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Transaction Monitoring - Best Practices

Our technology and architecture use hundreds of different data sources to manage risk both and the portfolio and account level and to drive real-time decisions for transaction monitoring.

To minimize potential transaction risks, use the following criteria to monitor transactions from merchants in real-time:

  • Create a blocked list of suspected bad sign-ups as well as create an allowed list of the VIP, fully verified sellers, and ensure new merchants are cross-referenced against the list.

  • Analyze the risk by checking seller’s ID, performance, chargeback rates, suspicious behavior, abrupt changes in the activity, Credit Card AVS mismatch, Zip Code to address mismatch, etc.

  • Measure the risk periodically via KPI (Key Performance Indicators), which should include constantly monitor fraudulent cases and rates of Chargebacks and/or ACH returns.

Recommended Monitoring Rules

High Level Rule Set


Transaction Amounts

Monitors transaction amount totals.

Velocity Checks

Monitors the average number of transactions being processed.

Decline frequency

Monitors the number of declines and how frequently they occur.

Duplicative use of Cards

Monitors use of cards for duplicate transactions.

Card Security (CVV) and Address (AVS) Checks

Monitors card CVV and billing address checks for transactions.

Non-offsetting refunds

Monitors occurrences of refunds being issued where offsetting transaction funds are not available for the merchant.

Maximum refunds

Monitors the number of full refunds issued from the merchant.

Daily Disbursement Amounts

Monitors the amount disbursed to an entity daily.

Daily/Monthly Processing Limits

Monitors the amounts processed against the limit set for daily and monthly totals.

Recommended Monitoring Activities

Monitoring Activity


BIN Concentration

Triggered by large influx of transactions via a single BIN.

Explosive Growth/Bust Out

Triggered by an unusually large influx of transactions overall compared to previous averages for the merchant.

Chargeback and Return Rates

Triggered by high amounts of chargebacks and returns under a merchant.

Reactivate after Inactive Period

Triggered by merchants that have been inactive for an extended period of time (i.e. no transaction processing).

Card Testing

Triggered by imitation transactions to test card validity.

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