For payment providers, fraud prevention is becoming more than a way to protect merchants. It’s an opportunity to make your services more valuable, build stronger relationships and give merchants one less thing to worry about.
The fraud threat landscape gets more complex every year. Artificial intelligence (AI) has made it cheap and easy for fraudsters to increase the speed and scale of their attacks. Fraud-as-a-service now gives almost anyone with dark web access ready-made tools to commit fraud. As the risk rises, merchants have to adopt more complex defenses that cost more time and money than most want to spend. Many are left overwhelmed and frustrated. That’s a problem for payment providers, but it’s also an opportunity. Merchants don’t want to spend their time managing fraud tools. They want to run their businesses, protect their customers and know their payments are secure. The more of that burden you can take away, the more valuable you become.
One of the biggest issues is fragmentation. Too many merchants rely on a patchwork of fraud prevention tools that are inefficient to run and expensive to maintain. As the number of tools and vendors grows, protection often gets weaker because the systems don’t integrate or communicate well.
To keep your merchants protected while easing their operational burden, build fraud prevention into your payments ecosystem from the start rather than adding it as an afterthought. Your merchants can then treat you as a one-stop source for fraud defense that’s effective, centralized and, most importantly, easy to use.
The Problem: As Fraud Gets More Complex, So Does Fighting Back
The latest Global Payments and Fraud Report from the Merchant Risk Council, produced with Visa Acceptance Solutions and Verifi, highlights several trends in how merchants are fighting fraud in 2026:
- 43% of merchants cite fraud orchestration as a top area for improvement over the next 12 months. That’s up from 40% in 2025 and second only to improving the accuracy of AI and machine learning (ML) tools
- 62% of merchants say reducing the time spent on fraud management is a major or moderate factor in how they’ll invest over the next one to two years. More than half spend more time on fraud now than they did a year ago, and only 16% expect to spend less time in the coming year
- Merchants are pulling back from fraud monitoring. Fewer merchants monitor for fraud than a year ago at every stage of the customer journey, from checkout and payment to refund requests and disputes
- 29% of merchants now cite minimizing costs as their top fraud management priority. That’s up from 20% in 2025 and almost three times the 2024 figure (10%)
The data paints a clear picture: merchants are under pressure to fight increasingly sophisticated fraud while spending less time and money doing it. Some are also scaling back their fraud monitoring, even as the threat continues to evolve.
That creates an opening for you. Making fraud prevention simpler and more accessible isn’t just about improving security. It’s about helping merchants overcome a growing business challenge while giving them another reason to stay with you.
The Solution: Fraud Protection Without the Complexity
A big driver behind these trends is the growing number of separate fraud prevention and reporting tools merchants have to manage.
Consider a growing ecommerce merchant using one system to screen transactions, another to detect suspicious bot activity and a third for payment authentication. Each has its own dashboard, reporting and support. When something goes wrong, the merchant has to work out which system is responsible and where to turn for help.
Each tool might work well on its own, but not necessarily with the others. Data stays siloed, and getting tools to share it is difficult or impossible. Each one also needs its own configuration, monitoring and account.
The answer isn’t simply to give merchants more fraud tools. It’s to make the right protections work together, ideally as part of the payments infrastructure they already use. Many integrated fraud solutions exist, but most fall short in one of two ways:
- Fraud suites from the largest brand-name payment platforms are well orchestrated but can be rigid, offering limited flexibility for merchants with different needs
- Standalone fraud platforms are more flexible, but they sit outside the payment flow, making integration and coordination more difficult
As a payment provider, your strongest move is to offer your merchants a fraud management solution that’s comprehensive, modern, flexible and built directly into your payment services. Your merchants get several key benefits:
- More efficient sharing of payment, transaction and risk data across connected fraud tools and the payment gateway
- Simpler, centralized configuration and reporting across their fraud tools, with fewer separate systems to navigate
- A single source for technical support
- Potential cost savings from bundled services
There’s a benefit for you, too. By bringing these services together, you can offer more value without asking merchants to manage more complexity. That creates opportunities to strengthen merchant relationships, differentiate your offering and introduce additional services as merchants’ needs grow.
In my view, that’s where payment providers have the greatest opportunity. Fraud prevention shouldn’t be another product merchants have to figure out. It should be part of a payment experience that makes their lives easier.
What Does a Centralized Fraud Defense System Need to Include?
