Protecting Your High-Risk Business from Fraudulent Transactions

If you’re running a high-risk business, you’re all too aware of the constant threat of fraudulent transactions looming over your operations. We get that fraud prevention isn’t just some business expense you can easily write off – it’s a matter of survival when payment processors can drop you at any given moment and a single breach can cause years of reputation and hard work to be wiped out. You’ve come to the right place to learn some proven strategies that will actually work for businesses like yours.   Protecting your high-risk business from fraudulent transactions is about putting in place a robust defense system that uses a combination of AI-powered detection tools, strict compliance rules, training your staff, and ongoing monitoring to catch and block suspicious activities before they end up costing you financially. TL;DR Summary: Understanding the types of fraud that are commonly found in high-risk industries will help you spot red flags such as account takeovers and fake identities. Advanced AI-powered tools and payment gateway features offer real-time detection capabilities that provide a 40% improvement in accuracy. Having in place internal policies, training your staff on spotting fraud patterns, and maintaining PCI-DSS compliance is creating a solid defensive foundation. If fraud does occur then it’s about immediate containment and proper documentation to help with recovery and prevent future incidents. Choosing the right fraud prevention partner means looking at their AI capabilities, compliance certifications and a proven ROI in reducing fraud losses. 2Accept offers specialized solutions that are designed specifically for high-risk businesses just like yours that are facing these challenges. Practical Tip: First off start by implementing device fingerprinting on your payment forms – this simple step can help reduce fraud attempts by tracking and blocking suspicious devices before they even initiate a transaction without adding any friction to legitimate customers.

What types of fraud do high-risk industries commonly come across?

High-risk industries are subject to a number of common fraud patterns. The most common types are:

• Account takeover attacks – where fraudsters hijack online accounts, often through phishing, and use the stolen login credentials to spend the user’s money.
• Synthetic identity fraud – where fraudsters combine real and fake info to create a completely fake identity that they can then use to open credit accounts and make purchases.
• AI-powered deepfake scams – where AI is used to create fake audio or video recordings to trick victims into giving over their financial information.

Account takeover fraud volume increased by 141% from H1 2021 to H1 2025, while synthetic identity fraud combines real and fake information to create fabricated personas.   High-risk businesses face these threats at a disproportionate rate thanks to their high volume of transactions and customer demographics. Understanding these fraud patterns will help businesses like yours spot red flags, understand why they were classed as high-risk in the first place and get one step ahead of emerging threats.

How do you identify the red flags of fraudulent transactions?

Red flags of fraudulent transactions include selfie mismatches, unusual patterns of behaviour, and transactions that don’t add up. Selfie mismatches are the most common type of fraud in iGaming platforms. AI-powered deepfake scams have grown tenfold in the gaming industry. Unusual behaviour on a user’s account might include:

• Unusual patterns of behaviour that are not in line with the user’s regular spending habits
• Unusual device usage – i.e the user has moved from a known device to an unknown one
• Unusual login habits – i.e. trying to log in at odd times or from unexpected locations
• Multiple failed authentication attempts followed by successful access

Synthetic identity fraud combines real and fake info to create completely fake identities that can bypass traditional verification checks. Fraudsters can build up fake credit histories over months before executing large-scale attacks. Catching these patterns early on can prevent significant losses.

Why are certain businesses classed as high-risk for fraud?

Certain businesses are classed as high-risk for fraud because of the vulnerabilities inherent in their industry and the historical rates of fraud that they’ve experienced. According to a 2024 industry analysis 89% of adult entertainment business platforms face payment processor rejections within their first year. The iGaming industry fraud rate has reached 6.48% in 2024. The gaming and iGaming sectors experienced a 64% year-over-year fraud increase between 2022 and 2024.

Industry	Fraud Metric	Value	Source/Year
E-commerce	Projected losses	$44.3B → $107B	2024-2029
Cryptocurrency	Annual fraud losses	$9.3B (66% increase)	2024
iGaming	Current fraud rate	6.48%	2024
Adult entertainment	Processor rejection rate	89%	First year

These elevated fraud rates are a result of factors such as the anonymity of transactions, operating across international borders and the digital nature of online interactions which can make it harder to verify identities.

