How to Protect Your Business from Credit Card Fraud
FBI defines credit card fraud use of a debit or credit card or other payment tool such as EFT and ACH to obtain goods or money without the approval of the owner.
More often than not, this form of fraud is closely related to identity theft.
Research indicates that cases of theft of private data double between 2010 and 2015 while credit card related fraud reached an all-time high in 2016. More than 16 million dollars were lost.
As a business owner, you need to have a constant flow of income to support your operating costs.
Here are simple tips on how to cushion your business from credit card fraud.
Use Point-of-Purchase Programs
Point-of-purchase programs such as MasterCard SecureCode and Verified by Visa have proven to be good in cushion companies from fraud.
They will help you to confirm the identity of the client who uses the card to pay for a service or goods.
Add one more layer of protection by taking advantage of your payment processor’s Address Verification Service (AVS).
As the name suggests, this service checks if the card user’s address and other details match with the bank’s records.
You can choose to decline the card if the details don’t match.
Take Advantage of EMV Chip Cards
EMV is a global standard used for credit card and chip-based debit card payments.
Most of the nations that have embraced EMV have low credit fraud cases compared to countries that do not use EMV.
EMV chip cards will not only be protecting your business from credit card fraud but also protecting your clients’ information and avoiding blame.
Create a Blueprint for Payments
Create a process or steps that all employees should follow when dealing with card payments. Below are steps that you can incorporate in your business.
- Check the customer ID to be sure that the details on the credit card match those printed on the identification card.
- Check the credit card for flaws such as rubbing off of digits or letters.
- Make use of Address Verification Service (AVS) to confirm the billing address. You can advise the employees to decline cards whose billing does not match the bank details.
- Compare the details printed on the receipt with the card details to be sure that they match. Check the last four digits of the account number and sign on the card and the receipt.
Be More Careful When Accepting Online Payments
Well, EMV payment reduces in-person credit card fraud, but it doesn’t address online fraud. Note that card-not-present payments account for 45% of all card usage.
Based on these facts, you need to be more careful when accepting online payments.
Here are some warning signs that you should look out for.
- Orders with “big ticket” items that have high resale value in the market
- Orders that include same items when it’s not likely that clients buy the items at the same time
- Different purchases from the same IP address on the same day
- International order from a country that you don’t market your products in
- Same cards with more than one shipping place but one billing address
- Items that are shipping to the same address, but purchased using more than one credit cards
Stay Vigilant For Credit Card Fraud
Credit card fraud is one of the major challenges facing companies from across the globe. Cushion your business from it by using the above tips.
Be sure to report fraud as soon as it happens to the police and bank so that other payments that may be pending are canceled in time.