Fraud Protection Services: FAQs



Why should I use Fraud Protection Services?

About Fraud Protection Services

Buyer Authentication

Setup & Maintenance

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Why should I use Fraud Protection Services?

Am I really at risk?
If you are using PayPal Website Payments Standard or Email Payments, your risk of fraud is low. We have one of the lowest fraud loss rates in the online retail industry. However, selling online with an internet merchant account and no fraud protection system is a risky proposition.

All online merchants are at risk for online fraud. Statistics show: one in six online consumers has been the victim of credit card fraud. Online stores experience fraud 17 times more often than offline stores. An estimated $1.8 billion USD was lost to credit card fraud in 2003. Criminals constantly troll the internet to target vulnerabilities at the network, transaction, or account levels. Fraud Protection Services helps you control that risk.

Does PayPal guarantee that no fraud will take place on my site if I am using Fraud Protection Services?
Like home security or alarm systems, we cannot guarantee criminals will not target your business. But Fraud Protection Services can significantly reduce the odds that criminals will succeed in committing online theft on your site. Implementing industry standard security practices is the best route to protecting your business.

How will Fraud Protection Services help me run my business more efficiently?
Every merchant knows that good security is a necessary cost of doing business. Controlling those costs is essential to the efficiency and profitability of your business. Fraud Protection Services provides a systematic and proactive method for maintaining strong security. You'll also have the proper security and controls in place to give you confidence to scale your business and perform more transactions with legitimate customers that you may have turned away in the past as suspicious.

When am I liable for a transaction?
As an online merchant, you are liable for every payment you receive. In the brick-and-mortar world, merchants are not liable for credit card fraud when the card issuer authorizes the transaction and the store owner gets a valid signature. In the online world, merchants are responsible for all chargebacks and fraudulent transactions. That means proper security is your responsibility, not the bank's.

What is a chargeback?
A chargeback occurs when buyers ask their credit card company to remove a charge from their credit card statement. The credit card company will ask the buyers to provide an explanation about why they are disputing the charge.

Two common reasons for reversals or chargebacks are:
  • A buyer's credit card number is stolen and used fraudulently.
  • A buyer makes a purchase, but believes that the seller failed to fulfill the agreement (for example, did not ship the item, shipped an item that was very different from the seller's description, or the item was damaged when the buyer received it).

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About Fraud Protection Services

How does this product work?
Fraud Protection Services use fraud filters, password management, lists of allowed IPs, security audits, and advanced features like Account Monitoring and Buyer Authentication to proactively combat online theft at key points of entry. The packages offer a suite of technologies from authentication to rules engines to provide comprehensive and layered security. PayPal bases these security features on the most current and rigorous research and analysis.

Is Fraud Protection Services available for PayPal’s other products, such as Website Payments Standard or Email Payments, or if I sell on eBay?

Fraud Protection Services is available only with Payflow Link and Payflow Pro. All other PayPal products, including eBay transactions, Website Payments Pro, Website Payments Standard, and Email Payments, rely on PayPal’s built-in fraud protection systems. Our sellers experience some of the lowest fraud rates in the online retail industry.

As one of the most powerful risk management systems in the world, our proprietary risk models help detect and predict fraudulent transactions – before they affect your business. We also use industry-recognized address verification and card security code checks to thwart identity theft. PayPal's industry-leading loss rate is less than 0.5%. There is always some risk when selling online, but PayPal works tirelessly to help keep your business safe.

Are PayPal’s built-in fraud protection systems available with Payflow Link or Payflow Pro?
No. Payflow Link and Payflow Pro are designed to work only with the Basic and Advanced Fraud Protection Services available with those products.

Which system provides better protection for my business, PayPal’s built-in systems or the Fraud Protection Services add-ons?

Both systems are very good; they just work differently. It really comes down to which system is right for you and your business:

Payflow Link and Payflow Pro are designed for merchants who wish to manage their own fraud risk – to make their own decisions about which orders to accept or decline.

PayPal’s built-in fraud protection systems work in the background, invisible to the merchant, and make all of the decisions. These systems are very good at what they do, and they save you the hassle of manually reviewing orders.

Do PayPal’s built-in systems and the Fraud Protection Services add-ons include the same filters, lists, and other security technology?
We do not share specific information about how our risk management system works. However, it is one of the most powerful systems of its kind, and our industry-leading loss rate is less than 0.5%. Our proprietary risk models are constantly working to help detect and predict fraudulent transactions – before they affect your business. We use industry-recognized address verification and card security code checks to thwart identity theft.

What's the difference between Basic and Advanced Fraud Protection Services?

Basic Fraud Protection Service is a starter security package designed for merchants with low transaction volumes or less sophisticated risk management needs.

Advanced Fraud Protection Service includes additional fraud filters that meet the higher security needs of merchants with mid- to high-level transaction volumes or merchants selling products in a high-risk category (such as consumer electronics, prepaid calling cards).

Can I purchase Fraud Protection Services as a stand-alone product?

No. Fraud Protection Services is available only as an add-on service to Payflow Pro or Payflow Link.

To speak to a sales representative about Fraud Protection Services, call us at 1-888-847-2747, or submit your inquiry online and we will get back to you shortly.

Can I buy Account Monitoring or Buyer Authentication as a stand-alone product?
No. Both Account Monitoring and Buyer Authentication are premium add-on services. To take advantage of these advanced security features, you must have Basic or Advanced Fraud Protection Service.

How often is the product updated?
The risk lists and intelligence behind the fraud filters is continuously updated. A team of trained PayPal security professionals is constantly reviewing fraud transactions and research with an eye toward updating product features.

How much does Fraud Protection Services cost?
Go to our pricing page to see the costs for Fraud Protection Services.

If you have any questions about pricing, a PayPal sales representative can explain costs for each fraud protection service. Please call us at 1-888-847-2747 to speak with an online payment specialist, or submit your inquiry online and we will get back to you shortly.

Will these packages offer me enough protection?
Managing your business' risk in a cost-effective manner is an important and continuing process. Fraud Protection Services has been designed to allow you to efficiently scale your security as your business needs it.

Basic Fraud Protection Service provides comprehensive protection for merchants with lower security requirements, for example low transaction volumes and low risk product categories. The Advanced Fraud Protection Service meets the higher security needs of merchants with mid- to high-level transaction volumes selling high risk products.

If, however, you feel your business needs additional security, around-the-clock Account Monitoring and Buyer Authentication programs provide additional protection. For help deciding which services will meet your needs best, call us at 1-888-847-2747 to speak with an online payment specialist. Or submit your inquiry online and we will get back to you shortly.

Does Fraud Protection Services incorporate SSL?
Fraud Protection Services has the same security standards as the Payflow Gateway processing service. Transactions are encrypted using SSL.

Do I get liability protection with every transaction?
No. While PayPal Fraud Protection Services significantly reduces your chances of experiencing online fraud, PayPal does not directly provide liability protection.

Are there any eligibility requirements for Fraud Protection Services?
Fraud Protection Services has a few eligibility requirements:
  • Merchants must process payments with the Payflow Pro or Payflow Link service.
  • Merchants must use a non-host-based U.S. payments processor (for example, Nashville, Vital, Paymentech, Nova, NDCE, Amex or South).

To use Buyer Authentication, Visa and MasterCard must certify a merchant's acquirer and processor and provide the Verified by Visa and MasterCard SecureCode services. PayPal can help you get your acquirer and processor certified.

Buyer Authentication

How does PayPal offer a single point of integration for Buyer Authentication services?
Verified by Visa and MasterCard SecureCode are separate authentication protocols with distinct technology requirements. PayPal establishes and maintains the technology and hardware required by each protocol. Payflow Pro customers using our Buyer Authentication product make a single API call to the PayPal server, which then interacts with the appropriate buyer authentication service. For Payflow Link customers, both services are pre-integrated, so the merchant simply needs to request to turn on these services.

To use Buyer Authentication, Visa and MasterCard must certify a merchant's acquirer and processor and provide the Verified by Visa and MasterCard SecureCode services. PayPal can help you get your acquirer and processor certified.

How do Verified by Visa and MasterCard SecureCode protect me?
When an online merchant integrates Verified by Visa or MasterCard SecureCode Buyer Authentication programs into their payment process, cardholders are required to confirm their identities by entering a password. The card issuer then validates that password to ensure that the legitimate cardholder is requesting the purchase. If the cardholder is authenticated, Visa and MasterCard give the merchant liability protection on that transaction..

Setup & Maintenance

How do I set up and configure Fraud Protection Services to work with my online business?
Fraud Protection Services is designed to be easy to set up and configure. Both Basic and Advanced Fraud Protection Services use PayPal Manager and detailed help to guide you through the set-up process.

What staff or resources will I need to manage my Fraud Protection Services?
PayPal's Fraud Protection Services are designed so you can use your current staff and resources more efficiently. Online wizards and educational links ensure that no prior risk training or experience is necessary to use the service.

The number of people required to manage the service depends on your transaction volume. Ideally one person, or a limited number of people, should be responsible for setting up the fraud filters and reviewing transactions that have been flagged. This specialization will enable your business to operate more effectively and efficiently.

Don't see your question here?

Call the sales department at 1-888-847-2747