What are EFWs (early fraud warnings)?

Early fraud warnings (EFWs) are crucial tools in the payment processing ecosystem, particularly in the context of risk management and fraud detection. They are specifically generated by card issuers to flag potentially fraudulent payments before the transaction is fully processed. This early detection helps in reducing the risk of financial losses not only for the merchants but also for consumers and financial institutions.

By identifying suspicious transactions at an early stage, EFWs allow merchants to take proactive measures such as reviewing orders or requiring additional verification from customers. This can enhance the overall security of online transactions and improve the trustworthiness of the payment system.

This option accurately captures the essence of what EFWs are designed to do, which is to alert businesses about transactions that may involve fraudulent activity, thereby enabling timely intervention. The emphasis on card issuers plays a significant role, as they are responsible for monitoring transactions and protecting the integrity of the card network, which is a critical aspect of transaction security.