What are the latest fraud trends affecting high-risk businesses?

The latest fraud trends affecting high-risk businesses include AI-driven fraud, pig butchering investment scams, friendly fraud chargebacks, subscription renewal scams, and cross-border fraud. Emerging schemes are evolving fast – especially for high-risk sectors. Key 2025 trends include:

• AI-driven fraud which uses artificial intelligence to target and deceive online users
• Pig butchering investment scams which lure victims into investing in fake businesses
• Friendly fraud chargebacks which are chargebacks initiated by the cardholder themselves as a way of getting money back
• Subscription renewal scams which trick users into renewing subscriptions they never signed up for
• Cross-border fraud which takes advantage of payment complexities across international borders

These complicated scams exploit the trust between a business and its customers, technology gaps and the complexities of international payments. High-risk businesses need to be able to adapt their defences in order to stay one step ahead of these evolving threats with enhanced verification and monitoring systems.

What tools and technologies help prevent fraudulent transactions?

Fraud prevention tools and technologies are the backbone of your defence against evolving threats and can provide a solid foundation for your business. The best solutions work best when each layer is reinforcing the others. Here’s the core technology stack that prevents fraudulent transactions before they can impact your business:

• Artificial intelligence – which can be used to power detection tools and help spot suspicious activity
• Advanced authentication which can help increase the security and verification of transactions
• Secure payment infrastructure which can help protect sensitive user data and prevent unauthorised transactions

These systems work together to provide multi-layered protection that can adapt to emerging fraud patterns while keeping the experience of legitimate customers seamless.

How do fraud detection software and AI systems work?

AI fraud detection systems dig through vast amounts of transaction data in real time to look for patterns and anomalies that might signal potential fraud. These systems rely on machine learning algorithms that keep on learning from new data, gradually improving their accuracy in sniffing out dodgy transactions.   Behavioural analytics keep a close eye on transaction patterns, how people use their devices and login habits to get a sense of how each user normally behaves, then flags anything that looks like an unusual deviation. This often indicates account takeover or synthetic identity fraud.   According to a financial crime detection report from 2024, 74% of financial institutions are using AI to stop fraud, and businesses that get serious about implementing good AI fraud detection tools have seen a 40% boost in accuracy.   Machine learning systems can chomp through millions of transactions at once, which means they can spot threats right away that would take forever to spot manually. AI flags things that would normally fly under the radar in a manual review. Common warning signs include:

• Velocity patterns – fast transactions
• Geographic inconsistencies – people trying to use cards from a new location
• Behavioural anomalies – using a payment method that’s never been used before

These AI-powered systems do a great job of sniffing out complex schemes by looking at all the different data points across a transaction, an account, and a device.

What payment gateway features can help reduce the risk of fraud?

Payment gateways that are equipped with good fraud prevention features provide a vital line of defence at the point of transaction. The most effective payment gateways are the ones that layer multiple controls at the point of transaction. That means:

• Real-time transaction monitoring to catch and block dodgy transactions before it’s too late to do so
• PCI-DSS required encryption to keep cardholder data safe as it’s being sent around
• Risk-based authentication that adjusts security to match the level of risk involved in a transaction
• Secure tokenization that replaces stored card details with unique codes
• Advanced verification tools during onboarding to establish trusted profiles
• Integrated security layers such as velocity checks and geolocation verification

Which authentication methods are most effective for businesses that are at high risk?

High-risk environments need layered authentication that makes it as hard as possible for bad guys to get in. You should prioritise these:

• Multi-factor authentication (passwords, biometric data, device verification)
• Biometric verification with selfie matching and liveness detection
• Device fingerprinting to spot unfamiliar hardware
• Enhanced due diligence when it comes to merchant identity and beneficial ownership
• Strong KYC measures before allowing people to use your systems

By using these authentication methods together you can create friction for fraudsters while still keeping user experiences reasonable. Each layer of security makes it a lot harder for fraudsters to get in.   As fraudsters get more and more sophisticated, these tools and systems need to keep on adapting to keep on giving good protection for high-risk businesses that are operating in really tough payment environments.

