Fraud Management Filters Operating Principles

In addition to how you set up Fraud Management Filters, the operation of Fraud Management Filters depends on the kind of flow, the payment method, such as by Express Checkout, Direct Credit Card, or Virtual Terminal, and interaction with other PayPal fraud protection services.

Fraud Management Filters Operation With Direct Credit Card and Virtual Terminal Payments

Both basic and advanced Fraud Management Filters can be used on Direct Credit Card or Virtual Terminal transactions. For Direct Credit Card or Virtual Terminal transactions PayPal, applies the filters you enable in the following order:

  1. Total Purchase Price Minimum filter
  2. Maximum Transaction Amount filter
  3. Unconfirmed Address filter
  4. Country Monitor filter
  5. Large Order Number filter
  6. Billing/Shipping Address Mismatch filter
  7. Zip Code filter
  8. Suspected Freight Forwarder filter
  9. IP Address Velocity filter
  10. Email Address Domain filter
  11. Bank Identification Number filter
  12. IP Address Range filter
  13. PayPal Fraud Model filter
  14. Address Verification Service No Match filter
  15. Address Verification Service Partial Match filter
  16. Address Verification Service Unavailable or Not Supported filter
  17. Card Security Code Mismatch filter

Note: For Canadian merchants, the Zip Code and Suspected Freight Forwarder filters only operate on US addresses. These filters are not available to UK merchants.

Fraud Management Filters Operation With Other Payment Transactions

For non-Direct Credit Card and non-Virtual Terminal transactions, only basic Fraud Management Filters are applied. For other payment transactions, such as Express Checkout, PayPal applies the basic filters you enable in the following order:

  1. Maximum Transaction Amount filter
  2. Unconfirmed Address filter
  3. Country Monitor filter

Fraud Management Filters Pending State Operation

Transactions that are set aside for review enter the pending state.

You can enable a filter by setting it to Accept, to Deny, Review, or to Flag. Payments awaiting review by you are marked by PayPal as pending. More than one filter can cause a payment to be pended awaiting your review; however, as soon as a filter causes a payment to be accepted or denied, all filtering stops. The filter actions to accept, deny, or pend a payment for review are mutually exclusive; PayPal can take only one of these actions for each transaction as it is processed by a filter.

Note: The Review setting for a filter enables payments to be set aside for your review. It is not the same as additional review actions that PayPal may take on your behalf to reduce fraud.

If you specify that a filter should flag a payment, the PayPal user interface marks the transaction when it is displayed in the PayPal website. A flagged payment is not pended. Another filter may cause a flagged payment to be accepted, denied, or pended.

When a payment is set aside for review, the associated transaction enters the pending state. You must accept for deny the payment before the transaction can complete.

Note: If you do not make a determination within 30 days, PayPal automatically returns the funds to the buyer.

Supported Transaction Flows for Review Action

The kind of flow determines whether a payment can be marked as pending your review; not all flows support the Review action. Only payments made during specific transaction flows can be set aside for review. Payments occurring outside of these flows are either accepted or denied. If the flow does not support the Review action, requests for review are ignored; however, these payments are flagged so that you can view them from the PayPal website. The following transaction flows enable PayPal to pend a payment for review:

  • Web Site Payments Standard for Buy Now and shopping carts
  • Express Checkout
  • Virtual Terminal
  • Mass Pay
  • Credit Card Recurring Transactions
  • Web Accept Express
  • Send Money

Capturing Pending Payments

You cannot capture a payment that was placed in the pending state by Fraud Management Filters. For example, if the payment occurs as part of an authorization or order, you must accept the payment before it can be captured.

Interaction with Payment Receiving Preferences

Fraud Management Filters operates on a payment as soon as the transaction occurs. Other PayPal fraud protection services may not pend a payment until later in the process. A transaction could be pended for your review by Fraud Management Filters and then be pended for your review by another PayPal fraud protection service.

You can use Payment Receiving Preferences with Fraud Management Filters; however, you need to be aware that Fraud Management Filters pends a payment as the first step in processing a transaction while Payment Receiving Preferences may pend a payment during capture. Both Payment Receiving Preferences and Fraud Management Filters can pend a payment during a sale. For authorizations and orders, however, Fraud Management Filters can pend a payment and you can accept it just to have Payment Receiving Preferences pend the payment again during capture. In these cases, you must accept the payment twice.