The globalization of e-commerce is continually creating new opportunities for businesses and consumers. Companies are taking advantage of these opportunities to improve customers’ shopping experience by providing online payment and shipping services. The emergence of digital transactions has come with many advantages, but it also creates room for transaction fraud, which costs firms a lot of charge-back fees and loss of revenue.
Transaction fraud is a big challenge especially for small enterprises that are managing e-commerce sales. Businesses face unique challenges as all purchases are made without the physical presence of the cardholder for verification purposes. As a small business owner, you can take the following steps to protect your business and customers from transaction fraud.
Take Note of Addresses
E-commerce transactions require the shopper to fill in billing and shipping addresses. The billing address is used by businesses to send bills and paperwork. The shipping address refers to the address where a buyer wished to receive the shipped goods. When dealing with online transactions, you should ascertain that the billing and shipping addresses filled by the purchaser are similar.
Most online transaction criminals provide a different billing and shipping address. If you encounter such a case, especially for a large order, always call to match the phone number to the provided details. Don’t entirely dismiss the transaction as there are legitimate customers who may be purchasing items as gifts for delivery to a different location.
Choose Quality Payment Gateway Services
A payment gateway is a system that is used for facilitating online transactions. It allows businesses to process credit cards, debit cards, and other types of payment online. Payment gateways vary in sophistication and capabilities, and online criminals can manage to manipulate poorly configured ones to generate customer information. This is prevalent in online payment systems that do not limit the number of failed transactions.
Consider investing in a reliable solution such as white label payment gateway. This solution provides real-time fraud and risk management tools to reduce losses and improve customer experience. Most fraudulent transactions are detected and declined by the system before processing. Additionally, this option allows businesses to brand the payment gateway to their specific needs.
Maintain a Log of Credit Card Numbers
A majority of transaction scammers attempt multiple transactions using different credit card numbers on a given day. You can easily identify their activity by maintaining a log of whenever a customer tries to enter a credit card number. If one customer attempts to input a number more than two or three times, the chances are that it is a fraudulent transaction. You can configure the payment gateway to decline such payments.
Similarly, beware of customers who input wrong information multiple times resulting in declined transactions. These are usually scammers who use software and vulnerable payment gateways to generate information about the credit card holder. Ban users who exceed the number of attempted transactions from making online payments.
Flag Suspicious Email Addresses
Online transaction criminals may use email accounts whose addresses are overly suspicious. These can be a dead giveaway of a fraudulent transaction, and as a business owner, it is critical for you to watch out for such. Ideally, a legit customer would type in an email address that’s related to the name on their credit card. However, if you find suspicious email addresses, for instance, dhg65234@yahoo.com for a Lydia Jones, you should decline the order.
Ask for Security Code
Credit and debit cards have a three-digit security code that’s usually printed on the back of the card. The code is not embossed on the card; hence, it cannot be retrieved by thieves. Only an individual who has physical access to the card can provide the code. Asking for this security code during online payments can deter scammers from executing transaction fraud unless they have the card. Restrict the number of times one can input a wrong security code to prevent criminals from using code generation software.
As you employ these measures to protect your business and customers against transaction fraud, beware of other forms of online crime as well. Secure your business computers with fraud prevention and anti-spyware software to prevent cyber criminals from accessing information about the firm and clients.