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 merchantA business that accepts credit cards for goods or services.. 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
- ChargebackThe act of reversing a sale made by the merchant. This can happen for many reasons including procedural and fraud. The process usually begins with a dispute from the cardholder. 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 cartA software program used for Internet websites. The shopping cart totals up orders, tax, add shipping costs and transmit information to the merchant’s payment gateway in order to process the sale. 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 SSLSecure Socket Layer. A method of encryptions to secure information traveling over the Internet. SSL is now the predominant security protocol for online transactions. Messages between the merchant’s server and the consumer’s browser are automatically encrypted (scrambled) when sent and then decrypted (unscrambled) when received.... 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.
Note: Keep a record of declined transactions as well. Credit card issuers have their own security protocols and monitoring tools they use to determine if a transaction looks suspicious or not. If it looks suspicious to them, it should be a concern for you as well. Multiple declined transactions from the same individual can be a clear sign of stolen credit card information.
- 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 VerificationA service provided in which the seller verifies the cardholder’s address with the Issuing Bank. Address Verification does not guarantee that a transaction is valid. The codes are as follows: Y – Exact Match – Street and zip code match A – Partial Match – Street matches, zip does not Z – Partial Match – Zip code match, address does not match N – No Match – Nothing matches U – Unavailable – Information is unavailable R – Retry – Issuer auth system is unavailable, retry later... Service (AVS) which helps to verify billing address information in real-time. If the address doesn’t matchSystem used to track merchants in order to manage risk. what is on file with the credit card issuerA bank that issues credit cards to consumers., the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... 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 CVVCard Verification Value Service is used by Visa and is a three digit security number indent printed on the back of Visa cards to help validate two things: that the customer has a genuine visa card in their possession and that the card account is legitimate.... 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 matchSystem used to track merchants in order to manage risk.. If they are vastly different, it would be wise to flag that transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... and account holder for further investigation.
- Use an eCommerce Fraud Prevention Service
Working with a merchantA business that accepts credit cards for goods or services. 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 MIDA number that numerically identifies each merchant to the merchant processor for accounting and billing purposes. 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 MerchantA business that accepts credit cards for goods or services. 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 TransactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... 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 merchantA business that accepts credit cards for goods or services. account providers enable you to set a limit per individual customer. This function can be especially useful for safeguarding against flagged account holders.
NMA is a merchantA business that accepts credit cards for goods or services. 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.