Card Testing Attacks Are Rising: What it Means for Merchant Portfolios

TL;DR Summary

• Card testing attacks, a type of fraud that uses automated tools to test stolen card data through large volumes of small attempted transactions, is a top five cyberthreat worldwide. 

• Fraud losses aren’t limited to fees, refunds, and customer churn for merchants. Payment providers also experience loss through financial compensation, fees, churn, and increased operational support during a fraud event. 

• Streamlining the merchant experience during fraud can reduce merchant frustration and support costs.

• Card Testing Coverage is another tool for payment providers to mitigate the financial burden of a fraud event while creating a revenue-stream. 

More Than Fraud: The Back Office Cost of Card Testing Attacks

Merchants often struggle after card testing attacks with unexpected fees, fraud losses, refund pressure, and potential long-term reputational harm. The operational confusion during large-scale attacks, in particular, is distressing and costly. 

But payment providers know the true expenses of these large-scale fraud attacks, because ISOs, acquirers, and other platforms face similar challenges. Each customer service escalation during these attacks multiplies the overall cost of handling a fraud attempt. For example, the price tag of a support interaction increases 9x by the third interaction. 

Payment providers must also deal with financial concessions and refund demands from merchants. Some offer financial support to rebuild trust and avoid merchant churn. 

However, this approach is largely reactive and reviewed on a case-by-case basis. The lack of standardization means each fraud attack requires a labor-intensive, sluggish process to review the issue, resolve fraud claims, and release potential compensation. 

Strategies to standardize and support the merchant experience can also cut costs and strengthen merchant loyalty. 

Upgrading the Merchant Experience

A sound, efficient card testing program gives payment providers and their merchants stronger safeguards against these massive fraud attacks. Combined with a stellar merchant support solution, you can reduce confusion and strengthen security. 

These are typically the top options for payment providers seeking to streamline their card testing attack and general fraud process. A third option offers both a loyalty and revenue-generating opportunity: Coverage. 

Card Testing Coverage helps payment providers offer merchants a more structured response for covered fraud events. Instead of handling each event through a one-off review process, providers can leverage a clear path for support, eligibility review, and eligible cost support.  

This works in a few ways:

• Providing a standardized, structured approach to accelerate support handling

• Reducing reactive support strain

• Creating a clearer process for covered event review

• Offering merchants added financial protection for eligible costs

Helping Merchants Mitigate Card Testing Attacks

Merchants may not have the IT or technical knowledge to fully understand how card testing attacks work or what it takes to resolve the issue. 

Payment providers can warn merchants preemptively about potential signs of fraud so they can act quickly. Symptoms to watch for are:

• Sudden spikes in failed or declined payment rates

• Tiny transactions that are a dollar or less, especially en-masse

• Repeated attempts to test a card from the same computer, device, or IP

Adding CAPTCHA, transaction velocity controls, AVS, and CVV checks may help reduce exposure to automated card testing, depending on the merchant’s checkout flow and fraud settings. 

Educating merchants on these tools and what to do if they suspect a card-testing attack is key to effective implementation. If merchants know what to expect during an attack, they will be better prepared to handle the complexity and frustration. They will also trust their payment provider more, strengthening your retention rates. 

Streamlined Coverage with Aperia Compliance

One of the biggest challenges for payment provider support during a card testing event is the lack of a standardized coverage process. Without a defined program, teams may handle merchant questions, financial concessions, and fraud-related cost decisions on a case-by-case basis.

Card Testing Coverage from Aperia Compliance gives payment providers a structured way to offer financial protection for eligible costs tied to covered card testing events. Instead of relying on one-off decisions, payment providers can offer merchants a clearer, more consistent coverage option.

Aperia Compliance’s approach to Card Testing Coverage helps payment providers:

• Offer financial protection for eligible costs tied to covered card testing events

• Replace one-off concessions with a standardized coverage process

• Create a clearer path for reviewing covered event eligibility

• Strengthen merchant trust with a defined protection option

• Add a revenue-generating coverage service to their merchant program

Conclusion: Turn Liabilities Into Growth

Fraud is challenging for all parties involved. It is an emotional experience, making the losses even more frustrating. The right combination of support and coverage can reduce merchant strain, boost loyalty, and create a revenue channel for payment providers. 

Is Aperia Compliance’s Card Testing Coverage right for you? Contact our team today!