That merchants on the online space should expect increased fraud on the platform is no longer debatable. The rollout of EMV technology in particular is expected to catalyze the shift of fraud from the card industry into the ecommerce platform.
The EMV technology is making it virtually impossible for these fraudsters to exploit the card industry. They are therefore expected to turn their attention to online fraud where there are still lots of loopholes they can exploit.
Not to fret. If you are an internet retailer, there are numerous automated and rather easy ways to lessen the risk of fraud. Here are some best practices.
- Set your payment gateway to ‘authorize at sale’
Chargebacks are one of the main ways through which online merchants lose money. The merchant is generally liable for chargebacks plus other fees resulting from any fraudulent order captured.
Setting your payment gateway to ‘authorize at sale’ allows you to inspect every order for fraud before you capture their payment and ship the ordered items. There are payment gateway vendors that do not offer this functionality. So you may want to choose a vendor that meets your needs in this regard.
- Analyze Address Verification System (AVS) codes
Be sure to have an ecommerce website that allows you to access industry standard AVS codes. Once a shopper enters their billing address, you can then verify if their address is the same as that which the credit card issuer has on file for the same cardholder – just to add credibility.
- Employ a fraud detection software
It will be rewarding if you shop around for a suitable fraud detection system. Leading eCommerce merchant account providers like EMB insist on having built-in fraud detection. And you cannot run out of options as there are lots of 3rd party software applications you can choose from.
- Use Card Verification Codes on your website
Make it a policy to request for customer card verification codes like the CVV2 code for Visa. These CVCs are 3- to 4 digit codes on the back of a customer’s credit or debit card. Using this functionality on your ecommerce website payment processing for all purchases will go a long way in preventing fraud. Since the code is not stored in the magnetic strip, it makes it hard to purchase without being in possession of the card.