AI-Powered Screening and Risk Scoring Systems
Fraud is increasingly AI-powered, and so are the best defenses. Modern screening and risk scoring systems bring two key capabilities that traditional tools lack:
AI-Powered Risk Scoring Engines: Modern risk scoring engines use AI and ML to analyze data from billions of transactions and identify patterns that could indicate fraud. Unlike traditional systems that rely only on fixed rules, ML models adapt as new fraud patterns emerge. These systems assess transactions for potential risks, assign a risk score and help determine whether a payment should be approved, flagged for review or declined. This allows merchants to make better decisions without having to manually review every transaction.
Identity, Behavioral and Device Intelligence: AI-driven tools can flag fraud before checkout even begins. They analyze signals such as device fingerprints, customer behavior and identity information to tell human shoppers apart from automated bots. Paired with ML-powered risk scoring, this extra layer of data and analysis helps merchants tighten fraud controls while reducing false declines (when legitimate customers are turned away, sometimes called “customer insult”).
That’s an important balance. Fraud prevention needs to stop fraudulent transactions without creating unnecessary friction for genuine customers. For merchants, fewer false declines mean fewer lost sales and a better customer experience.
Network Tokenization
Replacing a customer’s primary account number with a secure digital token has long been a critical part of securing card-on-file transactions. Network tokenization takes this a step further by using tokens issued directly by the card network, such as Visa or Mastercard, rather than by the merchant’s gateway provider.
When a payment is processed using a network token, the network checks that the token is being used as intended and matches it to the underlying card number so the issuing bank can authorize the transaction. This means merchants can process payments without storing or transmitting their customers’ actual card numbers after the first transaction.
Network tokens can also be restricted to a specific merchant, device or payment scenario, making them much less useful to fraudsters if stolen. Where required, a single-use cryptogram adds another layer of security by helping verify that the token is being used legitimately. As a result, payments made with network tokens can benefit from lower fraud rates, higher approval rates and fewer false declines. Network tokens also help keep stored payment details up to date when cards expire or are replaced, making them particularly valuable for subscriptions and repeat purchases.
Centralized but Flexible Integration
Merchants need to cut the cost, complexity and time that fraud management demands. A centralized, all-in-one approach addresses all three. But there’s a catch: every merchant has unique needs and a unique tech stack. What works for a small owner-operator might not work for a midsize or large seller with a more complex ecommerce business.
Forcing every merchant into a one-size-fits-all solution recreates the rigidity that frustrates so many sellers on the largest all-in-one payment platforms. Instead, look for a solution that combines the technologies above in a single platform and lets merchants choose the tools they need to build their ideal fraud defense stack. Even better, it should recommend the right protections based on each merchant’s attack surface. That guidance matters. Fraud tools often get switched off or go unused because they’re too complex to set up, and most merchants don’t have the expertise to configure them in-house.
This flexibility matters if you serve merchants of all sizes and across industries. A small retailer may need straightforward transaction filtering, while a growing ecommerce business might benefit from AI-driven fraud detection and more advanced authentication.
With a modular approach, you can offer both without making every merchant pay for or manage capabilities they don’t need. And as their businesses grow, you can add protection without having to rebuild their payment setup.
Make Fighting Fraud Easier With the NMI Fraud Defense Suite
To help you fight modern fraud, NMI developed a comprehensive fraud defense suite that pairs advanced, end-to-end, AI-powered fraud protection with the modularity and flexibility our entire payments ecosystem is known for.
Our fraud defense suite gives your merchants a pre-orchestrated defense stack in one place, including:
- Advanced Fraud Protection powered by Kount® 360 for ML-powered risk scoring and identity, device and behavioral screening
- NMI Fraud Prevention for classic rules-based transaction filtering
- Automatic card testing detection, which shuts down attacks in real time
- Network tokenization and secure gateway tokenization through Customer Token Vault and Customer Vault
- Support for advanced transaction security protocols such as 3-D Secure
Every component is modular. Unlike with the big platforms, your merchants can turn on only the tools they need. That combination of comprehensive protection and flexibility makes you a more valuable partner in keeping your merchants secure.
Fraud prevention shouldn’t mean more complexity for merchants or more work for you. By bringing the right protections together in one flexible payment platform, you can help your merchants stay protected while making your own services more valuable. Ultimately, it’s an opportunity to turn fraud prevention from a necessary expense into another reason for merchants to choose you and stay with you.
To learn how NMI’s fraud defense tools can help your merchants catch more fraud with less effort, reach out to a member of our team today
