Credit card fraud is a sharp practice that cannot be completely eliminated, but it must be managed. While there are a host of security measures for today’s consumer to follow to avoid credit card fraud, merchants also need to ensure the safety of customers’ data against the activities of hackers, identity thieves, and even costly chargebacks.
Here are 10 savvy measures online merchants can apply to manage today’s payment processing needs and avoid credit card fraud:
Adhere to the Best Practices
One of the best ways to prevent credit card fraud is to stick to the best merchant business practices. Follow the regulations as recommended by your payment processor – do not accept an expired or counterfeit card, only make payment processing once, and only grand cancellations and credit when a customer asks.
Comply With PCI DSS Standards
Ensure your payment processing system is adheres to PCI DSS standards. This is especially important in today’s vulnerable financial system as it offers better protection of consumers’ information and security for your business.
Carefully Examine Online Transactions
For online transactions processed through a payment processor, in which you cannot physically examine the card, you can still take steps to ensure the card is not stolen or fraudulent. Be wary of purchasers who create multiple orders on a single card but ship to several unique addresses, as this might be fraudulent. In addition, you must be ware different credit card numbers are entered from a specific IP address.
Request Credit Verification Value Information (CVV)
Also known as card verification code or card verification value code, CVV is a security feature that helps to protect a payment process from hackers who make use of credit card numbers generated from security breaches and fraudulent activities. By collecting the CVV information (a three-or-four-digit code in front or behind the card), merchants can verify if the purchaser actually has the credit card in hand.
Validate Orders
If you are suspicious of the activity surrounding an order, you can call the client or send a letter to the client’s billing address with questions only they can answer. It is important that you do not reach out to the shipping address given as a fraudster may be behind the scheme.
Monitor the Processing of Digital Goods
Digital services are usually vulnerable to fraud, and an online merchant may be penalized with a chargeback. Consider using electronic signatures to validate a customer’s agreement to specific terms concerning the purchasing item. You may even use the text messaging system, sending your clients confirmation code to be sure their account information is correct.
Attend to Requests Promptly
If a customer is dissatisfied with your service and requests a refund or cancellation, ensure you grant the request whenever possible. Responsive customer support service builds your reputation as it assures potential clients that you will handle their experience professionally instead of having to file for a chargeback with their financial institution.
Address Verification Service (AVS)
AVS is an automated credit card processing program which allows merchants include the billing address of a cardholder and their ZIP code in the authorization request. This added security layer minimizes the risks retailers face in card-not-present sales, ensuring that the individual making a purchase is same person that receives the card’s monthly billing statement.
Use a Blacklist
It would be wise to work with your chip card to create a blacklist. This no-sell list can help prevent fraudulent persons from taking advantage of a merchant’s business.
Produce a Whitelist
As well as taking note of fraudulent criminals, do well to support the loyal customers who do not engage in fraud. Create a whitelist featuring clients known for fraud-free purchases.
About The Author
Mark Sands, co-founder of High Risk Merchant Account LLC, an authoritative expert in the high risk merchant services space. Mark has decades of experience in the payment industry & enjoys writing on entrepreneurial related topics.