PayPal Fraud Protection Advanced: A Powerful New Option for Merchants
Retail is changing. Many of these ongoing shifts have been driven by the rise of eCommerce, and the ways in which merchants and service providers have attempted to accommodate new channels.
Payment services giant PayPal has been at the forefront of this evolution. They’ve changed the game multiple times, rolling out innovative products and services. Take their suite of fraud protection tools, for example.
PayPal antifraud mechanisms are integrated directly into the company’s payment services. This allows merchants using PayPal to offer a seamless customer experience while also being shielded from fraud.
Recently, the company took things to the next level by releasing PayPal Fraud Protection Advanced. The company claims Fraud Protection Advanced is more powerful and customizable than any of their existing fraud protection offerings. What does it do, though? And, how well does it hold up?
In this post, we examine PayPal Fraud Protection Advanced, see how it works, and learn how it stacks up against the company’s other fraud solutions.
What is PayPal Fraud Protection Advanced?
PayPal Fraud Protection Advanced is a suite of tools meant to help merchants like you prevent fraud losses. It is, in effect, a fraud scoring tool available to merchant PayPal users.
Customer data and purchase behavior is contrasted against PayPal’s historical transaction database in real time to help identify transactions that will lead to fraud. This results in a “potential fraud” score; basing decisions on that score increases the chances of spotting suspicious activity in real-time.
At the heart of Fraud Protection Advanced is what the company calls its “2-sided network.” Having worked with millions of buyers and sellers over the last two decades, PayPal has amassed a deep, rich compilation of transaction and risk data. This data is constantly updated and reconfigured using adaptive machine learning to create a baseline. New transactions are compared to the baseline for faster and more accurate fraud identification.
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Fraud Protection Advanced includes tools such as customizable fields and filters that can be self-managed. It also provides access to more detailed risk data reports, and the ability to receive notifications via webhooks. We’ll discuss these features in more detail below.
Fraud Protection Advanced was designed for flexibility. The aim here is to facilitate adaptation in an ever-shifting fraud landscape. The overall goal is to help merchants differentiate between legitimate and non-legitimate transactions in real-time and proactively prevent fraud. The solution works with payments involving credit and debit cards, plus Apple pay, Google Pay, Samsung Pay, and more.
Multiple Tiers of PayPal Fraud Protection
We’ve already written extensively about PayPal’s Seller Protection program. In a nutshell, if a transaction meets PayPal requirements, this no-cost service will help prevent sellers from losing money to claims and chargebacks.
The company also has basic fraud tools in the form of customizable prevention rules. This solution leverages existing fraud tools such as Address Verification, CVV verification, and merchant-created risk thresholds. You can implement and adjust this package at no extra cost.
Beyond these basic safeguards, PayPal has two optional levels of premium fraud-fighting tools. Neither is set up by default; you must enable them.
|Basic Fraud Tools||Premium Fraud Management Tools|
|Risk Thresholds||Address Verification Checks (AVS)||Card Verification Value Checks (CVV)||PayPal Fraud Protection||PayPal Fraud Protection Advanced|
|Risk rules used to detect fraud||Customized velocity checks||Select all or part of addresses to verify||Select if you want to verify card data||Fixed set of rules including geolocation and device information||Customizable set of rules that you can create and manage|
|Additional features||None||None||None||None||Review transactions and receive webhooks|
|Available to||All merchants||All merchants||All merchants||All merchants||All merchants|
* Additional fees dependent on your pricing model.
PayPal Fraud Protection is designed for small- to mid-sized businesses. The solution analyzes card transactions and provides fraud scores in real-time. This lets you more accurately decide on a payment’s legitimacy. It reduces false positives and minimizes chargebacks in the process.
The company’s newest fraud solution was specifically developed for enterprise-level businesses. PayPal Fraud Protection Advanced builds on preexisting Fraud Protection services, creating a more robust solution with additional features and customization.
Advanced Features for Better Results
The main struggle that most merchants have with fraud management is timing. By the time most fraud is discovered, it’s too late to stop it from happening. PayPal Fraud Protection Advanced lets you be less reactive and more proactive in your fraud-fighting efforts.
Fraud Protection Advanced lets you:
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No one goes into business planning to struggle over chargebacks and fraud. With Fraud Protection Advanced helping cut down on occurrences, you’re freed to focus on other, more profitable endeavors, like growing your business.
Is Fraud Protection Advanced Free?
PayPal offers some rudimentary protections that are included in their general pricing. For the most part, these services are openly available outside of PayPal, as well. This includes 24/7 account monitoring, buyer authentication through Verified by Visa and Mastercard SecureCode, Address Verification Service, and so on.
PayPal’s basic Fraud Protection suite adds additional features. This includes the ability to filter out unusual orders, identify suspicious activity based on IP addresses, and block transactions originating from high-risk ZIP codes or addresses. You will need to enable these features, but there is no additional charge.
Fraud Protection Advanced includes all the above and more, but it doesn’t come free. The premium package includes features like automatic transaction acceptance and/or rejection lists, more robust risk filter systems, and the ability to create custom fields, filters, and rules for accepting or rejecting payments.
As of this writing, the service was available for a flat rate of $10/month plus $0.05 per transaction. If fraud is an ongoing problem for your business, it might be worth the investment. We recommend researching cost-efficiency before signing on, though.
PayPal Fraud Protection Advanced: Enough Protection?
If you consistently use PayPal for accepting payments, it only makes sense to take advantage of the tools included with the service. As we mentioned, paying extra for Fraud Protection Advanced could be cost-effective, but it will depend on your situation.
There’s no doubt that PayPal Fraud Protection Advanced is a great start for any fraud prevention plan. Take care, however, not to be lulled into a false sense of security.
Fraud Protection Advanced is just one aspect of PayPal fraud prevention. In fact, fraud prevention itself is only one aspect of overall chargeback management. Efficient chargeback prevention and risk mitigation require a multi-tiered approach to combat the root causes of chargebacks.
We’ve seen the benefits of implementing all the fraud prevention tools available to you. Ultimately, however, these problems cannot be completely prevented through anti-fraud technology. To be effective, you need an overall strategy to encourage long-term chargeback reduction, and to ultimately prevent chargebacks.
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