Credit card fraud is the unauthorized use of a credit or debit card to obtain goods or services. It’s a form of identity theft, since the person or entity making the fraudulent purchase is posing as the cardholder.
As a merchant, you can protect yourself against fraudulent in-store transactions by checking customer identification with every purchase and physically inspecting credit and debit cards for signs of tampering. Accepting EMV chip cards is another way.
But once you start selling online, you’ve entered the realm of card-not-present (CNP) transactions. These transactions are inherently risky, and they’re a major source of chargebacks for merchants.
The True Cost of Ecommerce Fraud
If you own or operate an online store, you need merchant fraud protection. Fraud not only eats into your profits, but it can also wreck your online reputation, damage your brand, and drive customers away.
As a merchant, you assume all of the risks. If you accept an online order that is later deemed fraudulent, it’s your responsibility to refund the customer. If you don’t provide a refund, the cardholder’s bank will demand payment from you on the customer’s behalf.
The true cost of a fraudulent transaction can be double that of the actual purchase. Not only are you on the hook for refunding the customer, but it’s also virtually impossible to recover merchandise that’s already been shipped.
And if dozens or hundreds of fraudulent transactions are processed at once, an acquiring bank may raise your credit card fees or even try to shut down your account. This can spell big trouble for your business.
Ecommerce Fraud Prevention Services
There are things you can do as a merchant to protect yourself from ecommerce payment fraud. Setting limits on purchases and monitoring your site for suspicious transactions are two examples. Here are some other tools:
- Address Verification Service (AVS) – AVS verifies the identity of the person making the transaction by comparing the billing address the customer provides with the address the card issuer has on file. When the addresses don’t match, the system either declines the transaction or flags it for investigation.
- PCI Compliance – PCI compliance means your online store and your business processes meet security standards set by the PCI Security Standards Council. These standards require all merchants accepting credit and debit cards to provide annual proof that they are compliant with these regulations. Adept Payments makes it easy for you to comply with all PCI mandates. Through partnerships with proven and accredited providers, we connect you to a simple process backed by knowledgeable support and proven systems.
- Card Verification Numbers – Card Verification Value (CVV) and Card Security Codes (CSC) can help protect you against fraud. These are the 3-digit or 4-digit security codes on the back of VISA®, MasterCard®, Discover®, and American Express® credit or debit cards. Always ask your customers to provide this code for online and over-the-phone transactions.
It’s vital to take steps to protect yourself from fraud. But what about your payment processor—what are they doing to protect you from fraudulent activity?
Why Choose Adept Payments?
Adept Payments is a leading credit card payment processor for small businesses. We understand how harmful payment fraud is for ecommerce merchants. We’ve formed partnerships with leading fraud prevention experts to provide you with safe, secure payment processing solutions.
When you partner with Adept Payments, you’ll have direct access to a member of our support team. We pride ourselves on providing personalized customer service delivered by experienced, reliable team members. Contact us to learn more about our payment processing fraud prevention services and secure payment gateways.