PayPal Developer Blog

Fraud Management Filters

07-15-2008 11:48 AM

writes...

PayPal recently launched an upgrade to the options offered to merchants regarding the amount of fraud risk they are willing to take on. Replacing the Risk Controls that have been in place for the last few years, Fraud Management Filters (FMF) allow you to specify what action to take when certain filters are triggered by a new transaction.

Filters available to all accounts are: the maximum transaction amount you will accept from a customer, which countries you will or will not accept payments from, and whether you will accept payments from Unconfirmed addresses.

Advanced FMF options, available to Website Payment Pro accounts for a monthly fee of $20 plus 5 cents per transaction, offer several more fine-grained controls covering things such as AVS/CVV return values, email address domains, IP address ranges, plus what action to take when a transaction is flagged by PayPal’s internal fraud models.

With the launch of FMF, there are a couple of changes to be aware of with your integrations. Each of the various fraud filters give you three options for the action to take when a filter is triggered. The first two are “accept” or “deny” – but now there is a third option – “review,” which will put the transaction in Pending status and allow you to manually review the transaction to choose if you wish to accept or deny the payment. This step can be done either through the PayPal website, or with the new ManagePendingTransactionStatus API.

So, two things to be aware of if you’re integrating your application to take advantage of the new FMF features – first, update your code to watch for the Pending transaction status. Second, the ACK code on the initial API response for the transaction will be SuccessWithWarning, so update your code to watch for this as well. If both of these conditions are met, you have a transaction that needs manual review (remember, Pending status can also happen when a customer pays with an e-check, so also check the ACK value).

For more details on the steps required to integrate FMF, refer to this page on the PayPal Integration Center

Comments

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07-15-2008 03:03 PM

writes...

I have to say I think that's a bad deal that AVS/CVV isn't included for free like it's always been. That's a vital piece of information you need as a seller accepting credit cards on the web. Looks to me like a sneaky way of PayPal forcing people to pay another $20 + .05 cents per transaction. I think if you want to "upgrade" to new and EXTRA features than what you've always had then sure, pay more money.

As it stands now you have to pay $30/mo for Payments Pro, $20/mo for RPDP, and $20/mo for even the basic AVS/CVV. I still don't really understand the extra $20/mo for RPDP since you're already paying to accept credit cards directly anyway, but I just accepted it myself and have tried to slide it by some of my clients.

$70/mo is no longer a good competetive price for most people that I try and get switched over or get signed up with Payments Pro.

Just my two cents...

On that note, is it true that if you've already been signed up with the new FMF features that you get grandfathered in at no cost?? A sales rep told me that awhile back but he was pretty confused everything himself so I'm not sure if that's correct or not.

Message Edited by angelleye on 07-15-2008 03:23 PM

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07-15-2008 03:47 PM

writes...

I have to agree with angelleye. Most of my clients are just getting started with e-commerce and they don't want to see more up-front costs. By paying a percentage of each transaction, the more they make, the more they pay -- and they're okay with that. But if they have to pay more per month than they're initially collecting, they'll look elsewhere.

It seems PayPal would do better to realize that most new sellers are going to be a loss until their sales increase to a level where the sales fees cover PayPal’s cost to host their account. This way, when their sales do increase, PayPal will be getting the fees instead of another provider.

Set the transaction fees to a level that’s fair for PayPal and the seller, and do away with the monthly charges. You might also consider a more graduated and maybe even steeper sliding scale for transaction fees so that the low-transaction sellers are doing more to cover your costs without paying out-of-pocket.

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07-16-2008 06:27 AM

writes...

According to the Jun 2008 NVP documentation (which has FMF in it), AVSCODE and CVV2MATCH are still part of the DoDirectPayment response. I suspect that they won't be removing these aspects of DDP since they could break customer software if they did. So this raises the question "What will FMF really do then if they're not changing how it works now?"

