PayPal advanced fraud detection rollout

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There’s good news from PayPal this morning, they about to start testing advanced fraud detection.

Too often in the past sellers receive a payment, they ship the goods and 24-48 hours later receive an email from PayPal stating that the payment is under review. The email always requests that the goods are held if they’re not already shipped, but by then it’s too late. Sellers do their utmost to ship goods to buyers as quickly as possible and in the past the warning emails have always arrived after the goods have been shipped.

Now PayPal are introducing Payment Review, and it’s automatic – there’s no need for sellers to sign up to the process. When PayPal’s system flags a transaction as high risk they’ll send the seller an email within minutes instead of days. The payment will be marked as pending with the investigation typically taking 24 hours to complete. At that stage either the funds will be fully released to the seller and they’ll be covered under seller protection or the transation will be cancelled.

This is not something sellers will see very often, it’s rare that transactions are investigated and it only happens in a tiny number of transactions overall. The early warning within minutes is essential and sellers will welcome the news. The downside is that currently testing will start with small number of US and Canadian transactions in the short term which will increase over the next few months and only roll out worldwide at some point in the future.

Scot Wingo on his blog wasn’t too complimentary about PayPal releasing this in the run up to Christmas. Personally I’d be more than happy for PayPal to test this in the UK instead of the US, rather than continue receiving the dreaded “Don’t ship this item” email the day after the courier delivered the product!

One Response

  1. Interesting !

    AuctionChex had an incoming Paypal last week, almost at the same time as the normal notifiction email I got an ‘under review’ email also – which was spot one!

    The payment sender had created multiple ‘chex transactions, which we had flagged anyway, but this was the one and only payment sent.

    Maybe they (Paypal) were just testing ?


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