How to Protect Your Business from Credit Card Frauds?
Posted on April 25, 2022 in Credit Cards
Credit card fraud is rising tremendously as the world shifts to cashless transactions and relies increasingly on plastic cards. Credit card fraud is a danger to organizations, particularly online and e-commerce enterprises. If you are one of them, don’t wait for it to disrupt your business. Start taking preventative measures. Watch out for warning signs and devise an effective security measure. Read on to learn about our top ways how to protect your business from credit card fraud.
Protect Your Business From Credit Card Frauds
Does your business accept credit card transactions? Then it may suffer a loss from credit card fraud. If your company supports online card-not-present purchases, fraud is more prevalent. I know that such a possibility might not have crossed your mind. But now, when it has come to your attention, don’t ignore it. Luckily, here’s a quick guide to assist you in protecting your company against credit card fraud.
Strong Customer Authentication (SCA)
Suppose your business is a classic brick-and-mortar system or a hybrid online and offline operations model that accepts physical credit cards. In that case, implementing strong customer authentication is a must.
SCA necessitates the use of extra security layers. You must demand three things from customers:
- Their belongings (mobile phone/plastic card)
- Confidential info (unique password/pin)
- Identification verification (biometrics such as facial recognition or fingerprints)
Such an additional layer of security protects your business when someone is making purchases from a stolen credit card. You should, therefore, set up a robust customer authentication protocol for your company. For SCA, approach industry experts such as AU10TIX. At AU10TIX, they serve with scalable, quick, and responsive biometric solutions helping you minimize the risk of credit card fraud.
CVV2 and dCCV2 Codes
A CVV2 code is a three-digit code on the back of a credit card. It is an additional security measure. It helps combat online credit card scams. CVV2 codes restrict online merchants like you from accepting credit card payments whose information has been stolen via security breaches.
Sadly, hackers can steal CVV2 code too from the databases. You, therefore, can’t store the CVV2 code and use it as protection. But you may resort to dynamic CCV2 code. dCCV2 codes fight the CCV2 frauds.
Visa issues a new dCVV2 code each time a cardholder makes a transaction through the Visa app. Your customer will request a dCVV2 code through the app while making an online purchase with you. The app cross-checks the cardholder information and dCVV2 and, upon verification, discards the code.
God forbid, but what if, despite all precautions, a crook hacks your database and steals your customers’ personal information? You would then be required to inform each consumer personally.
Moreover, you will have to offer free credit monitoring services for an entire year. Your company will incur significant financial losses, and you will be stuck with endless procedures.
If you think that your standard business insurance will protect you against this, you are mistaken. It’s not going to help. Instead, purchase cyber-security insurance and let it cover any financial losses and your legwork.
Mastercard’s’ Ethoca Program and Visa’s Order Insights
If a consumer receives an incomplete or defective product, he or she may seek a chargeback. Upon claiming, the credit card company makes a refund while charging the merchant the refund amount plus a penalty of up to 300 percent.
Although chargeback protects buyers, some customers misuse it. They claim chargebacks just for the sake of convenience. Worst of all, because it is an internet scam, you as a merchant will be unable to detect it. But there is a way out.
Mastercard’s Ethoca program and Visa’s Order Insights assist you in fighting and averting chargebacks. It can help you dispute even significant chargebacks if you believe they are illegitimate. Participate in those and educate yourself on your chargeback rights as a merchant.
You must undertake such precautions if you want your firm to thrive. Businesses like the Korean eatery Spoon by H have been an easy target for chargeback fraud. It was so severe that it had to shut down.
Here are some extra precautions to protect your company against credit card fraud.
- Look for unusual buying patterns: When you find the same card used at multiple places or multiple cards at one location, be skeptical.
- Spending limits for new customers: Setting a spending restriction does not entirely prevent fraud. You will, however, lessen its severity. It’s useful when a thief uses a stolen card to make a transaction.
- Look for return patterns from past customers: Investigate if you find a consumer requesting refunds more frequently than is reasonable.
- Fight chargebacks beyond $25, ask customers to return defective products, have all paperwork prepared, and request that your shipping partner snap a photo of the finished delivery as proof.
Conclusion on How to Protect Your Business From Credit Card Fraud
Follow through on everything mentioned in this guide, and you will save your company a lot of time and money. That’s all there is to avoid credit card theft for businesses and e-commerce sites. I hope your business never encounters a problem like this, but you’ll know what to do if it does.
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