Credit card fraud can cost a lot of money for businesses. In 2016, there were $16 billion lost due to credit card fraud. For every $1 in fraud lost, merchants lose $2.94 in revenue. Among the costliest are card-not-present transactions. Card-not-present transactions cost more because they have a higher risk of fraud and chargebacks. Given the high cost to businesses, it’s essential to employ preventative measures to decrease the chances of suffering from this financial loss. Here are some tips you can follow to help prevent credit card fraud.
- Take a good look at the credit card.
Anytime you get ready to fulfill a customer transaction through credit card, always take a good look at it. If you feel there’s something suspicious about it, feel free to ask the customer for their photo identification. Cardholder identity can also be verified through Address Verification Service tools, which some merchant service providers offer. The customer would enter their billing address, and what the system does is it cross-checks the address provided with the address on file with the issuing bank. In the event there’s a mismatch between the addresses, the transaction won’t be fulfilled. In addition to these tools being useful, you can also pay attention to any physical abnormalities to the card. Observe if the card has any misshapen letters, damage, unusual shape, or any form of abnormality that seems suspicious.
- Keep software and hardware up-to-date.
Payment processing technology should always come with tools that have strong anti-fraud features. See if it follows PCI compliance. These are a set of industry standards that ensure customer payment information is processed and transmitted by companies in a secure way. In the case of when you’ll be using a card reader, it’s best to use an EMV chip reader. These readers are more secure in comparison to the traditional swipe reader. A traditional swipe reader is more vulnerable to credit card skimming, which is when a card that’s swiped can hack into the system and export all the information of the credit cards swiped with that same reader.
- Pay attention to suspicious behavior.
Some businesses have many face-to-face interactions with their customers. If this is the case for your business, after a while, you probably get an idea of how customers normally act with you. With this knowledge in mind, pay close attention to a customer that appears out of the norm with your usual customer interactions. Be suspicious if a person appears more nervous or uncomfortable during the time of the transaction. While it’s not always the case that the person could be a fraudster, it’s certainly an early warning sign to look out for, and if necessary, take further action, such as contacting the credit card issuer.
Keeping these three tips in mind will help you be better able to prevent credit card fraud. The most important thing involved in these tips is simple awareness. Be aware of your customers, be aware of the credit cards used, and make sure you’re aware of the latest security upgrades to keep your business safe from fraud.
Disclaimer: This content does not necessarily represent the views of IWB.