A flagged transaction is often a misleading term for which merchants may interpret as a fraudulent transaction. However, merchant services providers such as iPayTotal, only issue a flag on a transaction for “potentially” fraudulent or suspicious activity.
In reality, not all flagged transactions are indeed fraudulent. This procedure is merely for the safeguarding of a merchant’s account as well as for its reputation against the possibility of fraud.
For example, according to Financial Fraud UK report, in 2016 financial fraud losses resulted in £768.8 million. — However, “prevented fraud” totalled £1.38 billion.
The anti-fraud measures undertaken by the solutions provided by payment solutions companies like iPayTotal have helped businesses to secure £6.40 in every £10 of attempted fraud transactions.
How are transactions flagged?
iPayTotal has a risk audit team in place, ready to update any transactions that are flagged, processing them as either authorised or cancelled.
With a built-in anti-fraud detection system through iPayTotal’s unique payment gateway, transactions that seem fraudulent are flagged immediately through its robust, integrated API systems.
Why is a transaction flagged?
A transaction from a merchant’s customer’s credit card may be flagged for a number of reasons. One of the main reasons is “behavioural”.
This means that any obvious change in a customer’s credit card transaction such as, for example, being used primarily within a certain locale and then suddenly being used miles and miles away for the transaction may be indicative of a stolen credit or debit card.
There are processes and procedures, which are automatically installed to flag transactions and notify the merchant services provider to ensure one of two things: either to approve the transaction, in that it is “not fraudulent” or cancel it in that it is indeed fraudulent.
Here is a brief list of the chief reasons for flagging transactions:
- Multiple identical transactions from the same credit card and/or IP address within a short period.
- Previously reported IP addresses from which fraud has been detected and is now used in a transaction.
- High-risk countries.
- Transaction amounts that exceed $5,000.
What to do if a transaction is flagged?
It is vital for the merchant to maintain its reputation. Customers, innocent customers, may find this “flagging” or rather the cancellation of a transaction as something peculiar; and since convenience is what a customer is looking primarily to achieve in his or her purchasing cycle, a flagged transaction ought to be taken seriously and acted upon speedily.
The rules state that a merchant has 72 hours to rectify this flag. If it is not rectified (IE: removed) then the money will return to the customer’s account automatically. This is not what a merchant wants – neither for its customer nor for its business.
Flagged does not mean fraud
Indeed, many flagged transactions are full of the potential for fraud. This is a preventative measure upon which merchants can rely to prevent fraud. It’s simply a safety measure.
Flagged transactions should therefore not be seen as something to indicate fraud, but rather to view it as an excellent service to help prevent any fraud.
iPayTotal takes special pride in offering this to its merchants so that no funds are lost due to fraud or unmanaged flagged transactions. — The risk audit teams work manually on all transactions flagged for review.
A flagged transaction is not a hold on a transaction, but rather a notification to investigate.
Secure your merchant account
Owing to this seamless and highly innovative system, iPayTotal saves its merchants the ordeal of cancelled transactions, customer dissatisfaction and most importantly a true reduction in real fraudulent activity on their website.
Merchants around the world are encouraged to have their website checkouts integrated with a superior and award-winning gateway for which iPayTotal offers its merchants, especially high-risk merchants.
Call iPayTotal today and take advantage of something that can only benefit you and your customers.
Call +44 800 776 5988 or email firstname.lastname@example.org today.