Why does the robber rob the bank? Because that’s where the money is. Now that trading goes online, merchant payments become the target for various types of frauds. Most of them, though, can be prevented if you take a complex of anti-fraud measures offered by a security provider.
Types of Fraud to Expect
Among various sorts of fraud, for merchants, the most dangerous is chargeback fraud. No matter if it’s true or friendly kind of it, it may result in losing your money after you ship the purchase. And if the dispute is solved not in your favor, it will be too late to want anything back.
Another risk is getting involved in credit dispute card fraud as the seller receives money from stolen cards. Of course, you did not want it, but the investigation (should it get to you) may get on your nerves too heavily. There are more sophisticated schemes, like a triangle or BOPIS fraud, that minimize the risks of being caught for fraud. At your and your customers’ expense, of course.
Some criminals may go after your customers’ data. They can try to hack your servers directly or go phishing, persuading your customers to share their personal information on a site that looks like yours.
It’s also recommended not to keep transaction details stored on your servers for longer than necessary. Information about your customers required by KYC – yes. The summary of your revenue – yes. Details of certain transactions – no. It’s the bank’s job. Keeping it on your servers increases the risks of leaking, which can result in various sorts of fraud and a shock to your reputation.
Preventing Risks in Real-Time
If you use the right payment gateway, you can trust it with your payments. In addition, you may connect fraud prevention systems that analyze all the ongoing transactions in real-time and react if the risk is too high. This way, you can prevent purchases made with stolen cards. As for chargeback fraud, there are three main things to do:
- Keep as much data as possible about any detail of purchase, including shipping, delivery, transaction time and buyer location, and so on.
- In the descriptor, provide as many details as possible. Let it contain the name of your business and the category of item/items, the amount, the time, and so on. This may prevent friendly fraud.
- Join a chargeback alert program. Choose one that fits your average sale, as otherwise, an alert may cost you more than the chargeback itself.
You should also track the feedback in real-time (or as frequently as possible). If any complaints or warnings imply there is a phishing site imitating you, it’s a reason to contact the authorities. You also need to keep your customer informed, send them an alert, and explain how to tell your actual site from impostors. A little emergency redesign may be useful too.
The Conclusion (Actually, No)
There is much more to say on any aspect of avoiding risks when handling payments. The main thing you should acknowledge, though, is that it’s better to not reinvent the wheel. Instead, you can save your time, money, and effort by connecting already existing security services. The battle between criminals and protectors will be long, so stay on the right side.
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