The gaming community is one of the toughest ones to serve and satisfy. This community demands almost real-time transaction approvals to ensure their gaming sessions are not halted, especially online games. In order to do so, these transactions are passed through a rushed process of verifications and this is where the fraud usually happens.
Fighting fraud becomes extremely tough when the transactions are being approved in real time because the customers, who are online gamers in this case, require immediate returns for what they are paying for. But thankfully fighting this fraud and protecting your online gaming merchant account is not impossible.
Before I tell how to fight fraud in the Online Gaming industry, let me answer the biggest question that you are probably asking yourself right now.
Can’t we just stop the real-time transactions & take the time to verify every time?
I get where the question is coming from. I also ask myself this question as I don’t belong to the online gaming community. If I’m not wrong, you are most certainly not a gamer either. Otherwise, you won’t be asking this question as most gamers would know why these transactions are in real time.
To explain in simpler terms, let’s say you are in the line to enter Disney Land. But at the last moment when you are second in line, your tickets are blown away by the wind. Now, you have the money to pay for the tickets at the gate and your family is desperate to enter. But what if the gatekeeper takes the ticket money and tells you that they have a long process to get you the tickets? Meanwhile, your kids are getting frustrated and the closing time of Disney Land is near. How frustrated will you feel as a parent?
Well, multiply it with 10.
Yes, 10 times more frustration.
When a gamer is on the edge of a breakthrough in the game’s storyline or playing online with their friends, the aggression and frustration for the wait is immense. They cannot wait minutes, hours or days to get life recharge, shards, gems, crystals, or whatever the game main currency is. They need to get back into the action as soon as possible. This is why the transaction in the online gaming industry is almost instantaneous.
Why Online Gaming merchant accounts are so vulnerable to the bad guys?
This is another question that comes up when you talk about the fraud and their impacts on online gaming merchant accounts. How are these accounts so vulnerable to the hackers and fraud –
Well, the problem is more with the gamers than the merchant account holder. As most of the gamers are young in age, they are usually less careful about their credentials and sometimes predicting them gets very easy for the bad guys. We call it social engineering. In social engineering, the hackers usually guess the credentials from the information of the cardholder available online.
Besides, these transactions are very small in comparison to other industry transactions. This way, the monitoring of these amounts becomes really hard. To be honest, banks and other financial institutions pay less attention to these small amount transactions compared to other retail transactions.
Now, let’s get into what you are here for.
Tips on fighting fraud to protect your online gaming merchant account
Tip no 1: Collaborative solutions to prevent fraud
There are a number of ways of how a company can prevent fraud and attract more users on the platform. One of the most efficient ways is to use collaborative solutions. These collaborative solutions incorporate transactions and all the data of the players or the users of that platform. Later on, this will help with the protection against fraud.
With this holistic approach and data, it will be much easier to identify fraudsters and recognize their pattern. Implementation of this type of approach helps in noticing the patterns of changes in buying and playing behaviors. Then flagging those IDs and credit cards becomes easy for identifying potential frauds.
Tip no 2: Track the IP addresses and its changing patterns
Gamers have an inherent tendency to play their games on their personal computer. This is because they are more used to their own personal setup. Some gamers are comfortable with one keyboard and controller setup and some with another setup. Some gamers like their RGB keyboard, some just prefer their simpler one. Some might want a 21 inch screen in his room to play Fortnite and some might be happy with their 14 inch laptop screen. I have even seen gamers who won’t even bother to play with their friends in his friend’s setup because his friend’s setup is not like the one he has in his home. This is how obsessed gamers are.
So, when you see a gamer or the user of your platform is logging in from another IP address, you can flag the IP or keep the transaction on hold to ensure everything is authentic in the purchase.
Check the ID credentials, check the credit card details and other remote data from the user. After that, you can pass the transaction and process the purchase.
Tip no 3: Incorporate fraud filters, PCI-compliant payment gateway, etc.
There are a good number of tools that help with fraud prevention. PCI-compliant payment gateway, fraud filter, etc. are some of the most useful ones.
Incorporating these tools will allow identifying the patterns, spot potential frauds, flag the IP addresses among many other useful things.
There are other tools that could help you with the fraud identification offered by various data protection or cybersecurity companies. All you need is to Google for them – there’s a lot of them.
Tip no 4: Use 2 step authentication for your users
This is something that does not depend on the merchants to handle. This is something that merchants can ask their users to do.
