How 3Lines Blocked INR 2 Crore in Risky Payments, Smartly Avoiding Disputes

RiskShield has transformed how we manage disputes and fraud, saving us significant time and preventing revenue losses. As a business handling high transaction volumes, it has given us the confidence to operate securely and scale efficiently. It’s truly an indispensable tool for our success.

– Venkatadri Mekala, Managing Director, 3Lines

About 3Lines

3Lines Online Services Pvt. Ltd. is a Hyderabad-based tech company specializing in online services such as money transfers, bill payments, wallet services, virtual POS, micro ATMs, and more. These services are designed to help businesses start and grow.

3Lines processes over 10,00,000 transactions every month and aims to technologically empower even the remotest villages in India. This effort is facilitated by an aspirational distributor network of 10,000+ resellers.

Challenges

As 3Lines’ revenue grew, there was a corresponding increase in the number and value of disputes. This rise forced the finance team to dedicate more time and effort to contesting and resolving disputes.

• Disproportionately High Time Spent on Disputes

For each dispute case, the team had to collect evidence, wait for the bank’s response, and then wait for the dispute to be closed.

• Revenue Loss

Despite their efforts, businesses sometimes lose disputes, resulting in refunds to customers. This led to losses in service costs, payment processing fees, and potential escalation fees if an arbitrator ruled against them.

Solution

Faced with persistent disputes and increasing revenue leakage, 3Lines identified recurring fraud patterns and sought a robust solution to proactively prevent such activities. They chose RiskShield by Cashfree Payments for its comprehensive fraud prevention capabilities.

How 3Lines Leveraged RiskShield

Blocking Repeat Offenders

As 3Lines delved deep into their dispute data, they discovered some interesting patterns. There was a set of customers using similar card numbers who were raising disputes. Upon further analysis, they realized that the BIN number (the first 4-8 digits of a card that indicate the issuer, bank, card level, etc.) of these customers’ cards was the same. This led them to infer that a fraud group was attempting to cause financial harm.

3Lines took action by blocking these fraud groups using their BIN numbers. Since blocking BIN numbers is done with careful deliberation, genuine customers were not affected.

Additionally, 3Lines observed isolated cases of multiple disputes originating from transactions made with a particular card. Such customers were also blocked using the PAR number from their card.

Apart from Card BIN numbers and Card PAR numbers, the My Blacklist feature of RiskShield allows the blocking of customers using six other parameters: phone number, email ID, UPI ID, pin code, city name, IP address, and country.

Instead of directly blocking transactions, RiskShield can also be configured to flag high-risk transactions for review later, giving confidence that genuine transactions are not mistakenly blocked.

Understanding scam patterns specific to their product

The 3Lines team identified unusual patterns in bill payments, such as:

• High-value payments occurring within very short intervals.
• Multiple payments made from the same card number or UPI, but associated with different phone numbers and email addresses.

In the bill payments business, each bill is typically paid monthly. At 3Lines, they noticed that when the same email ID or phone number was used to make more than two payments in a month, the likelihood of a dispute increased, indicating potential fraudulent activity. Instead of applying blanket blocks, 3Lines utilized the Smart Rules feature on RiskShield.

With Smart Rules, only transactions following pre-specified patterns are blocked, allowing genuine transactions to proceed while risky ones are intercepted.

Risky transactions can also be flagged for review rather than being outright blocked. Additionally, Cashfree Payments recommends suggested Smart Rules based on global trends.

Examples of Smart Rules set by customers:

• Limit mobile numbers linked to a card: Don’t allow more than two mobile numbers linked with a single card number in the last 30 days. These transactions will be flagged for manual review by the finance or risk team.

• Daily transaction cap: Restrict total transaction amounts to ₹20,000 per day. If a second transaction exceeding₹20,000 occurs, it will be blocked.

Results

By leveraging the My Blacklist and Smart Rules features of RiskShield, 3Lines achieved the following results:

• 80% reduction in the number of disputes.
• 90% reduction in time spent on dispute handling.
• Increased revenue by blocking high-risk transactions.

Monthly disputes reduction by RiskShield

About RiskShield from Cashfree Payments

RiskShield by Cashfree Payments is a product integrated within the payment gateway to proactively identify and block fraudulent transactions.

Fraudulent transactions made by entities such as scammers often lead to disputes and chargebacks, causing losses in time, resources, revenue, and reputation for merchants.

RiskShield aims to reduce these losses by helping merchants avoid disputes and chargeback issues altogether.

You can set up a quick call with our Product team to learn more about the product, explore specific features, or address any general queries.

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