High-risk payment facilitators (HRPFs) operate in a volatile arena, where the allure of serving underserved merchants intersects with the constant threat of fraud and chargebacks. Navigating this landscape successfully requires a multi-layered defence, with 3D Secure, transaction monitoring, and Identity Verification (IDV) forming a synergistic shield against financial threats.

The labyrinth of fraud

HRPFs cater to industries like online gambling, adult entertainment, and travel, which are inherently susceptible to various fraud types. Juniper Research (2022) predicts global card-not-present (CNP) transaction fraud to reach $58.6 billion by 2027, highlighting the vulnerability of HRPFs in this space. Common foes include the following:

  • Friendly Fraud: Customers dispute legitimate charges due to remorse or abuse (Mercator Advisory Group, 2023).
  • Identity Theft: Stolen card details are used for unauthorised purchases (Visa, 2023).
  • Transaction Laundering: Criminals exploit HRPFs to disguise illegal transactions (Europol, 2023).

Chargebacks: a costly sting

Chargebacks, where banks reverse payments due to disputes, pose a significant threat. A single instance can incur hefty fees, damage reputation, and even lead to termination by acquiring banks (Worldpay, 2023). In a fragile economy with rising inflation and potential recession, the pressure on HRPFs intensifies, as consumers may be more prone to friendly fraud, and margins become tighter.

The triple protection shield

Fortunately, HRPFs are not defenceless. By actively deploying 3DS, transaction monitoring, and IDV solutions, they can significantly mitigate risk and navigate the current climate with greater confidence.

3DS: the authentication bastion

3D Secure (3DS) acts as the first line of defence, verifying cardholder identity during online transactions. 3DS2 utilises robust methods like biometrics and risk-based assessments, making it harder for fraudsters to bypass security measures (Mastercard, 2023). Studies show that 3DS can significantly reduce chargeback rates, saving HRPFs valuable resources (VISA, 2023). Additionally, 3DS helps HRPFs comply with regulations like Strong Customer Authentication (SCA) in Europe, ensuring market access and smoother operations (European Banking Authority, 2023).

Transaction monitoring: vigilance across the ecosystem

Transaction monitoring goes beyond individual transactions, analysing patterns and activities across the entire merchant portfolio. This allows for the identification of suspicious behaviour, potentially linked to money laundering or organised fraud rings. Advanced solutions utilise machine learning and anomaly detection to identify deviations from regular patterns, enabling proactive intervention before significant damage occurs.

IDV: unmasking the true identity

Identity Verification (IDV) delves deeper, assessing the legitimacy of customers and merchants associated with transactions. This involves verifying identity documents, checking against watchlists, and assessing risk indicators. By ensuring the identities of both sides of the transaction are legitimate, IDV helps prevent fraudulent account creation and unauthorised activity.

Synergy for maximum protection

These solutions offer individual value, but their true power lies in their synergy. 3DS acts as the initial gatekeeper, while transaction monitoring and IDV provide continuous vigilance and deeper insights. The combined intelligence gathered can inform 3DS decisions, leading to more accurate risk assessments and frictionless experiences for legitimate customers.


Operating in a high-risk environment does not mean succumbing to fraud and chargebacks. By strategically deploying 3DS, transaction monitoring, and IDV solutions, HRPFs can build a robust defence system, protecting themselves, their merchants, and the integrity of the financial system. In today’s challenging landscape, this multi-layered approach is no longer an option, but a necessity for survival and success.