2 step verification means after you use your username and password to enter, you’ll be asked to verify your identity with another medium. This medium can be anything from a text message to pattern drawing. But the most popular form of 2 step verification is cell phone text or call and emails. Having the verification code right on their phone via a text message or an audio call is the most convenient way to utilize 2 step verification. The second most popular form is getting the codes sent in your email inbox.
Now, this verification can be done in several ways. First of all, the verification can be initiated every time the user is logged into the platform. Or, the 2 step verification can be initiated for each device. In this case, when the user ticks on “trust this device” or “never ask for a verification code on this device”, you no longer need to ask for a verification code from the second time onwards. So, when the user tries to log in from another device or when the fraudsters try to login with the user’s credentials, he won’t be able to enter because he doesn’t have the verification code.
However, if you think asking for 2 step verification on the login page every time is too much, you can just ask for verification whenever the user tries to make a purchase. This way, even if the fraudster has access to the login credentials, he won’t be able to use that account for purchases as each purchase would require verification from the owner’s phone.
Almost all the online platforms have this option, especially the giants like Google, Facebook, etc. But on those platforms, this is not mandatory. You chose to enable the 2 step verification. So, if you want this 2 step verification in your platform to be optional, you’ll need to notify your existing and all the newly signed up users about this safety protocol. However, you can also make this mandatory for your users if you like.
Tip no 5: Ask your users to use longer & complicated password
This is a very common tip for avoiding risk and fraud. But again, the merchant processor has very little to do in this. At best, the merchant processor can only request the users to sign up with a complicated password. But platforms like Microsoft, enforce this to the users where they strictly tell their new account creators to use a long password that has upper case letter, lower case letters, symbols or special characters and numbers.
So, an ideal password on Microsoft should be like this “jkHg.5$hDhK”. Similarly, you can also make this mandatory in your platform. This way, social engineering won’t work for hackers and the risks will drastically fall.
Tip no 6: Tell your user to stay far away from bots
At this day and age, nothing is safe, not even the sites you visit every day. Hackers and fraudsters try to penetrate the security of a platform every day and sometimes they even succeed in their endeavors. They create malware and bots that are spread through unprotected websites, especially gaming hack sites, adult content sites, pirated software and movies sites, etc. These bots can ruin your reputation in minutes. So, before you end up as a data breaching company to your users, even though the breach was the user’s fault, it is best to make your users aware of this threat and tell them how to handle such situations.
Tip no 7: It is important for the players to avoid hijacked games
The unprotected site that I talked about, the adult content sites, gaming hack sites, etc. often redirect the visitors to some gaming platform where they are introduced to the games via a well-polished gameplay video. Often this video usually doesn’t have anything to do with the game and it is just used to lure the gamers into that hijacking platform.
These hijacking games attract visitors and push them to open an account. Then the game platform hijacks important information from the users to use as a backdoor to social engineering. This how hackers and fraudsters come across user data and make fraudulent transactions, leading to higher fraud risk for the online gaming platform.
But you can help your users to avoid such games by notifying your users about the dangers of playing random games on the internet. The more you can reach this message the better it is for your merchant account because these frauds can affect the merchant account greatly and avoiding this fraud is like saving yourself from potential account suspension threats.
Tip no 8: Don’t forget friendly fraud
Now that I’ve talked about the genuine fraud, it is time to know about friendly fraud.
Friendly fraud can be caused by a number of different reasons and some of them involve system malfunctions.
Sometimes, the payment processing system can cause the user’s card to be charged twice for the same purchase. This could be due to multiple requests to complete a payment or a system glitch. Whatever it is – your user will definitely ask for a refund for the wrongfully charged amount. To avoid any complication with your merchant account provider, it is best to resolve it as soon as possible.
Also, friendly fraud can happen due to the misunderstanding and miscommunication between you and your users. When you are charging for something that will reoccur after a specific time, you need to state that clearly on your checkout page.
For example, say one of your visitors enrolled for ad-free gaming account for $4 per month and he paid the amount in the checkout page. But you forgot to mention that it is a subscription and your visitor will be charged every month. So, what your users do, they check their statement and see another similar purchase from your website. They think they are being “accidentally” charged for the same thing that they paid for last year or even worse, they think you are a cheat. So, make it clear on the checkout page if it is recurring or not. This way, you can minimize friendly fraud and retain your reputation.
In this harsh environment of online scams and frauds, you need to be more careful to ensure the high risk of fraud is not a major issue for your online gaming platform. Implementing these 9 tips mentioned above will help you with the reduction of fraud and secure your merchant account for good.