SECURITY – How to Protect Your Online Business From Credit Card Fraud

What is Online Credit Card Fraud?

Keeping cash in your pocket, you take the risk that it might be stolen and spent without your knowledge. It’s the same with online payment. There is a possibility that your credit card data may fall into the wrong hands. It can happen to anyone just like pickpocketing or other forms of fraud. However, taking the right preventive measures, both buyers and merchants can avoid such problems.

Online sales is considered to be card not present (the cardholder is not physically present) transaction. It means that signature-based fraud prevention techniques are all of no use, as merchants never get a chance to see payment cards any more.

Before entering any sensitive information, always make sure that the URL is safe, the merchant is reliable, and always check the presence of SSL certificate.

In order to protect ourselves from identity theft and scams, we obviously need to be mindful when providing personal information. However there’s no reason to hesitate to share reasonably required data (like address, phone number and so on) securely and for our own good. The more cautiously card holders are identified the stronger protection keeps their data safe.

Now, should you consider any charge (showed up on your checkbook register or your bank account statement) to be unauthorized, do not hesitate to contact your bank.

What is Chargeback and how to prevent it as an Online Merchant?

Simply speaking, chargeback is the return of a transaction to the consumer. It is initiated by the card issuer bank upon a complaint by the account holder. Chargeback is an unfriendly way of returning funds. Normally it happens by some confusion about the charges or fraud activity that finally leads to painful extra fees at merchant’s side.

Each business operating in online payment industry aims to get a huge traffic, keeping chargeback ratio as low as possible.

Chargebacks can result from a number of reasons. The good news is, most of them can be prevented. The two most important components of prevention are professional Client Service and Fraud Detection. Now let’s see how an Internet Payment Service Provider can protect your business.

Antifraud – fraud prevention

Running an online business, are you really aware of the newest tricks in credit card fraud? Do you know where the weak links are in your system, which can easily be misused by a slick online fraudster within seconds?

Well, probably not, because it’s not the merchant’s responsibility. Such issues necessitate experts like the Internet Payment Service Providers, so you can focus solely on your business

A well-designed fraud prevention system is made up of the following main elements:

1. Reliable, efficient, scalable and sophisticated automation systems
2. A team with several years of experience in fraud prevention

Without these key elements, the web business loses a considerable amount of incomes. One of the most common mistakes merchants make is to refuse lots of non-fraud transactions by using predefined filters alone.

The secret is, implementing the right automatic tools and keep it under the control of watchful experts twenty-four hours a day, seven days a week. Building a successful online business, this is what a payment service provider can really chip in with. Maximum profit while cutting losses and risk.

What Is EMV, and How Will the Adoption Affect My Business?

What is EMV, and how will it affect how I process credit and debit card transaction?

EMV – The industry-recognized specification that forms the basis of chip deployments around the world. Originally created by Europay, MasterCard and Visa. Europay is the Visa of the rest of the world when it comes to credit and debit card processing. Well what does it mean? EMV is the Global standard for processing credit and debit transactions by using a “chip and pin” or “chip and signature” authorization process instead of the “mag-stripe” authorization process we use now.

OK, so what is “chip and pin?” The “chip” is a microprocessor that would be embedded into the credit or debit card that would store account information, this would take the place of the mag-stripe. Your ‘pin’ or signature would be needed to activate the chip to release the account information to authorize and process the transaction.

So, what is forcing adoption of EMV in the United States? Quite simply, it will reduce the amount of money the United States spends on losses of credit card fraud. The U.S. currently accounts for 47% of global credit and debit card fraud even though it generates only 27% of the total volume of purchases, according to Global Card Fraud. We’re talking about 3.5 billion per year in fraud losses in the United States alone. Counterfeit and lost and stolen card fraud represents significant cost to all participants in the payment process, including retailers, acquiring banks, card issuers and cardholders. By lowering the overall cost of fraud in the U.S., will also lower the costs of credit card processing to merchants, and this savings will hopefully trickle down to the general consumer.

Important Dates

By or about April 15th 2013-Processing companies should be ready for adoption.

About October 2013-Overall merchant adoption will start.

Merchant Responsibilities

At the merchant level, a small number of terminals will become obsolete and will need to be replaced. Most merchant credit card terminals will need to be adapted and reprogrammed to accept the new chip cards, they will need to add a PIN pad that has a chip reader to slide the card into if their current terminal is not already equipped. There will also be a shift in fraudulent liability, the merchant will bear the liability of fraudulent transactions that occur at their point-of-sale to those who do not comply with EMV adoption.

The Reputation of Debit Cards

Most SMEs (Small and Medium Enterprises) will appreciate now that there is a huge demand for credit card terminals, and since Chip and PIN technology emerged retailers without the suitable card terminals have lost out on important business. The debit / credit card is going to change into the payment choice of the public very quickly and it’s taking effect already.

What precisely has brought about this?

This is pretty much due to its convenience and simplicity, but you can also get other factors having an influence on the growth of debit card payment processing currently. Not least among these things is of course the abolition of the cheque guarantee card and the pending abolition of the personal cheque. These matters have forced individuals who would commonly pay by cheque into trying to find other options, and with no ready supply of cash, a debit / credit card works wonderfully as it’s easier than a cheque and the funds are transferred from your individual bank account straight to the merchant in reduced time.

Safety is yet another aspect that attracts customers to using debit / credit cards. It’s a lot easier and safer to carry a card and pay for goods and services instead of risk carrying substantial amounts of cash that may get stolen and not replaced. You could say that the same thing may happen with a credit / debit card, however the debit card has many more measures available to prevent its fraudulent use. Also, should your credit card be thieved and somehow used fraudulently, the banks have a system in place to refund the person for monies lost.

Low theft threat

Should you take your credit card out with you and obtain goods and services in card terminals then all you have to have is your PIN number. Chip and PIN terminals can offer the greatest security since the customer can’t use the card unless they know the 4 digit PIN number; this is naturally the same at cash terminals. Web payments are quite different, but of course you will always need to know the address of the card owner, their complete name and any passwords that may exist as a result of security feature Verified by Visa. This feature on Visa debit cards has reduced online web payment fraud considerably.

Have you considered contactless technology?

What exactly happens given that you have a card which is capable of going from shop to store spending up to?10 on services and goods that doesn’t require a PIN number? There are issues here only if you don’t realise you have lost your credit / debit card or had it stolen. If this is the case then quite simply anyone may get hold of your card and go from store to retailer buying things. The only real deterrent to fraud with contactless technology currently is that occasionally a retailer may be required to do a full transaction with the Chip and PIN unit in order to verify the card users identification etc.

Conclusion

In either case, whether it is with contactless debit cards or standard credit cards to use in Chip and PIN terminals, the retail world, along with debit and credit card processing are moving towards a future in which the use of plastic payments is the normal thing to do.