Stripe monitors accounts for elevated fraud activity in order to promote a healthy financial ecosystem and meet financial partner obligations. If you are a Stripe user in Australia accepting online eftpos transactions, it is important for you to ensure that fraud is kept at acceptable levels, and that you do not exceed the merchant fraud threshold described below. Persistent failure to reduce your eftpos fraud rate could mean that you lose the ability to process online eftpos transactions.
Merchant fraud threshold
The fraud mitigation framework applicable to online eftpos transactions is based on the Australian Payments Network (AusPayNet) Card Not Present (CNP) Fraud Mitigation Framework, which sets out an industry wide approach to reduce CNP payment fraud. Stripe will monitor your online eftpos fraud rates every calendar quarter and will notify you if you exceed the merchant fraud threshold.
Exceeding the merchant fraud threshold
You will have exceeded the merchant fraud threshold for online eftpos transactions if:
- your fraud-to-sales ratio is 0.2% or above, and
- you have more than A$50,000 in fraudulent losses
The value of fraudulent losses is based on fraud chargebacks received in a calendar quarter.
Fraud-to-sales ratio is calculated as follows:
Value F / Value T (Value F divided by Value T)where:
Value F = the value of settled, fraudulent online eftpos transactions in a calendar quarterValue T = the value of all settled online eftpos transactions in that calendar quarterRemediation
You will need to take steps to reduce your merchant fraud rates to a level that is below the merchant fraud threshold. The steps you need to take will depend on the number of consecutive quarters that you have exceeded the merchant fraud threshold.
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One quarter:
- you must implement fraud control measures to reduce the eftpos fraud rate on your account. You may wish to review Stripe’s best practices for fraud prevention.
- we recommend that you implement 3D Secure [1] on your high-risk transactions.
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Two consecutive quarters:
- you must either implement 3D Secure on your transactions; or
- you must further enhance your fraud control measures.
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Three consecutive quarters:
- we will no longer be able to support eftpos as a payment method on your account.
[1] Please be aware that all Stripe transactions requiring 3D Secure will not be routed to eftpos, and will instead be routed to another card network (if possible).