How to avoid fraud in credit card online payments

As long as the ecommerce is growing, cyber crime will continue to grow alongside it. Risk of fraud was always present, but now it has reached all time highs with more and more people turning to online platforms for everyday activities. It is a duty of any business owner to stay on the lookout and protect their business and their customers from fraud attempts. Cybercriminals do not discriminate between their victims, as long as they can find some financial benefits. From small to big business, from digital to physical e-commerce businesses, nobody is safe from cybercriminals.

How to avoid fraud in credit card online payments

There is just one foolproof way to protect yourself 100 percent from credit card fraud, and that is to stop accepting credit card transactions. That would mean you wouldn’t have to deal with the risk of credit card fraud but at the same time that would mean you would stop almost every payment in your business. Now, that wouldn’t be a really smart step to take in any business that depends on sales, would it? You want to take your business to the next level, and not prevent it from developing just to stay on the safe side. Luckily, there are steps you can take to minimize the risk of your business falling as a victim to credit card fraud.

What are the common types of credit card fraud?

There are few different types of credit card fraud, but most of them can be classified under the category of chargeback fraud as that is how most of them will end up. Once a legitimate credit card owner discovers a payment they don’t recognize on their credit card statement or if there were some problems with the products or service like they didn’t receive an order, they will request a chargeback with their credit card company who will then forward that dispute to the merchant.

Account takeover: With this type of fraud, fraudsters will take over your account by using the details they got through cyber attacks like phishing, malware or even social engineering attacks. After they get into the account they will take control of it and use it for their financial gain. Once the original card holder notices the problem, they will request a chargeback to try to get their assets back.

Cloned cards: Criminals will install credit card skimmers on the payment terminals or ATMs so they can get customers’ credit card numbers once they use those terminals. Customers won’t even notice their credit card was cloned and that somebody is using it until they check their credit card statement.

Card-not-present fraud: This is the most common type of ecommerce fraud since the cyber criminals don’t have to have a physical card present to complete the purchases online. They just need to get access to confidential details like your name, credit card number, expiry day and  the card’s security code.

End result for these types of fraud would be financial loss for merchants. Not only will they lose the cost of the purchased goods or service as it has already been shipped or delivered, shipping cost or any other cost associated with the transaction but then they will have to return the payment to the original card owner making it a more than double loss for merchants.

What can you do to mitigate the risk of credit card risk?

Be as clear as possible: By describing the item as exactly as they are you are reducing the risk of customers being disappointed by their order. Make sure everything on your website is easily understood, especially your return policy as that is your first line of defense.

Be proactive: Implement fraud management services and fraud prevention tools like behavior analysis, data enrichment, social media lookup or device fingerprinting to collect more information about your user, notice patterns and discrepancies and to use the findings to stop the fraud before it happens.

Ask CVV number for every transaction: You can significantly reduce the chances of card-not-present fraud by asking the customers for a Card Verification Value (CVV) number as this increases the possibility customers have the credit card physically present.

Be accessible: By being easily accessible to your customers you can solve issues as soon as they arise, improve their satisfaction resulting in reputational benefit for you and reduce the risk of customers requesting a chargeback.

This might seem overwhelming, but by knowing what you are fighting against and how to use all tools in your arsenal you will be able to mitigate fraud risk and protect your business.



South Florida Caribbean News

The Team provides news and information for the Caribbean-American community in South Florida and beyond.

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