Using Decisions for Risk Mitigation

Owned by Miles Graves
Last updated: Apr 30, 2024
7 min read

Overview: This implementation resource outlines decision actions including Block Authorization, Hold for Manual Review, and Send Funds to Reserve.

What are Decisions?

Decisions are a configuration of rules allowing Facilitators or Referrers to set specific risk criteria, such as Card Verification Value (CVV) Result or Bank Account Authentication, to determine the automated action that should occur to a transaction or entity.

Automating manual risk decisions & actions, providing greater protection from risk liabilities, and ensuring your portfolio adheres to your preferred risk standards and guidelines make Decisions an invaluable tool.

The robust and multi-layered logic of Decisions provides granular configuration settings, allowing you to apply compliance standards with precision and ease.

Decision configurations are made up of Decision Rules, Decision Actions, and Conditional Rules.

  • Decision Rules - The entity or transaction behavior that must occur to trigger the Decision Action.

  • Decision Actions - The action that takes place after the Decision Rule has been triggered.

  • Conditional Rules - The additional custom criteria applied to the Decision Rule trigger.

Setting up Decision Rules & Actions

Navigate to the Decisions tab by following the steps below:

  • Step 1: Click on Groups in the Management category in the left-hand navigation panel.

  • Step 2: Click on a listed Group to navigate to the Group Profile.

  • Step 3: Click on the Decisions Tab, then click on the ADD DECISION button to access Automated Decisions.

  • Step 4: Select a category from the ‘Select a Rule Type’ dropdown and the desired Descion Rule from the ‘Select a Rule’ dropdown.

  • Step 5: Set the Decision Rule parameter, either a number, dollar amount, percentage, or valid value (where applicable), then select the desired Decision Action under the Take this ACTION dropdown.

  • Step 6: Set each Decision Rule assignment as desired for users, entities, transactions, dates, or transaction amounts.

  • Step 7: Click the SAVE button in the upper right-hand corner.

Setting up Conditional Rules

Once you’ve set up your core Decision Rule and Action, you can add additional parameters or criteria using Conditional Rules. Read more about Conditional Rules below.

Note: You cannot begin a conditional rule using the and logic. This is a known platform issue that is currently being addressed.

To add additional criteria to the Decision Rule you’re setting up or another existing Decision Rule, follow the steps below:

  • Step 1: Click on the CHAIN LINK icon at the bottom of the Decision Action parameters.

  • Step 2: Select a category from the ‘Select a Rule Type’ dropdown and the desired Descion Rule from the ‘Select a Rule’ dropdown.

  • Step 3: Set the Conditional Rule parameter, either a number, dollar amount, percentage, or valid value (where applicable).

  • Step 4: Set each Conditional Rule assignment as desired for users, entities, transactions, dates, or transaction amounts (where applicable).

  • Step 5: Click the SAVE button in the upper right-hand corner.

Decision Rules

Decision Rules refer to the specified risk criteria required to trigger a Decision Action.

Decision Rule Logic - if

Both Decision Rules and Conditional Rules utilize an if, then logic that determines when the Decision Action takes place.

5 Rule Types provide their own sets of specific Decision Rules:

  • Consumer Transaction Risk - Risk behaviors related to specific consumer transactions.

  • Merchant Transaction Risk - Risk behaviors related to an overall Merchant.

  • Boarding - Risk behaviors related to Merchant boarding.

  • Refunds - Risk behaviors related to Merchant refund issuance.

  • Watchlists - Risk behaviors related to OFAC watchlist and other custom watchlist configurations.

Example

  • Decision Rule: Merchant Transaction Risk > Inactive Merchant

“If an inactive Merchant attempts a transaction, [then] Block Authorization.”

See the content below for a complete list of all Decision Rules and their related Rule Types.

Rule Type

Rule

Description

Parameter Type

Rule Type

Rule

Description

Parameter Type

Consumer Transaction Risk

Failed Authorizations (Per IP)

IP Address fails authorization this number of times.

Number

 

Failed Authorization Ratio (Per IP)

IP Address has a failed authorization ratio higher than this percentage.

Percentage %

 

Transaction Fraud Score

Transaction Fraud Score is below this number.

Number

 

Card Verification Value (CVV) Result

Card Verification Value (CVV) result is:

Valid Values:

  • Unavailable

  • Mismatch

 

Address Verification Service (AVS) Result

Address Verification Service (AVS) result is:

Valid Values:

  • Unavailable

  • Mismatch

  • Partial Match

 

Advanced Address Verification Service (AAVS) Result

Advanced Address Verification Service (AAVS) result is:

Valid Values:

  • Unavailable

  • Mismatch

  • Partial Match

 

Duplicate Transactions

Merchant attempts a transaction with these identical values:

Valid Values:

  • Payment, Merchant, Type and Total

  • All above + Order ID and Terminal ID

  • All above + Customer ID

Merchant Transaction Risk

Failed Authorizations

Merchant exceeds this number of failed authorizations.

Number

 

Failed Authorization Ratio

Merchant has a failed authorization ratio higher than this percentage.

Percentage %

 

Max Sale Amount

Merchant attempts a sale over this amount.

Dollar Amount (Number)

 

Over Monthly Average Ticket Count

Merchant attempts a transaction this percentage over the Average Transaction.

