What is Payment Blacklisting?

Reduce Financial Losses With Blacklisting

what is blacklisting

Online businesses that process e-payments need to pay attention to fraudulent activities and keep an eye on their potential financial losses. How can blacklisting help you protect your customers and keep your business away from fraudsters?

Identity theft, such as using stolen credit card details for personal gain without the cardholder’s consent, is one of the most feared white-collar cybercrimes of today. Even though cybercriminals are smart with their attacks, some tools can help you effectively lower the risk of fraud on your website. One of them is blacklisting.

What is blacklisting?

Blacklisting refers to tracking and recording customers who show awkward tendencies. The system detects untrustworthy customers based on several filters, each of which checks the users’ authenticity in their transactions.

Customers’ regions, IP addresses, credit card numbers, and email addresses are all monitored and investigated before allowing the transaction to go through. This work happens in no time during checkout, so it doesn’t affect the user experience.

Here are all blacklist rules you can set:

Card fingerprint
IP address
IP country
Metadata
Email address
User-agent
Language
Card country
Card BIN

The listed details are then matched with the information stored on a blacklist. If there’s a positive match, the transaction is rejected.

There is also a blacklist community of merchants. Thousands of merchants share and exchange information to create a master list of blacklisted individuals.

Even though it seems like an effective solution, you need to remember that blacklists can also block legitimate transactions. According to Riskified, 40–70% of declined orders are legitimate and should have been approved.

So, blacklists work well to block orders and filter out fraudsters, but they also increase false declines. Plus, fraudsters could use methods that “fool” the blacklists. For instance, they could constantly change the details they provide when placing orders online.

The advantages of blacklisting

Even though the solution is not ideal, blacklisting comes with several benefits for online businesses.

Business protection. With blacklisting, you can track and record users who show unnatural behavior, which helps you act effectively against fraudsters. You can then exclude suspicious users by location, physical address, IP address, credit card details, email address, etc.
Automated solution. Transactions are checked during checkout and blocked automatically when suspicious, saving you time. You can create custom blacklisting rules, and the magic happens by itself. However, take note that blacklisting is restricted to known variables, so it can lead to accidentally blocking legitimate users.
Up to date information. The effectiveness of blacklisting depends on how well and how often the list is updated and verified. If you work with a reliable payment platform, you don’t have to worry about maintaining blacklists. The payment platform will take care of it and update the list regularly.

Blacklisting solution may improve your company’s credibility

The credibility of any brand lies in how safe the customers feel when dealing with its website.

Blacklisting helps keep your business secure and prevent fraud before it affects your business. It’s especially effective for blocking bot traffic. Blocking suspicious orders based on failed payment transactions can improve your company’s credibility and make customers more willing to buy from your website.

Still, the system itself is not ideal, so make sure your business is backed by some other fraud prevention tools.

If you’d like to know more about blacklisting rules and how to add them to your SecurionPay dashboard, go to our Knowledge Base step-by-step guide.

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Lucas Dominic

Lucas Dominic

Lucas is a CEO at SecurionPay. FinTech Innovator, Payment Expert, API Fan, Startup Enthusiast & World Traveler.
Lucas Dominic

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