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What Is Payment Screening? How Many Types? And Why Is It Vital?

What Is Payment Screening? How Many Types? And Why Is It Vital?

The ultimate goal of payment screening is to protect organizations from fraudulent payments and ensure the safety and security of their customer's transactions. Therefore, lots of financial companies invest in the payment screening process. 

However, it can still be a mystery to some people who don’t work in this field. In this article, our DNBC Financial Group will guide you with the definition, the classification of payment screening, and the reasons why it is vital to businesses. 

What Is Payment Screening? How Many Types? And Why Is It Vital?

What Is Payment Screening? How Many Types? And Why Is It Vital?

What is payment screening in banking? 

The term "payment screening" refers to the procedure of checking funds and determining whether or not there is any danger involved. This method is frequently employed in the financial and e-commerce sectors to check that all transactions are genuine and prevent any fraudulent activities.

The customer's payment history, credit score, and other pertinent information are often reviewed during the payment screening process. Before approving a transaction, an online store could verify a customer's payment information or bank account.

Different types of payment screening

Several types of payment screening are implemented in organizations, including manual screening, automated screening, and transaction analysis. 

  • Manual screening: Each and every transaction is checked for its legality and accuracy by hand.
  • Automated screening: Use algorithms to identify potentially fraudulent activities. 
  • Transaction analysis: Utilize past interactions to spot potential red flags for misuse of funds.

The importance of payment screening in the financial industry

Throughout the last few years, payment screening has become increasingly important in the financial sector. The screening of incoming funds is a crucial method for identifying suspicious transactions and preventing losses for financial organizations. Its other functions include the detection of potentially illegal activities including money laundering and the funding of terrorist organizations through the tracking of suspicious individuals and transactions.

Incoming payments are screened by comparing them to a list of known bad actors, such as blacklisted accounts, sanctioned nations, and high-risk corporations. As a means of identifying potentially fraudulent operations, this also involves verifying the legitimacy of the payment's source and the flow of the transaction.

Payment screening may do more than just assist businesses spot fraud; it can also provide useful information about their clientele. Companies can learn more about their customers' risk preferences and financial situations by evaluating collected consumer data. The data collected can be used to enhance risk mitigation and customer service initiatives.

In addition, the Payment Card Industry Data Security Standard and other international requirements and standards can be more easily met with the use of payment screening (PCI DSS). Businesses must comply with these requirements, and regular payment screenings can help shield them from the risks of not doing so.

Payment screening, in general, is a very important instrument for the banking sector. It aids businesses in identifying fraudulent activity, creating a plan to stop it, gauging the safety of their customers, and meeting global standards. In order to protect themselves against potentially catastrophic financial losses, businesses should develop payment screening procedures.

About DNBC Financial Group

DNBC Financial Group is an up-and-coming leader in the financial technology industry. Since 2017, it has provided comprehensive solutions for receiving payments, transferring funds, and monitoring these processes. 

DNBC Financial Group currently has an increasing number of users globally and has become one of the most optimal providers in the world.

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