In today’s evolving payments ecosystem, merchants face an ongoing challenge: they need to boost authorization rates and increase revenues while also protecting themselves from rapidly evolving fraud trends. As digital commerce grows, so does the sophistication of fraudulent activities. Merchants who prioritize robust authorization strategies and invest in fraud-prevention tools are better positioned to protect their brand, reduce revenue loss, and enhance customer satisfaction.
Newest in Visa Consulting & Analytics’ insights series, What’s influencing payments in 2025: 10 recommendations on business strategy, Visa consultants deep-dive into the rapidly evolving fraud landscape, highlight recent trends, and outline fraud-prevention strategies for today’s merchants.
Fueled by increased access to technology and facilitated by the illicit networks and tools available on the dark web, financial cybercrime has advanced from basic card theft to more complex attacks: account takeovers, the creation of synthetic identities, and large-scale data breaches.
A single high-profile breach or spike in fraudulent transactions can damage a merchant’s brand. Consumers are unlikely to return to businesses they perceive as not secure. Fraud also results in financial losses due to chargebacks, where customers dispute and reverse transactions, as well as through reimbursements and loss of goods or services. On the other hand, friction caused by false declines or complicated authentication processes can lead to consumer frustration and cart abandonment.
Fraud trends are dynamic. VisaNet data shows some forms of fraud, such as counterfeit card fraud, have declined due to the adoption of chip technology. In the last two years, card-present (CP) fraud rates have decreased by about 85 percent, while card-not-present (CNP) fraud continues to rise as ecommerce grows.¹ Fraudsters are using automated bots and ever-advancing phishing schemes to steal cardholder credentials, making it vital for merchants to stay ahead with adaptive, effective fraud-prevention tools.
Techniques to optimize authorization rates
A key aspect of increasing merchant success is helping legitimate transactions are approved and false declines are decreased.
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Tokens replace sensitive card data with unique, transaction-specific identifiers, which streamline the payments process and enhance security throughout the transaction lifecycle. When tokens are used, sensitive card information is replaced and reduces the risk if the data were to be intercepted via data breach or leak. By helping minimize exposure to fraud, tokenization can assist in reducing declines due to suspected fraud, which is the second highest decline reason globally, and increases issuer confidence in approving transactions. The average global token adoption from Q1 2024 to Q1 2025 increased by 6%.¹
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To help verify cardholders during CNP transactions, some merchants use 3D Secure (3DS), a solution designed to help reduce unauthorized transactions by adding a second authentication step and by involving the issuer in the transaction flow. For merchants, 3DS provides a liability shift for fraud-coded chargebacks where the issuer is responsible for the unauthorized charge and not the merchant.
Alternatives to 3DS include real-time data sharing solutions that send enhanced information to issuers before authorization, which is particularly valuable for CNP transactions. The exchanged data between the merchant and issuer about their shared customer can assist in helping reduce false declines.
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Unnecessary declines can impact a merchant’s bottom line and customer relationships. Some attempted transactions with certain decline codes (known as soft declines) can be retried to complete a successful payment. For example, transactions declined due to a cardholder’s insufficient funds, which is the most common reason for card decline across all regions, can be reattempted after a reasonable waiting period to allow the customer to address the issue. However, a lost or stolen card decline message, referred to as a hard decline, should not be reattempted.¹
Best practices for fraud detection and prevention
To help navigate the complexities and challenges of today’s online fraud environment while simultaneously balancing risk mitigation with enhanced customer experience, Visa consultants recommend the following six practices to merchants:
Deploy pre-authorization fraud checks
Deploying real-time screening tools that analyze transactions before they are sent to the issuer for authorization can help prevent fraudulent attempts from impacting approval rates.
Utilize machine learning (ML) and artificial intelligence (AI)
Device fingerprinting and biometrics use advanced algorithms to detect suspicious patterns and adapt to new fraud tactics. Machine learning can identify anomalies in transaction behavior that may bypass traditional rule-based fraud detection systems.
Decrease operational time spent on fraud screening
Automation can assist with blocking transactions that match known fraud patterns, which frees up staff time for more complex investigations.
Conduct frequent reviews and re-evaluations
A fraud strategy requires continuous monitoring and re-evaluation to help ensure it is effective against emerging threats. It is important to regularly adjust fraud detection parameters and review recent fraud cases for new patterns.
Use smart velocity checks
Set velocity thresholds around transaction frequency within a specific timeframe.
Analyze geolocations and IP addresses
Cross-reference customer location data and monitor for mismatches between shipping and IP geolocations.
Visa solutions for merchants
The VCA team can work with merchants to identify areas of opportunity to optimize their approach to authorization and fraud prevention. Visa has the following solutions to assist in mitigating fraud and increasing acceptance.
Visa Protect Risk Insights
A data-driven platform that provides merchants and financial institutions with real-time analytics and actionable intelligence to identify, monitor, and mitigate payments fraud and risk
Visa Token Services
Facilitates tokenization for higher approval rates and greater security, ushering in a more secure era of e-commerce
Visa Data Only
Enables enhanced data sharing between merchants and issuers for better decision-making
Visa Account Updater
Securely provides merchants and payment processors with updated cardholder information (e.g., new account numbers or expiration dates) to help avoid any interruption in recurring payments and to reduce transaction declines
Feature space
Integrates advanced AI into its fraud prevention and risk-scoring offerings. This enhancement provides real-time detection of sophisticated fraud attacks, ensuring businesses stay safe without adding friction to the user experience
Partial Authorization
Ability to approve a transaction for a portion of the requested amount when a cardholder’s available balance is insufficient, allowing the customer to use another form of payment for the remaining balance
Top 3 Decline Reasons (Globally) by Amount*
¹Global VisaNet data from April 2023 - March 2025 for all regions (EU, AP, LAC, CEMEA, U.S. and Canada)
*Ranking is unchanged by individual region
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