Fraud at Pre-Auth Unlocks Payment Optimization

Authentication Model

Routing Decision

Decline

Approve

High Risk

Pre-Auth

Fraud Decision

Card Vaulting

• No 3DS
• Token
• Decision
• Card Network Decision
• Processor Decision

Merchant

• Enhanced Authorization

• Major Card Network

• Processor A

• Network Token

• Frictionless 3DS

• Debit

• Processor B

• Card Number

• Frictionless or Challenge 3DS

• Domestic Network

• Processor C

Pre-authorization helps merchants drive more approvals and reduce fraud before a transaction even reaches the bank. Pre-auth merchants:

• Send clean, context rich traffic to issuing banks
• Lower processing costs
• Eliminate card testing
• Leverage 3DS authentication to approve more transactions

*Pre-Auth becomes even more critical as VAMP introduces fees for merchants exceeding card testing and fraud dispute thresholds

Architecting a High-Impact Payments Strategy

• Customer

• Merchant

• Acquiring Bank

• Card Network

• Issuing Bank

Payments Optimization Engine

The critical points where approvals and conversion can be directly influenced. Instead, shifting fraud decisions to pre-authorization, merchants can influence key conversion levers like card vaulting, issuer strategy, 3DS, and routing, to drive increased conversions and reduce costs.