At one point, eCommerce companies seldom had to worry about card fraud personally impacting them. While they might occasionally have to deal with someone stealing another individual’s credentials and sending out unauthorized orders, these events were uncommon enough that they normally amounted to a rounding error when tallying up a year’s worth of receipts. Now, however, fraudulent payments are becoming such a serious issue that quite a few small business owners are feeling the pinch.
Due in no small part to the sheer level of commerce that takes place online today, credit card fraud is one of the fastest growing reasons for canceled orders online. The Dedicated Card and Payment Crime Unit of the London police force is believed to have prevented around £85 million worth of credit card fraud in the first half of this year alone. Those wishing to fight back against the problem have come up with some creative ways of doing so.
Protecting a Business Against Credit Card Fraud
When it comes to stopping fraudulent purchases, most of the resources for doing so are geared toward protecting consumers. That’s forced business owners to invent their own methods of striking back. One of the most popular has been to attempt to dramatically increase sales in order to offset any losses that one incurs as a result of fraud. Those who have sufficiently high sales can still write off returned purchases made as a result of unauthorized transactions, so it might make sense to increase marketing efforts.
Others have tried to implement a waiting period after someone purchases something before goods are shipped, but this is unwise in most industries. Consumers are expecting faster fulfillment times, so this generally isn’t an option. Enforcing a strong password policy may be a better way of dealing with the issue, since fraudsters are unlikely to want to fill in proper account details like a regular consumer might.
Something as simple as a basic captcha can actually reduce the risk of someone making an errant purchase, because a growing percentage of fraud is carried out by bots. With a 146 percent increase in automated fraud over the last year, online store owners are quickly taking note. Humans can normally pass these tests with a relatively high degree of accuracy, but it’s more difficult for bots to do so.
Those who are just getting into the business are taking advantage of their unique situation.
Building a Fraud-proof eCommerce Platform
There’s no such thing as a truly fraud-proof store, but monitoring services have helped to improve the position of many places for some time now. Quite a few people are investing in a form of enhanced fraud insurance, which is a step up from these conventional plans. New store owners can enter into a service contract when they first open up their business, and it can then grow with them as time passes. They’ll normally receive analytic data that may help them to figure out the time when fraud is most likely.
Entrepreneurs who are just learning how to start an online store may want to read up on the latest version of every piece of back-end software they plan to deploy in their platform. By making sure that they have all of their software updated from the beginning, there’s less chance that someone can create accounts automatically with which to place orders using stolen credit card numbers.
They will, however, have to be vigilant about installing updates later on.
Keeping a Platform Safe
In some ways, the current situation resembles an arms race where bad actors are constantly coming up with new ways to circumvent these protections. Some are resorting to an automatic form of advertising fraud to generate money, which they then use to make unauthorized purchases. A few business owners are even finding that some of their payments are being sent back as the result of a credit freeze.
The good news is that those who are starting an eCommerce store today might not have the visibility necessary to fall victim to fraudulent purchases made by those who have stolen credentials. However, as a company becomes more popular the risks of this happening increase exponentially. Those who are starting to see dramatically increased sales will want to take some extra steps to ensure that all of the purchases that are made on their site are indeed from a real buyer.
A little increased marketing to offset losses might not hurt either.
