Real-Time Payments Risk: Accept or Decline, With Immediate Mitigations

Scenario

Two new card transactions arrive, and you must decide in real time whether to accept or decline each. Each transaction has attributes such as:

• Amount
• Issuing country (BIN country)
• IP geolocation / shipping country
• Device fingerprint (new vs seen before)
• Account age and user history
• Historical fraud rates by country/device
• Card age (time since first seen)

If specific values are not provided, you may assume two representative examples (one likely low-risk, one likely high-risk) to make your reasoning concrete.

Task

1. Walk through your decision process for each of the two transactions (state the key signals, how you weigh them, and your final accept/decline decision).
2. List at least three simple, immediate risk strategies you would deploy (e.g., rules, throttling, manual review) and explain how you would set thresholds.
3. Explain trade-offs between false positives (blocking good users) and chargebacks (letting fraud through), including how you’d validate and A/B test new rules.

Hints

• Discuss risk factors, cost/benefit, threshold setting, velocity checks, user history, and A/B testing of rules.