What steps can high-risk businesses take to reduce their exposure to fraud?

The steps high-risk businesses can take to reduce their exposure to fraud are implementing multi-layered fraud prevention strategies, strengthening internal policies, training staff, and investing in continuous monitoring. High-risk businesses need to put in place comprehensive fraud prevention strategies to protect their revenue and keep on being able to process payments.    That means a multi-layered approach that includes internal policies, staff training and continuous monitoring. This is especially important because, as a 2024 report shows, fraud losses averaged 9.8% of revenue for U.S. companies last year, which is a 46% increase from the year before.

How do you develop and enforce internal fraud prevention policies?

You develop and enforce internal fraud prevention policies by clearly defining how cardholder data is protected, who can access it, how networks are secured, and how incidents are handled, then formalising these rules into enforceable procedures.   Internal fraud prevention policies set out the rules for protecting cardholder data and detecting suspicious activities. Good internal policies define who can access data, how networks are protected and how to handle incidents. You should build and enforce:

• Information security policy (PCI-DSS) for cardholder data
• Access controls on a need-to-know basis
• Configured firewalls and vulnerability management programs
• Malware defences targeting payment data
• Clear protocols for suspicious transactions and customer disputes

According to a 2024 report from the PCI Security Standards Council, businesses that have comprehensive security policies in place experience 60% fewer data breaches..

What staff training is essential for fraud prevention?

Staff training creates the human firewall against fraudulent transactions. You should train teams to be able to spot red flags and follow the right procedures. Core modules should include:

• Behavioural anomaly recognition (unusual purchase patterns, mismatched shipping, rapid multiple transactions)
• AI-driven fraud awareness and deepfake training
• Chargeback handling procedures
• Security awareness for cardholder data
• Regular updates on industry-specific fraud patterns

A 2024 study from the Association of Certified Fraud Examiners shows that organisations with fraud awareness training were able to spot schemes 50% faster than those without formal training. Training frequency directly correlates with success rates.

How can regular transaction monitoring help detect suspicious activity?

Regular transaction monitoring allows for immediate fraud detection and response. Continuous logging tracks all access to network resources and cardholder data, which is what PCI-DSS requires. Real-time analysis blocks dodgy transactions before completion.   Behavioural analytics establish baseline activity patterns for each customer. When deviations are detected, alerts are triggered for manual review. There are different monitoring approaches, such as velocity checks, geolocation analysis and device fingerprinting.

Monitoring Type	Key Attribute	Specification / Value	Source/Year
Transaction Monitoring	Detection Speed	Real-time	PCI-DSS 2024
Behavioral Analytics	Baseline Creation	7-14 days	Industry Standard
Pattern Recognition	Fraud Indicator Types	15+ categories	AI Systems 2024
Security Testing	Required Frequency	Quarterly	PCI-DSS 4.0

A study by the 2024 Merchant Risk Council shows that businesses who use automated monitoring systems are able to detect synthetic identity fraud three times faster than if they were to rely on manual review processes. Pattern recognition looks for tiny signs of trouble across multiple data points at the exact same time.   These safeguards all work together to give you a top-notch fraud defence system. The next section takes a closer look at the legal and compliance requirements that dictate how these anti-fraud measures are implemented for high-risk businesses.

What legal and compliance requirements do high-risk businesses have to follow to prevent fraud?

The rules and regulations that high-risk businesses have to follow to prevent fraud are the foundation of their anti-fraud strategies. High-risk merchants are under stricter regulatory scrutiny because of the higher level of fraud risk in industries like adult entertainment, crypto-currencies, and online gaming.

What industry regulations govern high-risk merchant accounts?

Regulatory frameworks set the minimum requirements for data security and anti-money laundering. This table sums up what they cover and why.

