Fraud is already a complex challenge, but merchants face an additional hurdle: first-party fraud perpetrated by their own customers. Unlike second- or third-party fraud, first-party fraud occurs when consumers use their legitimate payment credentials to commit dishonest acts for personal gain. This creates a significant challenge for acquiring banks and payment service providers (PSPs) in assisting merchants with fraud prevention. To effectively support merchants, acquiring banks must develop a thorough understanding of how first-party fraud operates. This article explores how acquirers and PSPs can help merchants mitigate first-party fraud and protect their profits.

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