The Dangers Present with Online Merchant Accounts
Credit card fraud can do a lot of damage to a business, making them liable for chargebacks and large fines. Also, if there is over a certain level of reported fraud, it could lead to the closure of the merchant account. It is important to have security measures in place to reduce credit card fraud. This is especially important if a business functions either partially or completely through online merchant accounts. Card-not-present transactions offer a unique range of problems since people who steal credit card numbers will usually try to use the cards online to make fraudulent purchases.
Take Precautions with Online Merchant Accounts
There are many red flags that are important to watch out for to protect against fraud. The first is to be wary when the billing and shipping addresses differ. It could mean that the items are a gift, but with a large purchase, especially one that involves expedited shipping, it is smart to take additional verification steps, such as requesting a copy of the customers driver’s license or a fax of the front and back of their credit card.
Another tip is to watch out for is when IP locations and credit card addresses don’t match up. This is especially true when 1 IP address is overseas. The business owner can research this at a site like IP-Lookup.net. There is a payment processor that can capture the IP address of the customer via an emailed receipt enabled with remote signature capture.
If there is a large order going to a particular address, do some research to verify whether or not it is a legitimate address. Use Google maps, Zillow, or a service called ZabaSearch to see if a person actually lives where they claim to. A little detective work could save a business a lot of money.
A technique that many scammers will use is to input many different random credit card numbers into a business’s credit card system on a single day for different transactions. Set up the credit card processing system to keep a log when this happens. Many processors will also allow businesses to review your batch transactions for the day. If one customer is using multiple cards, flag them.
Something similar yet different that scammers will also try is generating random credit card numbers until they find one that works. Since businesses can incur fees for declined transactions and this is such a common technique with fraudulent cards, restrict or monitor the number of attempted transactions.
Another wise tip is to always require the security code (CVC Code). Many times scammers steal a card’s magnetic strip but don’t have the right security code. This will prevent these types of fraudulent transactions from going through.
Getting Help with Online Merchant Accounts
Another tip is that if the type of business is at a greater risk for fraud or if there has been problems with fraud in the past, it would be wise to enlist help. There are fraud profiling service such as MaxMind or Volusion. These offer more intensive services that cross reference IP addresses, names, and more.
Another thing to consider is the security of the entire website. Many cyber attacks have been occurring recently against small business websites because they are considered easier targets than larger corporations. It is also important for a business to be PCI-compliant, both their website and any services, such as shopping carts, that they use.
A great example of merchant services company that provides businesses with excellent security with their online merchant accounts is PayJunction. They remotely capture IP addresses for verification, have various fields for data collection during a transaction that are able to be customized, offer AVS, CVC verification, and much more.