Reading the FMF documentation (and I could be wrong on this) I get the impression that 90% of what FMF does is introduce the FMF response which can suspend a transaction (a "soft fail", if you will) based on your FMF settings (i.e. your transaction can succeed but failed a FMF check so you have to do an extra step now). If you're not a FMF subscriber you get no FMF response or the "soft fail" feature. From the June 2008 NVP documentation on FMF:

"If your website already uses PayPal APIs and you want to use Fraud Management Filters, you
must manage pending payments."

If I'm right on this, a person with just WPP with something like an AVS failure would always get a hard fail (i.e. ACK=Failure) while someone with FMF could get a "Hey, take a look at this" and you could still allow the transaction to go through.

If this is the case, where FMF simply allows you to change the payment flow and normal WPP still gets AVS and CVV messages and failures, then I (and probably most WPP customers) could live with the monthly fee for FMF options. If, however, angelleye is correct and they are going away entirely for non-FMF clients, then I agree totally with what he said.

Regardless, Paypal really needs to clarify this immediately.

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07-16-2008 11:47 AM

writes...

Thank you for the feedback. We appreciate your comments and are planning on moving the AVS and CVV back to free filters in a future release - but we do not have a date yet. As of now we are just providing basic FMF to new merchants and Advanced FMF to new WPP merchants. We are not migrating any current accounts to FMF until February of 2009. When this happens, existing customers will not see a change in functionality - they will continue to get AVS and CVV for free.

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07-16-2008 03:17 PM

writes...

Actually, the new FMF introduce a bunch of new features that you didn't get with basic Risk Controls. I'm actually signed up for it on one of my accounts. I went ahead and signed up when that sales rep told me I'd be grandfathered in if I did so...still don't know if that's true or not. It looks a lot like PayFlow. Here is a screenshot of all your options: http://sandbox.angelleye.com/temp/FMF.jpg

So, for all of the extra features I can understand paying more. But to move the AVS and CVV into the "advanced" section is what I was questioning. It sounds like they're going to get moved back, though, which is what I was hoping.

If you're curious about what any of these new filters does exactly let me know and I can post the detailed information it gives.

Message Edited by angelleye on 07-16-2008 03:28 PM

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07-18-2008 06:17 AM

Batteries writes...

Is this the update the caused many of us that use confirmed address verification to start receiving code 10417?
I would like to see this issue tracked on the LIVE SITE STATUS page.

Message Edited by Batteries on 07-18-2008 08:18 AM

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07-18-2008 12:46 PM

writes...

I hadn't thought about the possible connection here but I'm having horrible issues with confirmed addresses right now that I've posted about in a thread already. MTS isn't being very helpful so far. They keep asking for samples and I keep sending them and then they just keep asking for more. It's a bad situation, though.

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07-21-2008 07:55 AM

writes...

There was an issue that was related to another product. That issue was causing the 10417 error and it has been fixed.

Message Edited by PayPal_Carolyn on 07-21-2008 07:55 AM

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07-21-2008 12:29 PM

writes...

According to the FAQ's on the PayPal web site regarding FMF anybody using Risk Controls should have been updated to FMF by May 7th. Might wanna update that cuz it's apparently not the case. I've got a client I'd actually like to get setup with FMF and I can't find the option to sign them up anywhere. All they have is Risk Controls and they don't have the link that I had in my own account to upgrade to FMF.

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08-05-2008 06:04 AM

writes...

I missed PayPal_Carolyn's statement saying "We are not migrating any current accounts to FMF until February of 2009".

Anyway, since I could not find the option in my account I contacted MTS and they responded with this:

"The fraud management filters will not be available within U.S. PayPal accounts until February '09.

If you seen information on the PayPal FAQ's that this should have happened on May 7th, i would disregard this information as it is incorrect.

Our content team have been advised of this incorrect information and it will be modified to reflect the correct date".

Should anyone want to check out FMF while waiting, you can tinker with them in the Beta Sandbox. The 3 free filters are pretty cool. What I really like is that for those folks who do not ship international, you can lock out every country except the US.

Message Edited by skier on 08-05-2008 07:05 AM

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