Utilising the latest fraud screening tools is imperative as your business will be held liable for any fraudulent transactions. UK businesses use a range of different tools to combat the various cyber fraud threats including: card verification value (CVV2), 3D Secure, and address verification system (AVS). When searching for a merchant services provider, look for these tools to be included in their offering.
Incorporating the above fraud screening tools into your payment processes can help shift the liability of fraudulent charges to the customers’ card issuer. Otherwise, your business risks losing money to chargebacks from the customers issuing bank. Despite chargebacks being relatively inexpensive, too many can result in either increased merchant account rates or being dropped by your merchant services provider altogether.
To protect your business and customers from fraud, here are five key things to consider:
- Adhere to the PCI Data Security Standards. These standards provide the structure, support, and materials for handling cardholder information and developing a secure transaction process. Your merchant services provider should be able to assist your business in becoming PCI compliant.
- Incorporating a 3D Secure check into the transaction process. 65% of fraudulent transactions in the UK during 2011 occurred when the card was not present, and businesses had no way of verifying the person making the transaction is actually the card holder. 3D Secure requires online shoppers to input a password which provides an additional level of authentication
- Cross-check the given telephone number and delivery address with the billing address. This can be done through an address verification system (AVS) or other third-party systems (e.g., Equifax, 192.com). Avoid shipping to an address that is different from the billing address.
- Manually review unusual transactions to identify if they may be fraudulent. Common cases include:
- Purchases that vastly exceed the average value of your businesses’ normal orders
- Requests to ship orders outside your own country
- A customer who orders more than once in a given day
- A customer who refuses to confirm their credit/debit card and billing address details
- An existing customer who suddenly orders a substantial volume of goods
- Display details of your returns/refund policy on your website. Honour the policy, and respond quickly to customer queries. This could help your business reduce the number of disputes and chargebacks you may receive.