How to block Prepaid Card in FraudLabs Pro

How to block prepaid card in FraudLabs Pro

A prepaid card, also known as a prepaid payment card, is a financial tool that allows cardholders to load a specific amount of money onto the card before using it for purchases or transactions. The card operates similarly to a debit or credit card, enabling users to spend up to the available balance on the card.

Prepaid card fraud has become a concerning trend in recent years. As the popularity of prepaid cards has grown, so has the incidence of fraudulent activities associated with them. Fraudsters often exploit the anonymity offered by prepaid cards to carry out their illegal activities, such as money laundering or identity theft. The lack of direct linkage to a bank account makes it more challenging for authorities to trace and recover funds in case of fraudulent transactions.

Hence, when considering prepaid cards from a merchant’s perspective, it is crucial to be aware of the potential risks associated with them, especially the anonymity. This anonymity can pose challenges for merchants in verifying the legitimacy of the cardholder. Furthermore, prepaid cards are susceptible to fraudulent activities like chargebacks or unauthorized transactions, primarily because the funds are not directly linked to a bank account. Therefore, merchants need to stay vigilant and proactive in detecting and preventing prepaid card fraud. Implementing robust fraud detection systems, conducting thorough identity verification checks, and monitoring suspicious transactions can help minimize the risks.

How to detect a Prepaid Card in FraudLabs Pro?

A prepaid card can be identified by using the 6 or 8-digit card BIN/IIN number. This BIN/IIN number contains important information about the card, including the issuing bank, issuing country, card type, and card subtype. The card type indicates whether it is a credit or debit card, while the subtype provides more detailed information about whether it is a prepaid card, gift card, corporate card, and so on. You can visit the Credit Card BIN Lookup online tool to learn more.

To create a rule for detecting or blocking prepaid cards in FraudLabs Pro, it is important to ensure that the BIN information is available. You can accomplish this by visiting the transaction details page and locating the BIN information. It should be noted that not all e-commerce platforms provide the card BIN information, so availability may vary.

To check if the card BIN number is presented for prepaid card verification.

If the BIN information is presented on the transaction details page above, you can proceed to create a rule to check for prepaid cards on the Rules page. To find the validation rule, search for the name “prepaid”. You should see a validation rule named “Credit Card Equal to Prepaid Card”. Based on your requirements, you can decide the next course of action, such as to put the transaction into review or to reject it immediately.

FraudLabs Pro validation rule to reject a prepaid card

Should I block the Prepaid Card from the checkout?

Although it is generally advised to refrain from accepting prepaid cards due to their anonymous nature, it is important for merchants to find a middle ground. For example, for recurring buyers, you can lift the restriction on prepaid card usage. Instead of immediately rejecting a transaction, you could consider performing additional authentication, such as a phone call or SMS verification, to confirm their true identity. They should consider accepting prepaid cards as a legitimate form of payment while also implementing robust security measures. By doing so, merchants can safeguard their businesses and customers against the potential risks associated with prepaid card fraud. It is crucial for merchants to strike a balance between convenience and security, ensuring that their payment policies align with the best interests of their business and customers.

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