As digital commerce scales new heights, so does the sophistication of online payment fraud. In 2025, global losses from online fraud are projected to exceed $48 billion, driven by increasingly agile fraudsters exploiting vulnerabilities across the payment ecosystem.

Understanding the most common types of payment fraud and how to prevent them is essential for any business operating online. Whether you're a fintech, e-commerce platform, or global merchant, staying ahead requires a mix of technology, vigilance, and strategic risk management.

Below, we break down the top fraud types impacting online payments today and what you can do to safeguard your business and customers.

1. Card testing fraud

Fraudsters use stolen card data to make small, low-risk purchases on an e-commerce site. If the transaction succeeds, they know the card is active and move on to larger fraudulent purchases elsewhere.

Prevention Tips:

• Use velocity checks to detect rapid-fire transactions from the same IP or device.

• Implement 3D Secure 2.0 for authentication on risky transactions.

• Block or flag unusually small transactions coming from the same user in quick succession.

2. Chargeback fraud

A customer makes a legitimate purchase, receives the goods or services, and then falsely disputes the charge with their bank to get a refund—keeping the product and the money.

Prevention Tips:

• Maintain clear purchase records and delivery confirmations.

• Use digital receipts and robust customer service logs.

• Work with payment providers that offer chargeback protection and dispute resolution support.

3. Account takeover (ATO)

Cybercriminals gain unauthorized access to a user’s account—often through credential stuffing, phishing, or social engineering—and make fraudulent purchases or transfer funds.

Prevention Tips:

• Require multi-factor authentication (MFA) on all logins.

• Monitor for suspicious login patterns, like logins from new devices or IPs.

• Use behavioral biometrics and device fingerprinting for real-time fraud detection.

4. Triangulation fraud

A fraudster sets up a fake online storefront offering discounted goods. Unsuspecting customers pay the fraudster, who then uses stolen card data to buy and ship the product from a legitimate site—pocketing the customer’s money and exposing the cardholder to fraud.

Prevention Tips:

• Educate consumers to buy from verified sellers.

• For merchants: watch for purchases where the billing and shipping addresses don’t match.

• Use machine learning tools to analyze transaction anomalies at scale.

5. Synthetic identity fraud

Fraudsters create entirely new identities using real and fabricated data—like a stolen Social Security Number paired with fake names and addresses—to open fraudulent accounts and slowly build credit, only to max out lines of credit and disappear.

Prevention Tips:

• Partner with identity verification platforms that use biometric and document verification.

• Leverage AI-powered fraud detection tools that can identify suspicious identity patterns.

• Cross-check user data against known fraud databases.

6. Merchant fraud

A fake business poses as a legitimate merchant, sets up a payment gateway, processes multiple transactions (often with stolen cards), and disappears before customers realize they’ve been scammed.

Prevention Tips:

• Payment providers should perform rigorous merchant onboarding checks.

• Look out for high-risk verticals with a history of fraudulent behavior.

• Use automated risk scoring to assess new merchant applications.

Building a proactive fraud prevention strategy

Fraud prevention isn’t just about stopping bad actors it’s about creating seamless, secure experiences for legitimate customers.

Here’s how to stay ahead:

1. Layer your defenses: Combine tools like fraud scoring, 2FA, tokenization, and facial biometrics.

2. Use real-time machine learning models: These adapt to new fraud patterns faster than rule-based systems.

3. Partner with fraud-aware payment providers: Choose partners who offer KYC, advanced monitoring, chargeback protection, and global risk intelligence.

4. Educate your team and users: Awareness is a critical first step in reducing human error and social engineering threats.

Despite all the accounts of fraud, phishing, and hacking, it’s hard to deny that digital payments are the future of commerce. Fraudsters will always be present, either in online or offline transactions, so abandoning virtual transactions isn’t the best solution.

Fight Payment Fraud with Beeteller

Cross-border doesn’t have to mean high risk.

At Beeteller, we combine cutting-edge fraud technology with regulatory-grade compliance standards to help global merchants prevent financial crime, protect customer trust, and scale securely in Latin America.

Our fraud prevention stack includes:

• KYC verification

• Real-time transaction monitoring and 24/7 fraud response

From onboarding to ongoing monitoring, Beeteller gives you enterprise-grade fraud protection and regulatory peace of mind in one seamless integration.

Protect your business before fraud happens. Let’s build secure cross-border payments together.