure advanced fraud screening and risk assessment tools
2

Set Up Address Verification

Enable AVS (Address Verification Service) for all transactions
3

Enable CVV Verification

Require Card Verification Value for all card-not-present transactions
4

Configure Velocity Checks

Set limits on transaction frequency and amounts per customer

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Advanced Fraud Prevention

Device Fingerprinting

Track and analyze device characteristics to identify suspicious patterns

Behavioral Analysis

Monitor user behavior patterns to detect anomalies

Geolocation Verification

Verify transaction location against customer’s typical patterns

Machine Learning Models

Use AI-powered fraud detection for real-time risk assessment

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Monitoring and Detection

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Real-Time Monitoring

Continuous MonitoringSet up automated alerts for:
  • High-value transactions
  • Unusual spending patterns
  • Multiple failed authorization attempts
  • Transactions from high-risk countries
  • Rapid succession of transactions

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Key Metrics to Track

  • Authorization Rate: Percentage of approved transactions
  • Decline Rate: Percentage of rejected transactions
  • Average Transaction Value: Monitor for unusual spikes
  • Transaction Volume: Track daily/weekly/monthly patterns
  • Chargeback Rate: Disputes per total transactions
  • Fraud Rate: Confirmed fraudulent transactions
  • False Positive Rate: Legitimate transactions flagged as fraud
  • Customer Complaints: Direct fraud reports from customers

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Response Protocols

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Immediate Response Actions

1

Assess Transaction Risk

Review transaction details, customer history, and risk indicators
2

Contact Customer

Reach out to verify transaction legitimacy when appropriate
3

Document Evidence

Collect and preserve all relevant transaction documentation
4

Take Preventive Action

Implement additional verification or block suspicious transactions

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Chargeback Response Process

1

Review Chargeback Details

Analyze the reason code and provided documentation
2

Gather Evidence

Collect transaction receipts, customer communications, and delivery confirmations
3

Prepare Response

Compile compelling evidence to dispute the chargeback
4

Submit Response

File the dispute within the required timeframe
1

Transaction Documentation

Gather receipts, invoices, and processing records
2

Customer Communications

Collect emails, chat logs, and phone call records
3

Delivery Confirmation

Obtain shipping confirmations and delivery receipts
4

Authentication Records

Include 3D Secure, biometric, or other authentication data

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Documentation Requirements

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Essential Documentation

Transaction Records

  • Receipts and invoices
  • Processing confirmations
  • Authorization codes
  • Transaction timestamps

Customer Communications

  • Email correspondence
  • Chat transcripts
  • Phone call records
  • Support ticket history

Delivery Proof

  • Shipping confirmations
  • Delivery receipts
  • Tracking information
  • Signature confirmations

Authentication Data

  • 3D Secure authentication
  • Biometric verification
  • Device fingerprinting
  • IP address verification

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Documentation Best Practices

Documentation Tips
  • Timestamps: Always include precise timestamps for all events
  • Original Format: Keep documents in their original format when possible
  • Clear Labels: Use descriptive filenames and clear organization
  • Backup Copies: Maintain multiple copies of critical evidence
  • Legal Compliance: Ensure all documentation meets legal requirements

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Technology Solutions

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Fraud Prevention Tools

  • Machine Learning Models: AI-powered risk assessment
  • Rule-Based Systems: Customizable fraud detection rules
  • Behavioral Analytics: Pattern recognition and anomaly detection
  • Device Intelligence: Device fingerprinting and tracking
  • 3D Secure: Additional authentication for online transactions
  • Biometric Verification: Fingerprint, facial recognition
  • Two-Factor Authentication: SMS, email, or app-based verification
  • Risk-Based Authentication: Dynamic authentication requirements
  • Transaction Monitoring: Real-time transaction analysis
  • Velocity Checks: Frequency and amount limits
  • Geolocation Services: Location-based risk assessment
  • Blacklist Management: Block known fraudulent entities

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Industry Best Practices

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Merchant Best Practices

1

Clear Communication

Provide clear product descriptions and terms of service
2

Secure Processing

Use PCI-compliant payment processing and secure data storage
3

Customer Service

Maintain responsive customer service for dispute resolution
4

Regular Monitoring

Continuously monitor transaction patterns and dispute trends

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Chargeback Management

Prevention Focus

Implement proactive measures to prevent disputes before they occur

Quick Response

Respond to chargebacks within required timeframes

Evidence Quality

Maintain high-quality documentation for all transactions

Process Improvement

Continuously refine processes based on dispute outcomes

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Troubleshooting Common Issues

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High Dispute Ratios

1

Review Dispute Reasons

Identify the most common dispute reason codes
2

Analyze Transaction Data

Look for patterns in disputed transactions
3

Customer Feedback

Review customer complaints and feedback
4

Process Gaps

Identify weaknesses in current processes
1

Update Fraud Rules

Adjust fraud detection parameters based on findings
2

Improve Documentation

Enhance transaction documentation processes
3

Customer Communication

Improve customer service and communication
4

Process Training

Train staff on dispute prevention and response

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False Positives

Managing False PositivesHigh false positive rates can:
  • Reduce legitimate sales
  • Damage customer experience
  • Increase customer service workload
  • Impact business reputation

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Compliance and Regulations

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Regulatory Requirements

Key Regulations
  • PCI DSS: Payment Card Industry Data Security Standard
  • GDPR: General Data Protection Regulation (EU)
  • CCPA: California Consumer Privacy Act
  • Local Regulations: Country-specific fraud prevention requirements

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Compliance Best Practices

  • Encrypt sensitive customer data
  • Implement access controls
  • Regular security audits
  • Data retention policies
  • Maintain fraud incident logs
  • Report significant fraud events
  • Cooperate with law enforcement
  • Share intelligence with industry partners

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Performance Metrics

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Key Performance Indicators

Fraud Prevention

  • Fraud Rate: Percentage of fraudulent transactions
  • False Positive Rate: Legitimate transactions flagged as fraud
  • Detection Accuracy: Fraud detection system effectiveness
  • Response Time: Time to identify and respond to fraud

Dispute Management

  • Dispute Rate: Percentage of transactions resulting in disputes
  • Win Rate: Percentage of successfully defended chargebacks
  • Response Time: Time to respond to chargebacks
  • Resolution Time: Time to resolve disputes

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Reporting and Analytics

Regular ReportingGenerate monthly reports including:
  • Dispute trends and patterns
  • Fraud prevention effectiveness
  • Customer impact analysis
  • Process improvement recommendations

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Support and Resources

PCI DSS Guidelines

Official PCI Security Standards Council documentation

Fraud Prevention Best Practices

Visa fraud prevention guidelines and resources

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Contact Information

Need Help?
  • Paysight Support: Contact your account manager for fraud prevention assistance
  • Technical Issues: Use the troubleshooting section above for common problems
  • Emergency Response: Follow the immediate response protocols for urgent fraud incidents
Last UpdatedThis guide was last updated on . For the most current information, always refer to the latest version of this documentation.