Fraud Prevention Strategies at Peach Payments

Preventing fraud requires a multi-layered approach. At Peach Payments, we employ a variety of advanced fraud prevention strategies to protect both our merchants and their customers. Here’s how we approach fraud protection at every stage of a transaction:

1. 3D Secure (3DS) – Adding an Extra Layer of Authentication

In South Africa, 3D Secure (3DS) is mandatory for card-not-present (CNP) transactions, providing a critical layer of security. This authentication step ensures that the cardholder verifies their identity during the payment process. When enabled, 3DS provides:

  • Authentication during payment: Before a transaction is completed, the cardholder must authenticate using something they know (e.g., a one-time password or biometric data), which significantly reduces the likelihood of fraud.

  • Shift of liability: With 3DS in place, the liability for fraudulent transactions shifts from the merchant to the card issuer, protecting merchants from financial loss.

At Peach Payments, 3DS is implemented to comply with regulatory requirements and to help merchants prevent CNP fraud. Merchants must ensure 3DS is active to meet compliance standards and reduce their fraud risk.

2. Velocity Checks – Identifying Unusual Activity in Real Time

Velocity checks monitor the frequency and volume of transactions in a given period. By tracking transaction patterns, these checks can flag unusual behaviour that may indicate fraudulent activity. For example:

  • A customer making multiple transactions within minutes or hours.

  • A high number of attempted transactions from a single card or IP address in a short period.

  • Abnormal purchase sizes or frequencies that fall outside typical transaction behaviour for that merchant.

By flagging suspicious transactions in real-time, we can block or challenge potentially fraudulent transactions before they are processed, reducing the risk for merchants.

3. Plausibility Checks – Ensuring Logical Transaction Data

Plausibility checks analyse whether the transaction details make sense in the context of known patterns and data. This includes checking:

  • Shipping and billing address consistency: If the shipping address is vastly different from the billing address, or if the addresses don’t match up with known locations, the transaction may be flagged for further investigation.

  • Geographic location analysis: Transactions originating from high-risk countries or mismatched geographies are scrutinised.

  • Unusual product orders: Large quantities of high-value items ordered in a short period can indicate a fraud attempt.

Plausibility checks help us identify discrepancies that could indicate fraud before the transaction is approved.

Why These Strategies Matter

Each of these fraud prevention strategies plays a vital role in helping Peach Payments maintain the security and integrity of the payment system. By implementing advanced fraud detection tools, we can:

  • Reduce chargebacks: Identifying fraudulent transactions before they are completed helps minimize chargeback risks for merchants.

  • Protect customer data: Ensuring that only legitimate transactions are processed helps protect cardholder data from theft.

  • Ensure compliance: Meeting the security standards set by regulatory bodies is crucial for maintaining trust and security in the payment ecosystem.