July 19, 2025
At Cardstream, we work with our Partners and Merchants to help them stay ahead of these risks. Below, we explore some of the most common types of fraud in the payments space, what they mean for your business, and how you can reduce your exposure.
Phishing: Still a Major Threat
Phishing emails and text messages remain one of the most effective tools in a fraudster’s arsenal. These attacks often impersonate legitimate organisations, including payment providers, banks, or even internal departments, and aim to trick individuals into revealing sensitive information, such as login credentials or card details.
Successful phishing attacks can result in unauthorised account access, data breaches, and fraudulent transactions, sometimes without the victim even realising until it’s too late.
Card Fraud in a Digital World
Card-not-present (CNP) fraud continues to rise, especially with the growth of e-commerce. Criminals use stolen card data to make purchases online or by phone, where physical cards aren’t needed. Other types of card fraud include skimming, where data is captured from compromised terminals, and social engineering, where someone is manipulated into revealing sensitive information.
The result is financial losses, chargebacks, and reputational damage for Partners, Merchants and payment providers alike.
Additional Threats to Watch
Fraud is no longer limited to a handful of known tactics. Attackers are increasingly turning to automated and technical methods to exploit vulnerabilities.
Credential stuffing utilises previously leaked usernames and passwords to attempt to access systems where users may have reused their login details.
Malware and keyloggers can be installed on compromised devices to silently record keystrokes, capturing card numbers, passwords, and other personal information.
Man-in-the-middle attacks intercept data between the customer and the payment system — especially over unsecured Wi-Fi — potentially allowing fraudsters to collect card data or spoof legitimate websites.
Fake Merchant accounts are sometimes created with the sole purpose of processing stolen cards or laundering funds, placing risk on payment facilitators and acquirers.
Chargeback fraud — often called ‘friendly fraud’ happens when a customer makes a real purchase but later falsely claims it was unauthorised in order to get a refund.
Account takeover (ATO) involves a fraudster gaining control of a legitimate user or Merchant account, making changes to payment settings or initiating high-risk transactions before anyone notices.
What You Can Do to Stay Secure
While it’s impossible to remove risk entirely, there are effective ways to reduce it.
Start by enforcing strong authentication — both for customers and internal users. Use two-factor authentication and make sure 3-D Secure 2 is enabled for online transactions.
Educate your teams on how to spot phishing emails, suspicious links, and abnormal Merchant behaviour. Keeping software, plugins, and platforms up to date is also crucial — many attackers exploit outdated systems to gain access.
Monitoring transactions for unusual activity and working with PCI DSS-compliant payment partners further strengthens your defence.
How Cardstream Helps Protect You and Your Merchants
Security is central to our platform. At Cardstream, we provide our Partners with a robust suite of tools to help manage fraud risks while still delivering a seamless payment experience.
We support tokenisation, ensuring that sensitive card data is replaced with secure tokens to reduce the risk of exposure. Our platform supports 3-D Secure 2, providing enhanced protection against CNP fraud by verifying customer authentication before transactions are processed.
Partners have access to real-time transaction monitoring, with configurable risk rules and routing options to flag or block suspicious behaviour. Our Merchant onboarding tools include thorough KYC and KYB processes, helping to ensure that only legitimate businesses are accepted into your ecosystem.
To further enhance fraud prevention capabilities, Cardstream has partnered with Kount, a leading provider of AI-driven fraud protection. This integration enables our Partners to leverage powerful identity trust signals, dynamic risk scoring, and adaptive authentication strategies to help stop fraud before it happens. For more information, please contact your Relationship Manager.
All of this is underpinned by secure, encrypted APIs and hosted payment pages.
Let’s Keep Payments Safe — Together
Fraud prevention isn’t just a technical challenge — it’s a shared responsibility. By working together, staying alert, and using the right tools, we can stay one step ahead of fraudsters and build safer payment experiences for everyone.
If you have any questions or want to explore how Cardstream’s tools can further strengthen your fraud prevention efforts, please don’t hesitate to reach out to your Relationship Manager or our Support Team.