Regulation/Framework	Core Requirement / Focus	Applicability / Note
PCI-DSS 4.0	Mandatory for accepting/transmitting/storing cardholder data; more stringent data protection & network security	Mandatory from April 1, 2024
AML	Risk-based compliance; enhanced due diligence for high-risk merchants	Thorough verification processes
BSA/AML	Verification of merchant identity, beneficial ownership, and business activities	Pre-onboarding verification

  Banks take extra steps to scrutinise high-risk merchant accounts by:

• Checking out the merchant’s ID properly
• Monitoring transactions all the time
• Having regular compliance audits
• Requiring stricter reserve requirements

These regulatory frameworks protect the payments system from money laundering, terrorist financing, and scams targeting vulnerable industries.

How do chargeback rules impact high-risk businesses?

Chargeback rates went up by 816% between Q1 2023 and Q1 2024, which is a major problem for high-risk merchants. In 2023 for every $100 in dodgy orders, merchants lost an average of $207 including fees and operational costs. This financial burden is especially tough on high-risk businesses which are already operating on thin margins.   Non-delivery disputes and service cancellations are the main causes of chargeback increases. In the adult entertainment industry, vague billing descriptors often cause cardholder confusion chargebacks when cardholders do not recognise the transactions. Gaming platforms get hit with friendly fraud chargebacks from players who dispute legitimate purchases after losing.

Card Network	Threshold Metric	Value
Visa	Chargeback ratio limit	0.9%
Mastercard	Excessive chargeback threshold	1.5%
—	Monitoring program frequency	Monthly

  If you fail to sort out chargebacks you can lose your payment processing facilities for good. High-risk merchants who get above the thresholds will have their accounts terminated immediately, which makes keeping chargebacks under control absolutely vital for business survival.

What documentation and reporting practices support compliance?

Documentation and reporting support compliance by keeping track of everything through regular record-keeping and audit trails. How long you have to keep records varies by type and by the audit you are doing. Use this matrix to keep track of policy and records management.

Record Type	Purpose	Retention Period
Security policies	Regulatory audits	3 years minimum
KYC records	Identity verification	5 years after account closure
Transaction logs	Fraud investigations	2–7 years depending on jurisdiction
Vulnerability assessments	PCI-DSS compliance	Until next assessment

Report any suspicious transactions as and when required under AML rules within a certain timeframe. Document security policies & procedures for regulatory audits to show you are doing your bit to comply with the rules. Keep records of verifying the identity of customers including ID documents and verification timestamps.   Keep records of regular security testing & vulnerability assessments. High-risk businesses need to document quarterly network scans, annual penetration tests, and how they fixed any problems to meet PCI-DSS requirements and show regulators & payment processors they are proactive about security.

What do you do if your high-risk business has had some dodgy transactions?

If your high-risk business has had some dodgy transactions, you need to follow a structured response that focuses on containment, investigation, notification, and recovery. Responding to dodgy transactions needs a plan of action and a systematic approach to limit the damage and stop it happening again. A 2024 report by the FBI IC3 shows $16.6 billion reported losses to fraud, while US companies lost an average of 9.8% of turnover to fraud—a 46% increase from last year.   Consumer fraud losses exceeded $12.5 billion in 2024, a 25% jump from the previous year. Effective fraud response combines quick action, thorough investigation & smart recovery measures.

What are the first steps you need to take when you detect fraud?

The first things you need to do when you detect dodgy transactions are isolate affected systems, freeze any suspected accounts and document everything. First, halt any affected systems & freeze any suspect accounts to stop any more losses. Document everything including all the transaction details, times & IP addresses for investigation purposes. Tell your payment processor, bank and any other relevant parties about the problem within 24 hours. Alert any affected customers about possible account compromise in secure channels.   Initiating an internal investigation, we need to follow our protocols while keeping all digital evidence in place for the authorities. We file reports with the IC3 and local law enforcement when the losses get high enough to hit the reporting thresholds. It all sets the foundation for where we can realistically expect to recover our losses and have any legal weight on our side.

How to Work with Banks and Law Enforcement on an Investigation?

