Payment Transaction Monitoring: Why it Matters and How it Works

Payment Fraud: A Growing Problem

Payment fraud is a growing problem worldwide.The Association of Certified Fraud Examiners reported that payment fraud has a median loss of $8,000 per transaction. This can result in significant financial losses for both businesses and individuals..


There are several types of payment fraud, including:


  1. Credit card fraud: This involves using stolen or fake credit card information to make purchases or withdraw cash.
  2. Account takeover: This happens when a fraudster obtains unauthorised access to a user’s account, often through stolen credentials or other illegitimate methods.
  3. Business email compromise: This involves a fraudster impersonating a business or individual to trick others into sending money or sensitive information.


Payment fraud can have serious consequences for both individuals and businesses. To combat payment fraud, financial institutions need to implement payment transaction monitoring.


The Importance of Payment Transaction Monitoring


Payment transaction monitoring involves tracking transactions in real-time to identify suspicious activity and prevent fraudulent transactions from going through. By monitoring transactions, financial institutions can quickly identify and respond to potential fraud, reducing the risk of financial loss.


In addition to preventing fraud, payment transaction monitoring is also crucial for ensuring compliance with regulations. These regulations require financial institutions to monitor transactions for suspicious activity and report any suspicious transactions to the appropriate authorities.


By implementing payment transaction monitoring, financial institutions can stay ahead of fraudsters and avoid costly fines for non-compliance with regulations. Payment transaction monitoring is also important for maintaining customer trust and loyalty. 


The Payment Screening Process


The payment screening process involves analysing transactions against a set of predetermined rules and criteria. Transactions that match certain criteria may be flagged for further investigation, while others can be processed normally.


The payment screening process is an essential part of payment transaction monitoring. Financial institutions can prevent fraudulent transactions by promptly identifying suspicious activity through transaction screening.


There are several steps involved in the payment screening process, including:


  1. Data collection: Financial institutions collect data on transactions, including the amount, location, and parties involved.


  1. Data analysis: The collected data is examined against a pre-established set of rules and criteria for analysis. This can include comparing the transaction amount to previous transactions, checking the location of the transaction, and looking for patterns of suspicious activity.


  1. Flagging: Transactions that match certain criteria may be flagged for further investigation. This can include transactions that exceed a certain amount, transactions from high-risk countries, or transactions involving parties with a history of suspicious activity.


  1. Investigation: If a transaction is flagged, it will be investigated further to determine if it is fraudulent or legitimate. This can involve contacting the parties involved, reviewing additional data, and performing other checks.


Overall, the payment screening process is a complex and multifaceted process that requires sophisticated technology and experienced professionals. By implementing a robust payment screening process, financial institutions can reduce their risk of fraud and ensure compliance with regulations.


Transaction Screening Solutions


There are several solutions available to financial institutions for payment transaction monitoring and screening. These solutions range from simple rules-based systems to sophisticated machine learning algorithms.


Rules-based systems involve setting up a set of predetermined rules and criteria for analysing transactions. Transactions that match these criteria are flagged for further investigation. Rules-based systems are relatively simple and easy to implement but can be prone to false positives and false negatives.


Machine learning algorithms involve training a system to identify patterns of suspicious activity based on historical data. These systems can be more accurate than rules-based systems but require a significant amount of data to train and can be more complex to implement.


Some popular payment transaction monitoring and screening solutions include:


  1. ACI Worldwide: ACI Worldwide offers a range of payment transaction monitoring and screening solutions, including its Proactive Risk Manager platform. 


  1. FICO: FICO offers a range of fraud detection and prevention solutions, including its Falcon Fraud Manager platform. Through the use of artificial intelligence and machine learning, this platform can swiftly identify and prevent fraudulent activities in real-time.


  1. Bottomline Technologies: Bottomline Technologies offers a range of payment transaction monitoring and screening solutions, including its Secure Payments platform. This platform uses a combination of rules-based systems and machine learning to analyse transactions and prevent fraud.




Payment transaction monitoring is a crucial tool for financial institutions to combat payment fraud and ensure compliance with regulations. By monitoring transactions in real-time, financial institutions can quickly identify and respond to potential fraud, reducing the risk of financial loss.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *