According to Experian, there was a 33 percent increase in ecommerce fraud in 2017. The research indicates that the surge was probably an issue across multiple industries. Surge trends likely showed an increase in other countries as well. As more and more people move to conduct more business online, they have to adopt fraud prevention policies and practices to ensure that customer information is safeguarded.
PCI compliance offers best practices aimed at curbing fraudulent activity. The Payment Card Industry Data Security Standard recommends practices that all merchants who accept and store card payment can observe to keep customers safe. In assessing cardholder information and constantly measuring vulnerabilities, companies can correct any shortcomings that could expose customers to risks.
Fraudulent prevention has become a concern among merchants as well. Chargebacks are a problem across every industry, especially in online card-not- present (CNP) transactions. Some of thosechargebacks can be attributed to fraudulent activity. Unauthorized use of the card is the most commonly cited reason for chargebacks among merchants. Expired cards being accepted in error are another challenge for some merchants. Merchants want to be confident that they are protecting their consumers from potential fraudulent use of their credentials. They also see fraud prevention as a means of protecting themselves from fees that could increase costs for their merchant services (having to pay chargeback fees per occurrence).
Now more than ever merchants are turning to specialized fraud prevention services to minimize risk. One method is risk scoring, where an algorithm is used to weigh the credibility of a transaction. Some options allow you to scrutinize the pending transaction and reject it if it does not seem feasible. Address verification methods compare the billing to the mailing address to gauge the merit of a transaction pending. The number of transactions processed in an hour can be limited to eliminate risks associated with high volume attacks. Merchants can set upper limit thresholds to minimize exposure to risks. Advanced IP filtering prevents customers from being able to use the card from any unapproved IP address. IP addresses identified as risky locations are barred from submitting credit card transactions. Any data transmitted over a network is encrypted at the time the transaction is processed, adding a heightened level of security to the payment process.
A customer’s information is entrusted in the merchant’s hands at the time of transaction. Merchants are encouraged to remain on top of PCI compliance practices and pursue fraud prevention services as another measure to protect customers. While criminal and fraudulent activity will always be a concern with those who shop online, merchants can adopt the latest technologies and practices to protect their customer base.