Risk Scoring

What is Risk Scoring?

Risk scoring is a process used by fraud detection systems to assign a numerical value to a transaction based on the likelihood that it is fraudulent. The score is calculated by analyzing various data points, such as IP address, device type, and purchase history, against known fraud patterns.

Why It Matters

• It allows merchants to automate the decision-making process for thousands of transactions in real-time.

• High-risk transactions can be automatically blocked or sent for manual review, while low-risk orders proceed without friction.

• Businesses can adjust their risk thresholds to balance fraud prevention with the need to minimize false positives.