Despite the fact that there are a host of e-payment
options out there, it still is a plain fact that the credit card is the
internet's chief currency. Research has shown that although credit card
companies reimburse 90 percent of consumers whose cards have been used
fraudulently, more than 75% of internet merchants who are credit card
fraud victims have to bear the cost themselves. Keeping this in mind,
it has to be said that in spite of the rapid growth of e-commerce,
online payment still remains an area of immaturity and major concern
for the internet industry, especially since there is no surefire way
eliminating credit card fraud.
Though a majority of the buyers
rightly stay away from online credit card transactions as far as
possible, it is the online merchants who have to bear the brunt of this
problem. Why? Simply because current reimbursement and payment
protocols are intended only for face to face transactions where the
cardholder and card are physically present and the sale occurs based on
the cardholder's signature and card imprint. This way there's a certain
amount of security available to both the merchant and the consumer and
trust is less of an issue. On the other hand, when it comes to online
credit card transactions run through an internet merchant account, the
deal is a blind one since neither the cardholder or merchant
representative is physically present, which means that the primary
responsibility of ensuring a "safe" deal falls on the merchant even if
they have acquired authorization from the card issuer.
For the
consumer, the best way to avoid becoming a victim is to use virtual
card numbers when shopping online and make sure they buy only from
those websites which are secure and encrypt payment information in
order to keep it secure from hackers and thieves.
Again this
means that the onus to prevent credit card fraud is on the online
vendor. So, if you are an online retailer with an internet merchant
account, take a look at the following ten tips to prevent credit card
fraud:
• Even if it is a bit of a bother, always insist on the
mailing address, postal or zip code and phone number of the buyer and
verify them before closing the transaction.
• Always ask for a faxed customer signature as well as a faxed Xerox or photocopy of the credit card.
•
Check the provided email address against the name on the credit card
and if the name on the card doesn't match the email then it's best to
ask for further ID confirmation before proceeding.
• Don't process the order unless you are able to directly contact the buyer by phone.
• Make full use of various address verification services wherever possible.
• Be extra cautious when shipping overseas especially since it can be much harder to pursue claims internationally.
• Reject process orders from free email domains unless you have irrefutable proof of the customer's identity.
•
Check the DNS cable of the remote IP of the buyer and use this
information to find out the remote server's geographic area and check
it against the address of the buyer. Very few people connect to the
internet using a long distance phone call. Also, verify the mailing
address, email and phone number of the server since hackers can easily
set up their own servers as well.
• Be extremely wary of buyers
asking for higher priced fast delivery or those being otherwise cost
insensitive, simply because a thief won't care about the prices as they
won't have to pay.
• Never ship products to postal box numbers and always ask for a physical shipping address.
So
if you own an internet merchant account and you take care and follow
the above steps, you'll go a long way towards preventing your business
from suffering the excessive chargebacks that accompany credit cards
fraud.
