Buy now, pay later (BNPL) fraud prevention | Kount

BNPL fraud prevention for BNPL providers, e-commerce businesses

BNPL providers can give merchants confidence in BNPL transactions with customizable solutions that mitigate fraud risks, save inventory, reduce chargebacks, and resolve friendly fraud disputes.

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BNPL Fraud Prevention

What is BNPL fraud prevention?

A buy now, pay later (BNPL) fraud prevention solution can reduce the fraud risks associated with BNPL transactions. BNPL transactions are prime targets for criminal and friendly fraud. Bad actors may use BNPL options to carry out card testing attacks.

Meanwhile, consumers may forget recurring payments or engage in more BNPL transactions than they can handle, increasing friendly fraud and accidental chargebacks. So as more merchants consider offering BNPL options, they’ll want to ensure they’re not taking on additional CNP payment risks.

Benefits of BNPL fraud prevention

Stop card testing attacks

Help your merchants identify good customers for BNPL and recurring payment options and prevent inventory loss of high-value items.

Adjust to high traffic

Reduce card testing and other fraud risks for new BNPL transactions and anytime customers change payment methods.

Protect customer rewards

Relay compelling evidence with dispute management tools that resolve friendly fraud disputes that lead to chargebacks.

Stop new account fraud

Expand revenue opportunities using billions of additional data points to help merchants extend BNPL options to more customers.

Reduce chargebacks

Customize fraud policies to automate approve and decline decisions to virtually eliminate manual reviews.

How BNPL fraud prevention works

BNPL fraud prevention uses advanced AI, machine learning, and a global data network to establish the level of risk or trust behind new BNPL transactions. For example, Kount’s Identify fraud solutions combine digital and physical identity elements (like payment methods and credit histories) to create comprehensive customer personas.

With a complete persona, merchants offering BNPL can use Kount’s Assess solutions to analyze risk factors for each new transaction or change in payment method. In addition, BNPL fraud prevention evaluates risk factors like fraudulent payments and associated chargebacks. The combination of BNPL fraud tools helped one provider reduce chargebacks by 88% within months.

Identify fraud solutions

New requirements change friendly fraud dispute resolution

BNPL exposes merchants to friendly fraud risks if customers don’t understand billing descriptors or forget about recurring payments. To help merchants resolve these disputes, Visa announced changes to its compelling evidence requirements. Explore our guide to catch up on the evolution of compelling evidence, Visa’s latest changes, and how you can use digital fraud and dispute management tools to meet CE3.0 requirements and prevent chargebacks.

>> CE3.0: What new Visa requirements mean for merchants

Assess fraud solutions

3 fraud prevention tips for subscription business models

The subscription business model is an excellent way for e-commerce merchants to create unique shopping experiences, build brand loyalty, strengthen customer relationships, and gain a steady revenue stream. But it’s not without its challenges. Explore our latest blog for the top four ways to avoid subscription fraud risks and the customer disputes that come with them.

>> Minimize fraud from subscription business models

Help customers get the goods and services they need and avoid BNPL fraud risks


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