What is Game Payment Fraud?

Game payment systems are intended to provide access to digital content, including in-game currency, items, and subscriptions, with a focus on security and ease of use. Understanding potential misuse of financial details and exploitation of system gaps allows developers and players to protect transactions and maintain a gaming environment.

Learning about payment fraud scenarios impacts defense mechanisms and gaming safety. Here are the main categories:

1. Credit Card Fraud (Carding): Knowledge of card testing methods, such as small trial transactions or unauthorized high-value purchases, enables developers to develop detection and prevention tools.
2. Chargeback Fraud: Identifying patterns associated with subsequent purchase disputes enables platforms to adjust verification procedures and support the intended use of digital goods.
3. Friendly fraud incidents: These can involve consent-related issues, possibly including family members; reviewing parental controls and authentication systems may provide assistance.
4. Account Takeover (ATO): Strengthening account security through measures such as two-factor authentication helps prevent unauthorized access and protects stored payment methods.

In a scenario where stolen card details are used to purchase virtual currency for transfer, monitoring systems and response mechanisms may identify the activity and potentially limit misuse.

Digital distribution’s impact on payment fraud in online gaming shows similarities to, and dissimilarities from, typical e-commerce transactions. In effect, a merchant can assess whether the transaction is legitimate, potentially avoiding what is referred to as a “shipping delay.”

Game platforms track specific metrics, which identify and deter problematic users from making purchases. These measures differ between legitimate players and potential bots or sophisticated fraudsters.

1. Velocity Checks: The number of transactions performed in a very short period from a single IP or account is analyzed.
2. Geolocation Checks: It can highlight instances where a user’s IP location does not match the credit card billing address, influencing verification and transaction security measures.
3. Proxy and VPN Detection: Since criminals use VPNs to modify their location, recognizing these “hints” can be crucial.
4. Device Fingerprinting: If a user changes their hardware and software to be anonymous, fingerprinting checks the configuration and compares it to the banned accounts ​‍​‌‍​‍‌​‍​‌‍​‍‌file.

A number of gaming companies are currently employing multiple technologies in relation to fraud protection. These solutions rely on artificial intelligence to continuously evaluate millions of data points and identify fraudulent activities.

• 3D Secure (3DS) can be a good way to check high-risk consumers by requesting an additional authentication step.
• Using artificial intelligence, a risk system can be created to automatically identify a high-risk transaction based on a player’s abnormal spending behavior.
• Companies specializing in fraud prevention, such as Sift, Accertify, or Kount, maintain databases of fraudulent identities and can potentially assist with fraud prevention efforts.

The operation of an online gaming platform with a digital storefront provides a context for implementing security measures and addressing potential fraud risks. Here are some questions you can ask yourself:

1. Does your chargeback percentage reach 1% of all transactions?
2. Are “item recovery” requests and player reports about unauthorized account access statistically related?

Factors to consider when determining whether to stay with manual or go for automated fraud detection:

• Automation could be considered for games experiencing high sales volumes.
• Compliance with regulations in terms of payment flow design and execution (for example, PCI-DSS and PSD2).