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Can IP Geolocation Contribute to Detecting Online Credit Card Fraud?

The problem of credit card fraud is not set to be resolved anytime soon. On the one hand, detecting and preventing the artifice is one of the most challenging aspects of e-commerce. That’s primarily since businesses aim to create a smooth customer experience and maximize profits—the two main incentives for accepting payments quickly but may sometimes backfire.

Additionally, a 2019 statistics report shows that credit card fraud is the leading cause of identity theft. This same study mentioned that around 167,000 users’ identities were spoofed to obtain credit cards for someone else’s use.

To help establish a healthy and fraud-free online business environment, IP geolocation data may prove useful to spot and act on anomalous transactions. Let’s talk about how it works and can benefit e-commerce websites in this post.

Using IP Geolocation against Credit Card Fraud

Many e-commerce businesses cater to an international customer base. While that’s a good thing for generating revenue, this fact is countered by another: Scammers can target almost any company from anywhere in the world while keeping their anonymity.

In many cases, merchants fail to identify the actual location of a threat actor because they only rely on the information, which may be fake, provided on credit card records. As a result, merchants discover a crime only after it has been committed. In most cases, they only get wind of incidents due to client complaints—getting billed for purchases they never made. Should transactions prove fraudulent, merchants have no choice but to refund the card user, thus incurring a loss.

Fortunately, fraud monitoring techniques such as IP geolocation can help detect unlawful transactions as they happen. For example, geodata can be used to confirm if the details of a purchase made from a certain country correspond to other known banking and invoicing records. In turn, suspicious variations can be flagged and investigated—at least for just enough time to verify the good faith of the person executing a transaction.

What Can IP Geolocation API Do?

IP Geolocation API allows fraud investigators and analysts to identify users’ geographical locations anywhere in the world. The information it provides include latitude and longitude, time zone, region, city, country, postal code, Internet service provider (ISP), and more. These details then offer more insights to help assess if incoming transactions are fraudulent or legitimate.

All the API requires is an IP address, a domain, or an email address—one of the three possible search terms, to look up a user’s location. Apart from accurate geographic location, it also delivers data for a given IP that can evidence potentially malicious transactions.

For instance, the API display autonomous system numbers (ASN) that reveal the type of network a particular IP address belongs to. Examples of ASN include digital subscriber line (DSL), Content, Educational, Enterprise, and more. Now say a credit card owner is using a noncorporate network, it wouldn’t make sense for him to buy an enterprise-grade server, right?

Lastly, the API associates a specific domain with others through IP addresses, regardless of whether it’s IPV4 or IPV6, as reference points for finding connections between users. This is relevant as studying related entities can assist in identifying other potentially malicious domains to avoid threats related to the same perpetrator.

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Online credit card fraud will continue to exist so long as people buy and sell goods over the Web. It will remain, after all, more convenient than physically going to a store.

The good news is that cybersecurity and fraud investigation teams can use IP geolocation data to pinpoint fraudsters and stop ongoing deceitful attempts—before these can rip off customers and e-commerce sites alike.

By WhoisXML API, A Domain Research, Whois, DNS, and Threat Intelligence API and Data Provider

Whois API, Inc. (WhoisXML API) is a big data and API company that provides domain research & monitoring, Whois, DNS, IP, and threat intelligence API, data and tools to a variety of industries.

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