E-commerce Fraud and Merchant Network

E-commerce Fraud and Merchant Network

The pandemic has encouraged more people to transition from shopping at physical stores to purchasing things on e-commerce websites. With such a huge explosion of buyers at online stores, payment frauds have also increased dramatically. Merchants earn more but are exposed to a higher risk of e-commerce fraud.

Online merchants need a robust fraud prevention solution to keep fraudulent purchases to a manageable number. That’s where FraudLabs Pro comes in. FraudLabs Pro protects users from e-commerce fraud by the advanced detection of fraud patterns. One of the more important parts of the FraudLabs Pro fraud prevention service is the Merchant Network.

What are e-commerce frauds and the Merchant Network?

The e-commerce fraud

There are 2 main types of E-commerce frauds:

  1. Credit/debit card fraud (card-not-present fraud)
    – a scam where the fraudster attempts to make a transaction while not possessing the physical card or using a stolen card
  2. Chargeback fraud, (friendly fraud)
    – occurs when a buyer purchased with their own credit card, and then requests a chargeback after receiving the purchased goods or services.

The FraudLabs Pro Merchant Network

The FraudLabs Pro Merchant Network consists of blacklists that contain fraud data contributed by merchants that are currently using the FraudLabs Pro fraud screening service. At present, there are blacklists data for fraudsters’ IP address, their email, their computer or mobile device fingerprint, phone number and the shipping address used. The order screening process will use these data to weed out potential fraudulent order.

How to join the Merchant Network?

To gain access to the protection of the Merchant Network, merchants can just sign up for any FraudLabs Pro plans, even the free Micro plan. Then, they have to integrate FraudLabs Pro into their online shopping carts, either via ready-made plugins for their webstore platform or by using the REST API directly. That’s basically it. The FraudLabs Pro fraud prevention service is now screening all orders made on the website.

See the FraudLabs Pro plans.

What makes the Merchant Network so effective in fraud prevention?

As mentioned above, the Merchant Network plays an important role within the FraudLabs Pro fraud prevention service. Blacklists data are being contributed round the clock by merchants around the world, therefore every merchant on the network is always being protected with the very latest fraud data.

The use of multiple blacklists translates into protection from multiple angles, thus making it very hard for a fraudster to make a fraudulent order or hide their tracks. Global collaborative efforts ensure that fraud patterns are uncovered faster as data added to the blacklists are immediately used in fraud screenings.

Privacy is not an issue

Merchants do not have to worry about privacy issues when it comes to sharing blacklist data. First of all, the process of sharing their contribution is an opt-in process. Besides that, the shared data is used purely for fraud screening purposes and is not visible to other merchants.

How do the blacklists prevent fraudulent transactions?

The IP address and email blacklists enable FraudLabs Pro to track a fraudster across multiple merchant websites. As a result, it is much harder for them to avoid detection.

However, some savvy fraudsters may know to change their IP address and email address when making a purchase online. Hence, using the shipping address blacklist prevents habitual offenders from making purchases because the delivery address is not that easy to change.

Similarly, the device blacklist uses a digital fingerprint of a computer or a mobile device to identify repeat fraudsters by their machines.

All in all, combining the above blacklists has made life very difficult for malicious actors trying to make fraudulent purchases.


E-commerce fraud is sophisticated and ever-evolving. The Merchant Network works in conjunction with other features such as velocity checks, customizable fraud rules, etc. As a result, this has made FraudLabs Pro highly effective in combating e-commerce fraud.

Small businesses can definitely benefit from using the free Micro plan to screen up to 500 orders for fraud. When they’ve grown beyond the free tier, then they can easily upgrade their FraudLabs Pro plan to match.

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