In e-commerce, blacklisting refers to the system by which merchants record the personal information and transaction history of untrustworthy clients. Cards that were used or that are suspect of have been used in fraudulent transactions are compiled in a database and after having been blacklisted, they will always be subject to rejection by the system. The purpose of blacklisting is to prevent fraud. Likewise, it helps reducing financial losses.
At present, there are many fraud-screening software options in the market from which to choose. They offer the merchants the possibility of automatically blacklist/block shoppers based on the following classification: by IP address, e-mail address, credit card number, country, city or region.
In addition to having individual blacklists, merchants also have the option to join a blacklist community of merchants in which information compiled by thousands of merchants is exchanged to create a so-called master list of blacklisted individuals.