Credit Card Fraud Issue with PayPal

[derekwong28]

We have a very high level of fradulent activity against our site. We use Worldpay as our payment processor and each transaction is issued against chargeback up to GBP250. With a very tough screening policy, we have managed to keep chargebacks to less than 0.5%

We are now thinking of adding PayPal to our list of payment providers. Since we are based in Hong Kong, we are not covered by the PayPal guarantee scheme.

I am particularly worried about the possibility that the person may have opened a PayPal account with a stolen or hacked US credit card and then ordered goods to be shipped to a developing country. I am not sure whether any way that we can check on this.

I wonder if anybody has any experience with credit fraud with PayPal. Should we impose a maximum transaction amount e.g. $100 for PayPal or refuse to ship PayPal orders to certain countries?

[TallTroll]

I should have thought that your current screening policies would stand you in good stead. Its not as if you're going to suddenly have to introduce new procedures. You could introduce PP on a trial basis. Remember, if you find that it isn't working for you, for any reason, you can stop using it

[pbreit]

If you feel like your service is particularly susceptible to fraud, you could add PayPal with an initial limit of, say $100, and scale up as you become more comfortable. You could also take into account that verified accounts are generally less fraudulent than unverified, and shipping to a confirmed address is safer than shipping to an unconfirmed address. For the payments you do not wish to fulfill, process a refund to receive a full fee credit.

[derekwong28]

Hi, thanks for your advice. We have just received an order from an unverified member with a confirmed shipping address. Please can somebody explain how this could come about. I thought that confirmed addresses can only apply to verified members.

[too much information]

I think the verified part comes in when you tie your bank account to your PayPal account. Otherwise you only have a credit card linked to your PayPal account.

You can still have a confirmed address without having your bank account linked to PayPal. I don't think they two are related.