5 Ways to Protect Your Business from Credit Card Fraud

5 Ways to Protect Your Business from Credit Card Fraud

On 17 November 2022

Debit and credit card fraud has skyrocketed over the years due to many customers opting for online shopping.

A report by TransUnion indicates that fraudster threats against businesses increased by 46% in 2021. Fraudsters are using avant-garde technology to steal credit card data without necessarily having physical contact with the card. The data stolen can be used to make purchases online or be sold to scammers who use it for malicious activities.  

Consumers and merchants are affected when criminals use stolen data to shop online. When a customer successfully disputes a payment, the business must reimburse the customer and pay a chargeback fee to the issuer. On the other hand, when the merchant wins the case, the customer will lose the money.  

The most common types of fraud include: 

  1. Card Theft Scams - This occurs when professional fraudsters steal cards or card information and try to use it to buy products. They will then either be the consumers or resellers of the products to unsuspecting buyers. They may also claim to have canceled a service, e.g., a holiday booking, and ask for a refund for the amount paid by the genuine cardholder.  
  2. Friendly Fraud - This occurs when a dishonest customer disputes payment despite receiving goods or services ordered. They then issue a chargeback claiming not to have received the product or service or claim that the card was used without their consent. 

5 Ways To Protect Your Business From Credit Card Fraud 

  1. Look out for suspicious email addresses - If the email used contains too many characters or mismatched letters e.g [email protected], ask the customer to send verification details. It's easier to go through the emails for medium-sized e-commerce sites where the orders can be manually checked. 
  2. Require a Security Code for all Cards - Most online card payment processes require consumers to input the CVV number. Depending on the card issuer, the consumer may also be asked to provide a One Time Password - OTP. 
  3. Assign tracking numbers to orders and require signatures at delivery - This ensures you can track the transaction from when it was initiated to when the customer acknowledges receipt of the item.  
  4. Equip your team with relevant knowledge in identifying and preventing credit card fraud from different transactions the company processes. 
  5. When in doubt, ask for verification - Trust your gut. If you are suspicious, ask the customer to provide proof of identification and match it with the card used to pay. Alternatively, contact Pesapal on [email protected] for assistance. 

How Pesapal is Protecting Your Business from Credit Card Fraud 

Pesapal is committed to protecting all the businesses under our ecosystem from online fraudsters. Having PCI DSS certification, we employ world-class measures to safeguard merchants' money.  

Additionally, we provide the following for businesses that process payments through our platform: 

  1. We have an advanced fraud management system that can block suspicious transactions. 
  2. Pesapal has a dedicated Risk team that checks all transactions. 
  3. Risk profile of our merchants; we have defined our merchants depending on the sectors they fall under and the volume they process to caution merchants from fraudsters. 
  4. Inform merchants when a transaction is suspicious so they can ask for verification.

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