In today’s market, you almost have to accept credit cards if you want to stay competitive. Accepting credit cards, though, comes with a risk of fraud. It is imperative that you protect your business from fraudulent credit card transactions.
Why You Must Worry About Fraudulent Credit Card Transactions
If you accept a card and process a fraudulent transaction, it will cost you thanks to the chargeback fraud penalties. The card company will charge you for accepting a bad card when the consumer reports it as fraud. This can end up costing you a lot of money, so you need to do what you can to avoid accepting credit cards from people who have no authorization to use them.
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Before you look into the ways that you can fight fraud, you should know that it is impossible to catch every single instance. Even if you use every possible technology and fraud prevention measure, scammers will still find a way to commit credit card fraud.
For this reason, you may want to consider using a service, such as Ethoca, that will help you to combat fraud and that will work on your behalf to prevent the monetary losses associated with it.
Three Ways to Fight Fraudulent Credit Card Transactions
There are three main methods available right now to help you fight fraud and stop scammers from taking advantage of your business, according to Entrepreneur.
Educate yourself and Your Staff
One of the biggest tools you have to stop fraudulent credit card transactions is your staff. Train them on the Payment Card Industry standards, which are widely accepted standards that outline how to safely and properly accept credit cards.
For online orders, make sure you can spot the signs of something wrong. These include multiple purchases in one day from one IP, orders on multiple cards to one address, and orders that fail verification checks.
Use an Address Verification System
An AVS system using numerical matching of the address on the card to the address on file with the merchant. It is a basic type of verification and subject to false reporting, but getting a full match can help you to feel more secure about accepting the payment. If there is not a match, you can request identification to verify the identity of the person yourself, so it helps to encourage good card-accepting habits.
Change to a Chip Reader
Chip readers are the most secure way to accept credit cards, and if you are not using them yet, you should be. It can detect counterfeit cards easily. Also, when you use a chip reader, you remove your liability if fraud does happen.
Protect Your Business
While you certainly can deny any credit card transactions and insist on cash only sales, that is not always the best move for your business. Since you probably need to be able to let customers pay with a card, you need to make sure that your safeguard your business against credit card fraud by using the tips you’ve just learned.