How Merchants Can Avoid Credit Card Fraud
If you operate a retail or ecommerce company, accepting all main credit cards and electronic checks is really a required approach to customer payment. Nevertheless, when you choose to accept electronic payments, business owners must also consider the potential cost of fraud. Studies have shown both conventional and online merchants have lost billions in fraudulent transactions. These days, technology offers proven methods for identifying and preventing fraudulent transactions.
Fraud can come in many forms. Obviously fraud isn't good for company. If you procedure a fraudulent customer order when you find out the credit card was stolen you've already shipped the product. Fraudulent orders generally result in a customer charge card chargeback for your company. Regrettably, by that point, you've delivered and lost your product, you have lost the income from the sale and also to top it all off; you will receive a chargeback fee out of your charge card processor. I'm certain we are able to agree there's a strong have to identify and stop a fraudulent order before you deliver your product. Fortunately for the merchant, there are many actions and processes that can be implemented to reduce and eliminate credit card scams.
10 WAYS TO Decrease CUSTOMER Credit card scams
1. Address Verification Service (AVS) - is a simple and simple to implement procedure to diminish your odds of accepting a stolen charge card. When you procedure a credit card transaction; be sure you capture the card holder's billing address and zip code. Manual non-swipe (Web and MOTO) transactions will need you to capture card holder info. Nevertheless, card present (swipe) transactions won't. When you capture the credit card holder's billing address and zipcode you're ready to procedure the sale. Your point of sale system will verify AVS with the card issuing bank. You can get a home address match only, a zip code match only or perhaps a match on home address and zipcode. If you don't obtain an AVS match you should look at declining the transaction. Approximately 80% of fraudulent transactions within the U.S. are AVS mismatches. Keep in mind, most AVS systems can be configured so make sure to check your AVS settings. Implementing AVS may have a main impact on decreasing credit card scams.
2. Card Verification (CVV/CVV2) - is comparable to AVS. CVV is the 3 digit code on the back of the charge card (4 digits for American Express). Like AVS, CVV is entered at the point of sale. The credit card holder's CVV code is verified through the card issuing bank once the charge card sale is being processed. If you don't receive a CVV match you should consider declining the transaction. On-line merchants ought to make CVV a required field.
3. Make use of a Threshold Management Service - Threshold management allows the merchant to set parameters for that transactions they will accept. For example, transactions could be screened based on the amount of money charged per transaction, the amount of transactions charged, transaction frequency, average user ticket, etc. Transactions which are marked like a potential fraudulent transaction will require extra review by the merchant. Threshold Management services are usually obtainable an add-on service.
4. Scrutinize Orders for free email accounts - Fraudsters and thieves like to hide. One of the easiest methods to cover the identity of a thief is to use a totally free email account. Most fraudulent transactions use a totally free email service. Merchants shouldn't decline all transactions from the totally free email service. Nevertheless, you might want to offer those orders with more scrutiny.
5. Scrutinize Orders with a various Ship to deal with than Bill to deal with - The thief with the stolen credit card might have owners billing address and zip code. If so, you will obtain an AVS and CVV match on their order. Nevertheless, to be able to obtain your products they will request an order to become shipped to a different address. Merchants ought to review all orders with a various ship to and bill to deal with. When the ship to deal with is a foreign country pay much more attention to the order.
6. Scrutinize International Orders / Foreign Charge cards - If your business model demands you to ship to foreign countries you need to obtain an International merchant account. Since non domestic orders possess a higher rate of fraud than domestic orders, through an International credit card merchant account provides you with a higher degree of protection. In extra, an international credit card merchant account will help you to get ready the local currency. Should you require a domestic and international credit card merchant account you need to use a payment gateway with load-balancing. Load-balancing provides the merchant having the ability to use multiple merchant services in a single payment gateway account.
7. Realize that an Authorization Code does not necessarily mean the loan card is not stolen - An authorization code is supplied once the transaction continues to be approved. Nevertheless, an authorization code only denotes the credit card is valid and it has the available credit to procedure the transaction. Ultimately, as the business proprietor, it's your decision to decide to accept or reject the transaction.
8. Use an Advance Fraud Protection Service - Advanced Fraud Protection services allow the merchant to bar transactions by IP address, Country of Origin and other fraud filters. Advanced fraud protection services are usually obtainable an add-on service.
9. Make use of a PCI Compliant Data Storage Service - Merchants who've essential to store the customer's charge card data ought to make use of a PCI Compliant Data Storage Service. A PCI Compliant Data Storage Service allows merchants to transmit and store the customer's payment info inside a Level 1 PCI certified data facility. When the customer record has been securely transmitted and stored the merchant can then initiate transactions remotely and never have to access charge card or electronic check info directly. This process is accomplished with no merchant storing the customer's payment info in their local database or payment application.
10. Review and Implement PCI (Payment Card Business Standards) Policies - Merchants can review PCI Standards on-line at pcisecuritystandards.org. If you're utilizing a PCI Compliant point of sale answer and also you do not store payment data you are already in good shape. Nevertheless, merchants ought to contact their credit card merchant account provider to learn more.
Fraud prevention is a essential activity for conventional and online merchants. Exposing your business to fraudulent transactions and high chargeback ratios isn't good for company and may cause you to lose your merchant account. The key real-time payment gateway services offer advanced fraud protection tools. Nevertheless, numerous fraud prevention methods can be implemented at no extra costs.
Top Real-time Payment Gateway Services
1. Planetauthorize (Domestic USA and International)
2. Authorize.Net (Domestic USA)
3. PlugnPay (Domestic USA)
4. Skipjack (Domestic USA)
5. eProcessing Network (Domestic USA)
Ricky Bracken is President & CEO of SaleManager Merchant Services. SaleManager offers enterprise class payment methods to small and mid-size businesses.