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The Importance of a Fraud Detection API

Whether in the form of chargebacks, lost revenue or compliance fines, fraud is expensive for any business. That’s why companies need to have a robust fraud detection system in place, which detects suspicious payment patterns and large transactions and flags them for manual review.

To do this effectively, it’s important to have a real-time fraud detection API in place. This API will process incoming user data in real time and then trigger alerts when fraudulent behaviours are detected. It also needs to provide the tools necessary for fraud analysts to monitor and act on the results of the analysis, including an easy-to-use fraud detection dashboard.

An API is key because it enables developers to seamlessly connect the fraud transaction management software solution to existing apps or data suites. This reduces maintenance costs and allows for a faster fraud detection solution, with the ability to scale up or down depending on the business need.

The fraud detection API must be flexible enough to adapt to new attack methods. Fraudsters are constantly finding ways to break the rules, so it’s important for a fraud prevention API to be able to identify these changes. The best APIs will offer machine learning algorithms to spot new patterns, with the option for expert human intervention at any point in the fraud lifecycle. This will help to identify anomalies, as well as confirm that a behaviour is genuine or not, and then feed that into the machine learning algorithm to strengthen future decision-making.

Fraud prevention APIs will also typically include a number of pre-loaded risk rules, designed by experienced fraud experts to tackle common pain points for different verticals. They will also support black- and white-box machine learning to suggest additional rules, based on fraud insights gleaned from deep inside customer data. SEON, for example, offers pre-loaded and customizable risk rules for a range of industries and uses, as well as automated rule-building for any new scenarios not covered by these.

As well as ensuring that the fraud detection API is fast, it must be scalable to handle hundreds of thousands of simultaneous user logins, transactions or signups. For this reason, it is essential that the API solution works on a real-time basis and can return results in under a second. SEON’s API does this and is priced on a cost-per-usage basis, meaning businesses can scale up or down as needed. This flexibility is also key for reducing fraud costs and allowing the business to focus on growth.

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