
Blacklisting and Whitelisting
Blacklists and whitelists are among the common mechanisms for fraud management among e-commerce companies. Read all the information here.
In payment, blacklisting is a fraud management method intended to protect against payment fraud. It consists of a list or database of customers which have attracted attention. In most cases, blacklisted individuals have a history of insolvency or fraud attempts and are therefore blacklisted as "bad" clients. The goal of a blacklist is to detect fraudulent and high-risk customers to minimize payment loss or chargebacks.
Blacklisting is performed primarily by fraud screening software. These monitor customer data through a variety of filters, such as region, IP address, credit card number and e-mail address. Customers are automatically placed on the blacklist, intervening before the transaction is completed. In order to protect honest customers, the system compares the aforementioned criteria with the data of a Blacklist customer. If the comparison is positive, the transaction is rejected and other programs send the fraudulent details to the relevant cyber security authorities.
A blacklist can be administered internally by a company, for example, by a payment provider. This has the advantage of listing precisely the customers who have negatively affected the company and therefore offers a good overview.
Credit card companies such as Visa and MasterCard also use blacklists to identify buyers who have violated the rules of the company. The Member Alert to Control High-Risk (MATCH) also lists customers who were caught doing fraud or money laundering. Additionally, customers who provoked a noticeably high number of chargebacks or who were insolvent will be registered. Who is on the list is not determined by the credit card companies, but by the respective acquiring banks.
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