5 Tips to Reduce the Risk of eCommerce Payments Fraud

Reducing risk of fraud for credit card transaction is as simple as counting to 5!

E-commerce fraud attack rates have increased sharply year over year. In 2012, payment card fraud losses incurred by merchants and card issuers in the US alone totaled $5.6 billion, with $2.6 billion of that being card-not-present fraud. In 2018, the US total was projected to be $9.1 billion, with $6.4 billion being CNP fraud.

Savvy eCommerce merchants are looking to get ahead of the curve and deal with eCommerce fraud and chargebacks before they even happen. Many merchants do not know if they are getting the best possible rates for their processing, how secure their data is, or how to inoculate themselves from the rising risks and costs of fraud. This is why having payment industry experts on your side is so important.

Selecting the right payment processing solutions to reduce your risk of fraud involves looking at the following 5 components of every eCommerce transaction:

  1. Are your processing solutions safe and secure? Before you even begin analyzing where fraud can occur at any step of the transaction process, you need to first consider if the companies processing your payments are PCI-DSS compliant. You need to know how safe and secure a payment processing solution is before you entrust with them your business reputation and your customers’ data. Using EMV-technology for card-present transaction and tokenization for all data are two of the many ways that your solutions should be working to protect your business.

  2. Does your POS/online shopping cart have basic fraud filters? When the customer places the order, your system should have pre-set filters to eliminate the most common types of fraud for your business and have some verification tools to confirm the legitimacy of the transaction. These filters can and should be configured to prevent many fraudulent charges from even submitting. Previous order history or flagging transactions above a certain size, for example, can help a merchant evaluating how risky a particular transaction might be.

  3. In addition, your gateway should have the ability to turn away easy fraud at the checkout. Fraudsters today are savvy and sophisticated. Some essential fraud filters that should be used are Card Verification Value, Address verification and transaction size. Other effective fraud tools are on the rise, may be useful, depending on the individual transaction and fraud environment for your business and within your industry. These include lookout mechanisms, flagging high-risk countries, and more.

  4. After the gateway approves the order, an additional protection tool can be applied using third-party fraud detection systems. Some solutions may use simple automated filters, while others may use a combination of advanced machine learning techniques and human analysis to apply merchant-specific fraud rules to the review. The way fraud filters are configured can play a role in their effectiveness so it’s important to find a solution that can be easily tailored to your specific business needs. If you have orders over the holidays where the shipping address differs from the billing address, for example, your business may benefit from the dynamic power of an automated solution that also utilizes human analysis.

  5. The card network, issuing bank, and card brands also play a vital role in detecting fraudulent transactions. Payer authentication such as Verified by Visa (VbV) and MasterCard SecureCode are both tools provided by the card brands to reduce fraudulent transactions in excess of simply doing a cursory credit check of the customer.

From PCI Compliance to fraud protection, APS Payments and Clearsale have you covered for all your eCommerce security needs!

Who is APS Payments?

The APS Payments team are experts in the payment industry and offer custom tailored advice to provide the secure, compliant, and easy to use payment solutions that your eCommerce company needs. Our seamlessly integrated solutions automatically submit required data and reduce manual entry which lowers any risk of error and protect your data every step of the way. APS Payments offers seamless integrations with Magento 2, WooCommerce, BigCommerce, PrestaShop, as well as hundreds of other ERP, eCommerce, POS, and mobile platforms. APS Payments is one of the fastest growing credit card processors in the United States and we are proud to be on the 2019 Inc 5000 list honoring the nation’s fastest-growing private companies. APS Payments is leading the way in the payments industry by providing 24/7 award-winning customer support, guaranteed rates, and up-to-date technology for thousands of merchants.

APS Payments and Clearsale recently co-presented a webinar on tips to ensure a smooth checkout to delivery process for your customers during the 2nd largest shopping season of the year: Back to School.  Watch the recording to learn how to streamline, automate, and reduce risk in your Magento shopping cart.