PayPal Fraud Protection Advanced

June 14, 2022 | 9 min read

PayPal Fraud Protection ADVANCED

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.

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
Code changes None Minimal Minimal Minimal Minimal
Available to All merchants All merchants All merchants All merchants All merchants
Additional fees No No No No* Yes

* 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.

Let the experts help you navigate the shifting landscape of fraud prevention.


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:

Offer a Seamless Customer Experience

It’s possible for fraud-fighting efforts to backfire, causing more harm than good. Fraud filters, for example, may catch suspicious transactions, but if they add too much friction to the checkout process, frustrated shoppers may abandon their cart and click to another site.

PayPal Fraud Protection Advanced is designed to be an integrated part of the PayPal checkout function. This speeds up the entire process, so you can deliver a seamless checkout experience. It drives conversion rates and encourages repeat business, increasing customer lifetime value.

Stop Fraud in its Tracks

While PayPal is doing all that streamlining at customer checkout, Fraud Protection Advanced is on the hunt for fraud red flags. Scores are generated in real-time, and fraudulent transactions are declined based on customizable parameters. Detailed risk information is available on borderline cases that may require manual review.

Customizable Rule Sets

No two businesses are alike. The ability to customize fraud rules is critical, as it helps maximize protection.

With Fraud Protection Advanced, you can leverage over 200 predefined data features to tailor or adjust your fraud prevention rules. This is highly important in an environment where new threats, evolving market conditions, and shifting regulatory environments are almost daily occurrences.

Field Creation

Using predefined fields, Fraud Protection Advanced allows you to build a wide variety of conditional filters right out of the box. That said, many businesses have specific field sets they use in fraud mitigation situations. With this solution, you may also create custom fields, then use those fields to tailor fraud filters to individual requirements.

Recognizing Risk

The review process for PayPal Fraud Protection Advanced allows you to take a second look at suspicious activity. Automated “accept or decline” decisioning typically handles most of the heavy lifting. In some instances, however, human expertise is required to decide if a payment is fraudulent or legitimate.

Any transactions that call for manual review can be filtered out, and webhooks can be created to automatically notify the merchant when a manual review is needed.

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.

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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