When it comes to payment partners, one of the most important differentials your company should look for is: how prepared is this service provider to handle fraud attempts? As online sales grow, so does online fraud, making it fundamental to count on robust risk analysis in the payment process.
Originally published on February 22, 2022.
Blog post updated on October 28, 2022.
PagSeguro’s Smart Fraud Prevention technology is built upon over 18 years of experience and a market leadership in online gaming, one of the most frequent fraud targets. Keep reading to know more about it and how it benefits your business.
The constant risk of online fraud in Latin America
E-commerce revenue has massively increased in Latin America in the last few years, especially after the Covid-19 pandemic hit. However, with this evolution, fraud attempts and losses due to fraud increase and harm companies’ revenues, especially medium-sized ones.
The rise in fraud attempts and occurrences happens largely due to the increase in digital sales processes and in moments of financial instability.
Technology and market expertise are fundamental to fighting fraud
As digital processes evolve, so thus fraud technology. So how can your business take advantage of market growth without exposure to fraud and its subsequent financial losses?
PagSeguro has processed transactions in 17 countries in Latin America for over 18 years, making it easier, faster, and more secure for consumers to buy online with no worries. We use information from all entities involved during the transaction process. All together, they are outstanding and reliable tools to distinguish legitimate transactions from fraudulent ones.
With our Smart Fraud Prevention algorithms, using machine learning from more than 100 million transactions processed every year, we decrease fraud occurrences without harming the approval process for legitimate purchases.
Our smart fraud algorithms were created with the online gaming industry in mind, one of the more frequently targeted segments on the internet. This is due to several factors, such as:
• high number of low-cost purchases;
• presence of in-game purchases and in-game currencies;
• younger audience, which might be less aware of fraud risks;
• highly attractive engagement tactics, which might be used for phishing and other fraudulent actions
Besides, there’s the factor of how fraud increases alongside the number of digital processes; since the online gaming market gathers huge numbers, the fraud risk is also higher.
PagSeguro is the leading payment solution provider for online gaming companies, which makes our smart fraud prevention features ready for protecting the digital goods segment as a whole. That’s why we’re your partner to reduce the fraud risks while increasing your approval numbers securely.
How PagSeguro’s Smart Fraud Prevention works
In just a few steps, which are carried out automatically based on machine learning, PagSeguro's Smart Fraud Prevention happens as explained below:
- Customer makes a purchase;
- The merchant sends the purchase to PagSeguro;
- We sends the transaction to the issuer and to PagBank PagSeguro's system;
- Issuer anti-fraud system: If everything is okay, the issuer sends the transaction back to PagSeguro;
- PagSeguro’s Smart Fraud Prevention: all our anti-risk technology features work together to analyse whether or not it’s a fraud attempt;
- All done! If everything is okay, the transaction is approved.
Smart Fraud Prevention’s main features
There are several steps to PagSeguro's risk analysis to make it reliable and robust for each merchant. Check out the main features below:
Artificial intelligence: our models operate through machine learning systems that use all transactions to learn from, meaning the more than 100 million cross-border transactions per year that are processed through PagSeguro are used for metrics and data.
Scoring: Each transaction receives a note, a value number that says how likely that particular transaction is to be fraudulent. We use this score in our risk analysis to distinguish fraudulent transactions from good transactions to improve their performance.
False-positive measuring: this rule can be applied to certain fraud behaviors to ensure total security, regardless of the assigned score. There are also rules for genuine behavior that ensure approval in specific situations, regardless of the assigned score.
Data analysis: our risk rules and analysis team confirm all transaction data and check if they match, such as credit cards, documents, email, name, phone, IP, device, etc.
Personalization: all rules are defined in alignment with the merchant and can be tailored for global profiles or a specific profile associated with one partner.
The security your payment process needs for Latin America
With PagSeguro's one-stop payment solution, your company can sell to Latin America accepting over 140 local payment methods and local currencies. We settle the money into your account anywhere in the world. Accept local payments in Latin America with no need for local entities, no hidden fees, and total transparency.
PagSeguro's partners also count on our expert Smart Fraud Prevention technology, ensuring the security and reliability you need for your operations in Latin America. Talk to our experts now and see how you can take advantage of the growth of e-commerce in Latin America by click below: