Businesses Move Fraud Checks Ahead of Payments

Fraud prevention is shifting from a reactive task to a proactive gatekeeper role. For retailers and service providers, this means verifying customer identity and account validity before a transaction even begins. New data shows that leading businesses are moving fraud checks to the very beginning of the customer journey. This change aims to stop 'account takeover' and 'synthetic identity' fraud before a financing application is submitted. Waiting until the payment or funding stage to run checks is becoming a costly mistake. For operators, this shift means integrating better verification tools into your point-of-sale or online checkout flow. By identifying high-risk users early, you save your staff time and protect your business from chargebacks. The report highlights that automation is key. Manual checks are too slow for modern consumer financing expectations. If you offer BNPL or long-term financing, your systems should confirm the user is who they say they are before they ever see a 'Submit' button. This protects your lender relationships and keeps your merchant accounts in good standing. Implementing these 'pre-payment' checks reduces friction for legitimate customers while creating a wall for bad actors.

Source: PYMNTS

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