You’re going to need to have a close relationship with the banks and law enforcement – proper communication and documentation is crucial. That’s the key to getting a good outcome with fraud recovery. To build that relationship, we need to put these practices in place:

• Get one person to oversee all the external work – so there’s just one point of contact for everyone involved
• Bring over as much evidence as you can: transaction logs, customer emails, security footage – the lot
• Submit a merchant incident report (with a timeline, the accounts that got hit, and an estimate of the losses)
• Have the paperwork ready for the prosecution: affidavits, evidence trails – the whole works
• Collaborate with card network investigations (on repudiation, liability) – that’s how it works
• Keep asking for updates and timelines – you want to know what’s happening and when

When merchants can show that they’re proactive at preventing fraud and reporting it properly, that’s when you start to build a strong partnership with the banks and law enforcement.

Recovering from and Preventing Future Fraud

To do this, we need to combine some new tech with some operational changes. Financial institutions say they’ve knocked off 40-60% of their fraud losses after getting AI solutions, and we’ve seen similar improvements in operational efficiency in businesses that use AI to detect fraud.   Do a post-incident analysis to see where the weaknesses are, what process gaps we have, and where the hackers are trying to manipulate us. Then, update our fraud prevention protocols to match what we’ve found out.   Add an extra layer of authentication for high-risk transactions like big purchases, international transfers, and changes to account settings. And get some machine learning models in place that are trained on our own specific patterns of fraud – that will help with accuracy.   Schedule regular security audits and penetration tests too. We want to turn these incidents into learning opportunities to make our security even better.

Evaluating and Choosing the Right Fraud Prevention Partner

Finding the right fraud prevention partner – that all starts with a serious assessment of what they can do, what it will cost, and whether it fits with what we need. The choices we make will have a huge impact on whether we cut our fraud losses by 40-60% or whether we’re still facing the same old threats.

What to Look for When Selecting a Fraud Prevention Service

We need to focus on the real stuff when evaluating a vendor – measurable capabilities, cost, and how well they match what we do. The top priority should be:

• Real-time threat detection
• How good are their AI and machine learning skills?
• Do they have the right compliance certifications (PCI-DSS 4.0)?
• Can they spot fraud accurately and not flag too many false alarms?
• Will they integrate with our current payment systems and infrastructure?

Any business that’s got a solid AI-based tool for detecting fraud has seen a significant improvement in accuracy, up to 40% in some cases. According to 2024 data from financial institutions.   The way they use behavioural analytics is also key – that lets us set up what’s normal for our customers and spot when there’s something unusual. And of course they need to be PCI-DSS 4.0 compliant – the deadline for that was April 1st, 2024, so it’s no longer optional.

How to Compare the Costs and Benefits of Different Fraud Prevention Tools?

You compare the costs and benefits of different fraud prevention tools by weighing their price ranges against expected fraud reduction, false positive rates, and operational savings. The costs and benefits of fraud prevention tools vary wildly – from a basic system at $20,000 to $50,000, to an enterprise system at over $150,000. The investment you put in will be matched by the level of sophistication and the level of fraud the system can prevent.   A recent study of financial institutions found that AI-powered systems cut fraud losses by 40-60%, way out-performing the old rule-based systems. Any return on investment calculation needs to take into account the money we save on prevented losses, the efficiency gains, and the reduced chargebacks. Last year, merchants were losing an average of $207 for every $100 in fake orders, including fees and operational costs.

Solution Type	Cost Range	Fraud Reduction	False Positive Rate
Basic Rule-Based	$20,000-$50,000	15-25%	8-12%
Mid-tier Hybrid	$50,000-$100,000	25-40%	5-8%
Enterprise AI	$100,000-$150,000+	40-60%	2-5%

We need to factor in the costs of implementation – licence fees, integration expenses, training for staff, and ongoing maintenance.

What Questions to Ask Potential Fraud Prevention Providers?

