Fraud Detection System
Understanding Notch Pay’s fraud detection system and how to ensure your transactions comply with our security standards
Fraud Detection System
Notch Pay has implemented a sophisticated fraud detection system to protect the integrity of the payment ecosystem in Africa. This system is active in both sandbox and production environments and plays a crucial role in preventing fraudulent activities.
Our Security Approach
At Notch Pay, security is not an additional feature but a fundamental element of our platform. Our rigorous approach includes:
- Real-time Monitoring: All transactions are monitored in real-time to detect suspicious behaviors
- Machine Learning Algorithms: Our system continuously learns and adapts to new fraud methods
- Manual Verifications: Suspicious transactions may trigger manual reviews by our security team
- Regulatory Compliance: We adhere to all relevant financial regulations in the countries where we operate
- Regular Security Audits: Our systems undergo regular security assessments
How Our Fraud Detection System Works
Our fraud detection system monitors multiple aspects of transactions and user behaviors:
1. Transaction Monitoring
We analyze various transaction patterns and behaviors, including:
- Transaction Frequency: Unusually high number of transactions in a short period
- Transaction Amounts: Patterns of identical amounts or unusual amount sequences
- Recipient Concentration: Multiple transactions to the same recipient
- Geographic Patterns: Unusual patterns of transactions across different regions
- Time Patterns: Transactions occurring at unusual times or in unusual sequences
- Device and IP Information: Multiple accounts using the same devices or IPs
2. Behavior Analysis
Our system also examines user behaviors to detect anomalies:
- Usage Patterns: Sudden changes in usage habits
- Access Attempts: Multiple failed access or payment attempts
- Account Modifications: Frequent or suspicious changes to account information
- Cross-border Activities: Unusual transactions between different countries
3. Identity Verification
For high-risk transactions or merchant accounts, we may implement additional verification measures:
- KYC (Know Your Customer) Verification: Verification of user identity
- Business Verification: Validation of business information for merchant accounts
- Two-factor Authentication: Additional protection for sensitive actions
Risk Levels and Actions
Our system assigns risk levels to transactions and accounts, which can trigger different actions:
| Risk Level | Potential Actions |
|---|---|
| Low | Transaction processed normally with ongoing monitoring |
| Medium | Additional checks, possibility of requesting more information |
| High | Transaction put on hold for review, possibility of rejection |
| Critical | Transaction rejected, account potentially suspended for investigation |
Common Alerts and How to Avoid Them
Recipient Concentration
Alert: Multiple transactions to the same Mobile Money phone number.
How to avoid it:
- Distribute transactions among different recipients
- If your business model requires repeated transactions to the same recipients, contact our support team to document your use case
- Implement reasonable limits on the number of transactions to the same recipient in a given period
Identical Transactions
Alert: Multiple transactions with exactly the same amounts in a short time frame.
How to avoid it:
- Vary transaction amounts when possible
- Space out similar transactions
- Provide detailed descriptions to justify similar transactions
Unusual Activity
Alert: Sudden change in transaction habits.
How to avoid it:
- Gradually increase transaction volume
- Inform Notch Pay in advance if you anticipate a significant increase in activity
- Maintain consistency in your transaction habits
Incomplete Information
Alert: Transactions with incomplete or suspicious customer information.
How to avoid it:
- Collect and transmit complete and accurate customer information
- Validate phone numbers and emails before submitting them
- Use clear and specific transaction descriptions
Differences Between Sandbox and Production
Our fraud detection system is active in both environments, but with some important differences:
Sandbox Environment
- Less strict parameters to facilitate testing
- Educational alerts to help developers understand risky behaviors
- No real consequences for flagged transactions
Production Environment
- Strict parameters compliant with financial industry standards
- Real-time monitoring with possibility of manual intervention
- Real consequences for suspicious transactions, including rejection or account suspension
Best Practices for Developers
To ensure your integrations comply with our security standards:
- Test Rigorously: Use the sandbox environment to test all scenarios, including edge cases
- Distribute Transactions: Avoid concentrating all transactions on a single phone number
- Validate Inputs: Check and validate all user inputs before submitting them
- Implement Authentication: Ensure your users are properly authenticated
- Monitor Activities: Set up your own monitoring to detect suspicious behaviors
- Document Special Cases: If your business model requires unusual transaction patterns, document them with our team
- Respect Limits: Adhere to recommended transaction limits
- Update Regularly: Keep your integration up to date with our latest security recommendations
What to Do When a Transaction is Blocked
If a transaction is blocked by our fraud detection system:
- Check the Details: Ensure all transaction information is correct
- Consult the Logs: Check your application logs for any errors
- Contact Support: If you believe it’s a false positive, contact our support team with the transaction ID
- Provide Additional Information: Be prepared to provide additional information to verify the legitimacy of the transaction
- Adjust Your Integration: Modify your integration if necessary to avoid similar issues in the future
Commitment to Continuous Improvement
Our fraud detection system is constantly evolving to address new threats. We are committed to:
- Continuously improving our detection algorithms
- Reducing false positives while maintaining robust security
- Providing clear feedback when transactions are blocked
- Working with developers to optimize their integrations
Additional Resources
Important Note: Security is a shared responsibility. As a developer integrating Notch Pay, you play a crucial role in maintaining the integrity and security of the payment ecosystem. Always follow best practices and remain vigilant against suspicious activities.