Cologne, June 24th, 2004 – Pago, one of the world’s leading specialists for e-payment and risk management, has expanded its range of risk management services. Pago Fraud Screening can minimize the fraud risk of credit card transactions in online business dramatically and reduce the number of chargebacks. The new service analyses credit card transactions within seconds giving a recommendation to the online dealer, to accept, deny or re-check the transaction.

Chargebacks endanger the business success of online shops accepting credit card payment by their customers. If a customer is not the credit cardholder or is not entitled to use the credit card, a chargeback will result as soon as the authorized cardholder refuses payment. In case the shop has already delivered the purchased goods, it will not receive the payment and thus lose money. Besides that, merchants with high chargeback rates are considered to be “bad” merchants by the credit card organisations – high chargeback rates can result in withdrawal of credit card acceptance approval, another threat to any online business.

The aim of Pago Fraud Screening is to prevent credit card fraud before it can occur – which is when a customer transmits its credit card data to the shop. Both credit card data and the other customer information (name, adress etc) are analyzed in real-time and the fraud risk is assessed. If the shop requires the card verification code (CVV2 for VISA, CVC2 for MasterCard) from its customers, this will be checked. If the given credit card number has been issued in the USA, Pago Fraud Screening will utilise the Address Verification System (AVS) for another check. A detailed assessment will then be conducted using the five-tier ebitGuard system:

	The transaction is checked against fraud detection rules specific to the shop‘s business processes and/or industry
	Neural networks – advanced artificial intelligence models –detect fraudulent behaviour and fraud patterns
	The credit card number is compared to negative lists of the card organisations and merchant-specific databases
	Pattern detection engines that detect specific fraud patterns are utilised
	Chargeback and other historical data are used as feedback for ongoing development of rules and models

Pago Fraud Screening is a so-called ‘managed service’, which means that experienced analysts monitor transactions 24 hours a day, seven days a week, enabling detection of new fraud patterns and the timely adjustment of the parameters in the five-tier system.

The result of the assessment process is delivered by Pago Fraud Screening as one of three possible recommendations:

	ACCEPT: transaction should be accepted.
	DENY: transaction should be rejected.
	CHALLENGE: transaction should be re-checked and, under certain circumstances, then accepted.

The merchant receives this recommendation within seconds and can act accordingly.

“We not only expect benefits from Pago Fraud Screening for the individual merchant”, says Rüdiger Trautmann, CEO Pago, “but also a significant and positive effect on the overall chargeback rate in international online credit card usage. As we process a considerable number of credit card transactions on our Pago platform, preventing fraud here will hopefully have quite an impact on the chargeback situation.”

Pago Fraud Screening is already available and can be easily implemented into existing e-payment systems.