Our goal is to compare the vendors fairly – so we should ask the same questions of each one. We need to know:

• How good is their detection rate? How low are the false positives? How fast do they process transactions?
• How do they put their machine learning to work? How often do they update the models?
• Can they show us some real data from our industry – that way we can see if it actually works?
• How well will they integrate with what we’re already doing?
• *What’s their track record like with businesses like us – we need to know if they’re experts in our area of the market? Compliance: where are you at on the new PCI-DSS 4.0, and how are you handling data residency and audit trails?
• Customisation: what kind of risk scoring thresholds and rule configurations are you looking for?
• Pricing & terms: can you give me a rundown on setup fees, per-transaction costs, volume discounts, SLAs, and escalation – I want to be clear on the fine print before we move forward.

These comprehensive evaluations will make sure our chosen partner fits your needs right now and down the line as your high-risk business keeps growing – including on the fraud prevention front.

How can 2Accept help keep your high-risk business safe from fraudulent transactions?

At 2Accept we’re all about providing high-risk businesses with the tools they need to tackle the heightened transaction security risks that come with the territory. Our platform brings together cutting-edge AI-powered detection systems and industry-specific risk management tools to look after merchants in sectors like e-commerce, cryptocurrency, and iGaming – areas that know all about elevated security challenges.   And let’s be honest, with projected losses from card-not-present (CNP) transactions on track to reach a staggering $25 billion by 2024, its clear that businesses need all the help they can get to prevent this kind of thing from happening in the first place.

What kind of fraud prevention solutions does 2Accept have for high-risk businesses?

We have a pretty comprehensive suite of solutions for high-risk businesses to protect themselves from those would-be fraudsters – including real-time transaction monitoring, AI-powered behavioural analysis, and PCI-DSS 4.0 compliant payment processing, all working together in perfect harmony.   Our machine learning algorithms can take a look at millions of transactions all at once – up to 40% better than the old methods in some cases – and pick up on any patterns or anomalies that may be cause for concern. We also throw in some multi-factor authentication, biometric verification, and device fingerprinting to create solid identity verification layers.   The platform does risk-based authentication to boot, adjusting security levels based on the specifics of the transaction – and by that, I mean things like the amount, the location, and the type of merchant. We’re also using tokenization to keep cardholder data locked away safely while still giving your customers a seamless payment experience. And I should mention our automated dispute resolution workflows that’ll help you manage chargebacks more efficiently – especially given the astonishing 816% chargeback rate hike between Q1 2023 and Q1 2024.   2Accept also includes some industry-specific fraud prevention modules to deal with unique risks like adult entertainment, cryptocurrency, and subscription services. We have some extra due diligence features to verify merchant identity and beneficial ownership too – all because of the AML regulations.   We’ll give you real-time alerts about any suspicious activity, and our risk thresholds are fully customisable so you can get that just-right balance of security and customer experience.

What are the key takeaways from protecting your high-risk business from fraudulent transactions?

Here’s the thing: you really need AI-powered detection systems, comprehensive compliance frameworks, and continuous adaptation strategies to really keep those fraudsters at bay.   And let’s face it, it’s a numbers game – online payment fraud is going to reach $25 billion annually by 2024, which is just ridiculous. So, proactively preventing this is basically essential for business survival these days.   What’s more, a recent industry report found out that 73% of financial institutions are using AI for fraud detection now – and it’s resulted in a 40-60% reduction in fraud losses. So, we know this works.   The take home message here is that high-risk businesses need to be moving from reactive to proactive on fraud prevention – and that means implementing some solid multi-layered defence strategies that combine AI-powered detection, PCI-DSS 4.0 compliance, enhanced Know Your Customer (KYC) procedures, and all that good stuff.   And I should mention, you’re going to need to be right on top of the evolving threats like deepfake scams and synthetic identity fraud – which is all the more reason to get in with 2Accept. We’ve got a deep understanding of the high-risk industry’s biggest challenges, and we’ll be with you every step of the way.   And last but not least, all this is a moving target, so continuous adaptation is what you need to stay ahead of the game – keep updating those fraud prevention protocols based on emerging threats, keep your regulatory compliance up to date, and partner with a provider like 2Accept who knows the ins and outs of high-risk industry challenges.