Safeguarding against fraud
Protecting your business from fraudulent transactions is crucial, especially when accepting card payments. Fraudsters can target businesses of any size, so it’s important to be aware of the risks and take proactive steps to safeguard your transactions. Below, we outline best practices to protect your business from fraud.
Types of fraud to be aware of:
Card Not Present (CNP) fraud
CNP fraud occurs when a transaction is made without the physical card being present, such as in online, over-the-phone, or email transactions. Since the card is not physically verified, it’s more difficult to detect fraud.
Card theft and loss
If a cardholder’s physical card is lost or stolen, fraudsters may use the card for unauthorized transactions before the cardholder can report it missing.
Identity theft
Fraudsters may steal a cardholder’s personal details to make unauthorized purchases or commit other types of fraud.
Best practices for preventing fraud:
1. Use secure payment methods
Always use point-to-point encryption (P2PE) to protect card data during the transaction.
Implement 3D Secure authentication for online transactions to add an extra layer of protection, helping to confirm the identity of the cardholder.
2. Check transaction details
When processing a transaction, verify the card number, expiry date, and Card Security Code (CSC).
Ensure the billing address matches the cardholder’s records, particularly for Card Not Present transactions.
3. Be cautious with large or unusual orders
Fraudsters may attempt to make high-value or suspiciously large purchases. Be cautious with orders that seem out of the ordinary, especially if the customer is in a rush or requests expedited shipping.
Verify the customer's identity, especially if the shipping address differs from the billing address.
4. Keep accurate records
Keep all transaction records, including sales and refund receipts, to help with dispute resolution and fraud investigations.
Regularly review your transaction history to spot any suspicious patterns or irregularities.
5. Train your staff
Ensure your employees are trained to recognize common signs of fraud and understand how to handle suspicious transactions.
Encourage your team to always double-check large or unusual orders, and escalate any concerns for further review.