Percentage %

 

Merchant/CC Combo

Merchant successfully charges the same card more than this number of times.

Number

 

Inactive Merchant

An inactive Merchant attempts a transaction.

N/A

 

Number of Times Merchant/CC Number(s) Fail

Merchant unsuccessfully charges the same card more than this number of times.

Number

 

Captures with no Authorizations

Merchant exceeds the number of captures allowed without an authorization.

Number

 

Capture above Authorization Amount

Capture exceeds auth by this percentage.

Percentage %

 

Card Matches Merchant or Member

MATCH score is below this number.

Number

 

Limit

The count of the fields over the selected time frame exceeds this number.

Note: If Transaction Amount is used, the decision will only trigger on a Transaction ABOVE the Transaction Amount.

Number

Boarding

Business Authentication

Business Authentication Score is Below this number.

Number

 

Advanced Business Authentication

Advanced Business Authentication Score is Below this number.

Number

 

Basic Owner Authentication

Owner Authentication Score is Below this number.

Number

 

Advanced Owner Authentication

Advanced Owner Authentication Score is Below this number.

Number

 

Ownership Authentication

Ownership Correlation Authentication score is below this number.

Number

 

Entity Fraud Score

Entity Fraud Score is below this number.

Number

 

Bank Account Authentication

Bank Account Authentication score is less than this number.

Number

 

Bank Account Verification

The bank account is not verified.

N/A

Refunds

Max Refund Amount

Merchant attempts a refund over this amount.

Number

 

Refunds to Sale Ratio

Merchant's refunds to sales ratio is more than this percentage of sales.

Percentage %

 

Inactive Merchant

An inactive Merchant attempts a transaction.

N/A

 

Max Refunds with no Associated Sales

If merchant exceeds this number of refunds with no associated transaction.

Number

 

Transaction Fraud Score

If Transaction Fraud Score is below this number.

Number

 

Duplicate Transactions

If merchant attempts a transaction with these identical values:

Valid Values:

  • Payment, Merchant, Type and Total

  • All above + Order ID and Terminal ID

  • All above + Customer ID

 

Balance Refund Limit

If a refund is processed causing the account balance to fall below this number.

Number

(Dollar Amount)

Watchlists

OFAC Watchlist

OFAC Watchlist hit score is less than this number.

Number

 

{Custom Watchlist Name}

{Custom Criteria}

N/A

Decision Actions

Decision Actions refer to the specific automated process that should take place when the specific criteria are met.

3 available Actions can take place when a Decision Rule is triggered:

  • Block Authorization - Changes a high-risk transaction’s status to Failed to mitigate transaction risk.

  • Send Funds to Reserve - Creates a Reserve on a specified amount of funds to allow transaction risk events and all other applicable rule types to be vetted before disbursing the funds.

  • Hold for Manual Review - Creates a Hold that either prevents a high-risk Merchant from boarding or a transaction from reaching a Captured or Settled status.

See the content below for information about Decision Actions.

Action

Description

Applicable Rule Types

Action

Description

Applicable Rule Types

Block Authorization

Indicates that the specific conditions have not been met and the transaction status will be Failed automatically blocking the transaction.

Block Authorization is specific to transaction processing.

  • Consumer Transaction Risk

  • Merchant Transaction Risk

Send Funds to Reserve

Indicates that a merchant has been flagged above a specific threshold or percentage and will automatically create a reserve.

  • Consumer Transaction Risk

  • Merchant Transaction Risk

  • Boarding

  • Refunds

  • Watchlists

Hold For Manual Review

Indicates unclear or insufficient data submitted from Merchants during boarding or flagged transactions processed or attempted by the Merchant.

  • Consumer Transaction Risk

  • Merchant Transaction Risk

  • Boarding

  • Refunds

  • Watchlists

Block Authorization

The platform validates the integrity of responses it receives from an issuer. If the response criteria don’t meet the platform-defined criteria, a Reverse Authorization will be issued to reject it from processing.

This event occurs within a second of the transaction approval and the original transaction will be marked as “Failed”. In this event, you will be able to see in the Transaction Stream that the transaction was reversed. 

Hold for Manual Review

This will prevent the merchant from boarding and send an alert to Platform Underwriting to review the merchant account. Upon review, additional documentation or clarification may be requested from the merchant to remove the hold for a transaction or boarding.

Transaction amounts that severely exceed the estimated average transaction amount listed by the merchant in their Signup Form, or suspicious activity; such as excessively large transaction volume not previously identified.

Our Risk team will review a transaction and may request supporting documentation or information to allow that transaction to settle. 

Send Funds to Reserve

Reserves can be leveraged in instances where suspected money laundering, fraudulent activity or prohibited business activities are occurring.

Reserved merchants indicate the merchant’s ability to transact, but not fund any of the transactions in their Available Balance.

This is typically applied when a merchant is flagged above a certain threshold, such as a TIN match without at least a 50% owner authentication match. Platform Underwriting may request additional information to qualify the merchant (depending on their internal verification).

Conditional Rules

Conditional Rules refer to the rule logic applied as extra criteria aside from the primary Decision Rule, to configure a more precise final Decision Rule logic.

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