Fraud prevention involves the strategies, tools, and processes a business uses to stop fraudulent payment transactions before they happen. This is especially critical for Card-Not-Present (CNP) transactions. Payment processors like Stripe have sophisticated, machine-learning-based fraud prevention systems (like Stripe Radar) that analyze every transaction for signs of risk.
Frequently Asked questions (FAQs)
- How does Stripe help prevent fraud?
Stripe’s systems analyze thousands of signals for each transaction—such as IP address, email history, and buying patterns—to assign a risk score and block potentially fraudulent payments automatically. - What can I do to prevent fraud as a merchant?
For in-person payments, always favor Tap to Pay or Chip over manual entry, as they are much more secure. For payments taken over the phone, ask for the CVC and billing address. Be wary of unusually large or suspicious orders. - Are in-person payments less risky?
Yes, significantly. The presence of the physical card and its security features (EMV chip, tokenized contactless data) makes fraud much more difficult. This is why Card-Present transactions have lower fees.
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