Set Thresholds for the Risk Score

The risk score is a signal as to whether an online transaction is risky for your business. Determining the thresholds you set for different actions requires fine tuning over time. We recommend first considering the cost of fraud and potentially lost goods or services, the cost of manual review, and the cost of rejecting good transactions. The risk strategy relevant to your business may mean more or less tolerance for risk as you begin using the risk score.

One possible strategy is to at first only automatically accept transactions under a low risk score (e.g., 5.00), only automatically reject orders above a high risk score (e.g., 50.00), and manually review all other transactions. After monitoring the risk scores received for the manually reviewed transactions, you can adjust the thresholds appropriately to reduce the amount of manual review required. Learn more about setting a disposition for transactions based on the risk score and other values.

Below is the chance that a risk score will be greater than or equal to given values based on a snapshot of the risk score distribution across all minFraud users generated in April 2024. For example, the chart below shows that there's about a 20% chance that a risk score will be greater than or equal to 1.

Please note that risk score distribution across all users will change over time, and risk score distribution varies from user to user. Ultimately, you should analyze the distribution of your own risk scores along with an analysis of fraudulent transactions and an estimate of the cost of false negatives to set your own thresholds.

Value Probability  
0.2+ 43% Chance that Risk Score is ≥ Value.png
This graph approximates the probability that a transaction will have a risk score of at least the values on the horizontal axis. Most transactions should have a risk score of 0.2 or lower.
1+ 20%
2+ 14%
5+ 9%
10+ 7%
50+ 3%
95+ 1%

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