Today’s ever-advancing technology has paved the way for lucrative eCommerce businesses in a multitude of industries to easily conduct online sales locally, nationally, and internationally. However, this same technology has enabled hackers, identity thieves, and cybercriminals to engage in fraudulent activities, costing these companies over 35 billion globally each year. Experts predict that number to rise and are encouraging businesses to utilize an eCommerce fraud protection service to help minimize the risk.
However, eCommerce fraud protection can start with you, the merchant. By practicing a few common sense eCommerce fraud protection protocols regularly, you can vastly reduce the risk of fraud, potentially saving your business thousands each year.
ECommerce Fraud Protection: Best Practices
There are many varieties of eCommerce fraud. These include:
- Credit card fraud
- Chargeback Fraud
- Package Interception Fraud
- Account Takeovers
- Affiliate Fraud
Depending upon your type of eCommerce business, you could be subject to some or all of these. Regardless, it is highly recommended that all eCommerce merchants take a number of necessary steps to ensure that all the bases are covered.
- Audit Your Site’s Securit
Many cybercriminals and fraudsters rely on security flaws in your website, network servers, shopping cart software, and essentially anything else connected to your eCommerce site that might allow them unauthorized access. You can eliminate much of this risk by making sure all software and hardware are up-to-date. Additionally, the following security measures for your site and network are also important:
- Keep your SSL certificate current and working
- Ensure your ecommerce store is PCI-DSS compliant
- Remove inactive or outdated plugins
- Use strong passwords for your accounts
- Backup your online store database
- Use encryption software to keep communication between your store and vendors or customers private
- Keep an Eye on Customer Payments
Another important step in eCommerce fraud protection is keeping an eye out for red flags in your customer payment history. Doing so can alert you to suspicious activity and prevent further instances or attempts at fraud. Examples of red flags include inconsistencies in shipping and billing info, IP addresses logged from foreign countries, or even just an odd assortment of large purchases or multiple purchases of the same item. A very small purchase followed very shortly thereafter by a larger purchase could also be an indicator of fraud where the fraudster is first attempting a test of your security.
- Watch for Multiple Accounts Under One Individual Name
This could indicate an occurrence of identity theft or stolen credit card information. The cybercriminal or fraudster may have opened another account under the individual’s name using their stolen information.
- Always Confirm the Legitimacy of Transactions
Use eCommerce fraud protection tools such as an Address Verification Service (AVS) which helps to verify billing address information in real-time. If the address doesn’t match what is on file with the credit card issuer, the transaction is usually declined or flagged for further investigation by the issuing bank.
Requiring Card Verification Value (CVV) for all transactions also helps to mitigate fraud. The CVV is the 3 or 4-digit code on the back of credit cards and debit cards. Fraudsters who manage to acquire stolen credit card information often don’t have this code because they don’t have the actual card in their possession, and will be unable to purchase from your eCommerce site without it.
Lastly, you can confirm that the credit card address and the IP address location also match. If they are vastly different, it would be wise to flag that transaction and account holder for further investigation.
- Use an eCommerce Fraud Prevention Service
Working with a merchant account provider that offers next-generation account protection can make a huge, positive difference in how much fraud affects your eCommerce business. For example, Fraud Wrangler is a revolutionary platform that was designed to forecast, prevent, and combat chargebacks, one of the most frequent forms of eCommerce fraud.
Far from just providing alerts like other systems, Fraud Wrangler is an automated, AI-enabled MID lifespan protection system. Using proprietary machine-learning technology, Fraud Wrangler provides instant, automated decision-making that heads off chargebacks before they occur. In addition, Fraud Wrangler provides a single dashboard to integrate between your alert platforms, CRM, and order analytics to help you get the “full picture” of your MIDs anytime and immediately take action from one console to handle chargebacks and alerts.
- Work With a Merchant Account Provider that Works for You
NMA is proud to partner with Fraud Wrangler to offer an unprecedented level of account protection. With a strong dedication to both online eCommerce security and a level of client-focused service designed to help you achieve your goals, NMA combines industry expertise with personalized service to create a positive impact for your business.
- Set Transaction Limits
Setting limits on how much a customer can spend in a single day, or how many transactions they can make in a single day, can also be a deterrent against fraud. You may not want to set the limit universally, but many merchant account providers enable you to set a limit per individual customer. This function can be especially useful for safeguarding against flagged account holders.
About NMA
NMA is a merchant advocacy group dedicated to reducing or eliminating the unnecessary fees associated with accepting credit card payments. Since 2004, NMA’s payment processing solutions have been delivering tailored solutions, best-in-class customer service, and high-quality service offerings for businesses across multiple industries. Whether it’s high-risk or low-risk, brick-and-mortar or eCommerce, NMA will create the best processing experience for your company. For more information, visit us at our www.nationalmerchants.com or by calling (866) 509-7199.