For high-risk merchants, fraud prevention isn’t just about stopping criminals — it’s about keeping your merchant account open. Card networks terminate accounts that breach chargeback thresholds regardless of whether the chargebacks are from fraud or legitimate disputes. Effective fraud prevention directly protects your processing infrastructure, not just your revenue. DozyPay’s fraud prevention system is integrated into every merchant account and operates across multiple layers of the transaction stack.
The Four Layers of DozyPay’s Fraud Prevention
Layer 1 — Pre-Transaction Screening
Before a transaction is even submitted for authorisation, DozyPay’s fraud engine evaluates the request against multiple risk signals:
- Device fingerprinting — identifies returning devices regardless of browser or IP changes
- IP geolocation — flags transactions from high-fraud regions or IP addresses on known fraud lists
- Velocity checks — detects card testing (multiple rapid transactions) and unusual frequency patterns
- BIN verification — confirms the card’s issuing bank country matches the stated billing country
- Email and address validation — identifies disposable email addresses and non-deliverable billing addresses
Layer 2 — 3D Secure 2.0 Authentication
3DS2 is DozyPay’s primary tool for shifting chargeback liability. Every authenticated transaction where the cardholder completes the authentication step transfers fraud chargeback liability from you to the issuing bank. DozyPay implements 3DS2 across all accounts with risk-based configuration — approximately 95% of legitimate transactions pass frictionlessly with no customer action required.
Layer 3 — Pre-Chargeback Alerts
DozyPay integrates with Ethoca and Verifi — the two major pre-chargeback alert networks — to give you advance warning when a customer initiates a dispute with their bank. You receive the alert before the chargeback is formally filed, giving you a window (typically 24–72 hours) to refund the transaction and prevent the chargeback from being recorded against your account. This is the most effective single intervention for maintaining chargeback ratios below termination thresholds.
Layer 4 — Post-Transaction Monitoring
DozyPay’s dashboard provides rolling chargeback ratio monitoring, dispute status tracking, and transaction flagging for patterns that indicate emerging fraud campaigns. Automated alerts notify you when your ratio approaches thresholds that require action, well before reaching card network monitoring programme levels.
Fraud Prevention Features by Category
Feature | What It Prevents |
Card testing detection | Fraudsters testing stolen card lists with small transactions before making large fraudulent purchases. |
Velocity limits | Coordinated fraud attacks using multiple stolen cards in rapid succession. |
3D Secure 2.0 | ‘Friendly fraud’ (legitimate cardholders falsely claiming transactions were unauthorised after receiving goods/services). |
BIN/IP country mismatch alerts | Cross-border fraud using cards stolen from one country and used from another. |
Pre-chargeback alerts | Disputed transactions becoming formal chargebacks that damage your ratio and trigger processor reviews. |
Descriptor management | ‘Unrecognised charge’ disputes from customers who don’t recognise the transaction — preventing avoidable chargebacks. |
Blacklist management | Known fraudulent cards, emails, and device IDs blocked from completing transactions on your account. |
Frequently Asked Questions
What’s the difference between fraud and a chargeback?
Fraud is the deliberate unauthorised use of a payment method. A chargeback is the formal dispute mechanism that reverses a transaction — it can be initiated for fraud or for non-fraud reasons (item not received, not as described, subscription cancellation dispute). For merchant accounts, both contribute to your chargeback ratio. The distinction matters because different prevention tools address different dispute types: 3DS2 addresses fraud chargebacks; clear terms, good customer service, and subscription management address non-fraud disputes.
How do pre-chargeback alerts work in practice?
When a customer calls their bank to dispute a charge, the bank sends an alert through the Ethoca or Verifi network to DozyPay. DozyPay notifies you and you have a window — typically 24–72 hours — to issue a refund. If you issue the refund within that window, the customer’s bank closes the dispute, no formal chargeback is filed, and your chargeback ratio is unaffected. If you don’t respond in time, the chargeback is formally filed and counted against your ratio.
What chargeback ratio is safe for a high-risk merchant account?
Visa’s Risk Programme monitoring starts at 0.9% of monthly transactions. The High Risk Programme threshold is 1.8%. For high-risk accounts, DozyPay recommends maintaining a ratio below 0.75% to provide buffer against month-to-month variation. Pre-chargeback alerts, 3DS2, and good descriptor management make this achievable for most legitimate high-risk businesses.
Can fraud screening block legitimate customers?
Yes — over-aggressive fraud screening causes false positives that decline legitimate transactions. DozyPay’s risk configuration is tuned for each merchant category to minimise false positives while maintaining effective fraud detection. High-risk categories with legitimately unusual transaction patterns (burst traffic, international orders, high-value purchases) are configured with appropriate thresholds rather than applying standard retail parameters.
Is the fraud prevention system included in all DozyPay accounts?
Yes. Device fingerprinting, velocity checks, IP screening, 3DS2, and pre-chargeback alerts are included as standard across all DozyPay merchant accounts. There are no tiers or add-on packages — fraud prevention is built into the infrastructure because it protects both the merchant and DozyPay’s acquiring relationships.
Get fraud prevention built into your merchant account at dozypay.com/contact — included as standard with every account. |