My Merchant Account Blog

Vetting the Transaction - GeoIP

Thursday, January 07, 2010

One of the better known services is MaxMind. They offer Geographical IP address location checking. This service looks at the IP address of the transaction to see if it matches the billing ZIP code (or how far away it might be). If the IP address does not match the country, the transaction might be fraudulent.

Of course, there is always a reason the country might not match the billing ZIP code. For example, a United States consumer is on vacation in Mexico for the winter. He places an order on your website and the GeoIP comes back as mismatched. Even if the product is less than $10.00, the merchant still needs to scrub the transaction even more. The merchant is subject is a chargeback (Fraud Codes for Chargebacks) while also increasing his Chargeback Ratio.

The Quantum Gateway is one of the few electronic payment gateways offering the MaxMind GeoIP built into the system - helping to decrease development time. It also does not charge for this feature, saving the merchant even more money while comparing these services to the "big boys".