Online Credit Card Fraud – Key Factors

Online businesses and their customers are encountering online fraud on an increasing basis. Fraudsters use stolen card details to target online payments.

Before you begin selling online, understand that your business will be held responsible for all fraudulent transactions it processes.

Be Responsible

The responsibility of determining whether a customer is genuine rests on you. Failing to do this will render you liable for reimbursement for unauthorized card use.

There is some good news. E-Next offers fraud-battling tools that help your business reduce its fraud-related losses.

However, you must also take individual measures to prevent fraud. New online companies that do not do this may find themselves out of business within just six months.

In addition, you must ensure that stored card payment information is protected from fraudsters and hackers who may try to steal credit card details. This compliance is necessary to meet card scheme requirements (referred to as the Payment Card Industry Data Security Standard, abbreviated PCI DSS) pertaining to the protection of cardholder data.

Data breaches or non-compliance can result in large fines. Therefore, before your business begins accepting payments, you must understand your obligations. For more information, refer to our PCI DSS page.

Why fraudsters target e-business

Since you do not physically interact with the cardholder or the card, you cannot:

  • physically check the security features of the card to verify that the card is genuine
  • require a PIN or signature to verify that the consumer is the legitimate cardholder
  • guarantee that the legitimate cardholder has provided payment information

Some retailers doing business online do not understand the associated risks so they do not make any effort to prevent fraud. As a result, they become easy targets.

Is my business at risk?

All kinds of e-businesses experience fraud but certain types of products and businesses are particularly attractive. If you offer any of the services or products below, we recommend reviewing your fraud tools, controls, and relevant company policy to ensure that your business is protected:

  1. Gaming
  2. Financial services
  3. Travel
  4. Electrical or computer goods including gadgets, videogames, and electronic toys
  5. Telecommunications (particularly Voice-over-IP) and technology
  6. Web hosting and domain name registration
  7. Furniture, particularly contemporary and modern
  8. Clothing, jewellery, accessories (sunglasses, handbags, etc.) and other fashion items
  9. Charities (often susceptible to card testing that involves making small payments to verify that the card is authorized and then using the card to purchase costly services or goods)
  10. Goods that can be downloaded
  11. Other items that are in demand and can be re-sold quickly and easily

Whether or not your business is at high risk, focus on protecting it from fraud. The following information will help you identify fraudulent activity and take action before it can harm your customers and your business:

Spotting Fraud

In addition to using the fraud detection tools provide by E-Next, you should be alert to other indications of suspicious payments.

A payment that is potentially fraudulent is not in line with the average purchase or customer.

Many fraudulent payments share these attributes:

  • high-value orders
  • high-quantity orders
  • late night orders
  • orders placed from high-risk countries (our Support site offers more details)
  • guest house, hotel, or P.O. box addresses
  • different billing and shipping addresses or different billing/card issue country and IP country
  • email addresses through free or anonymous services
  • mobile number vs. landline
  • inconsistent customer details with multiple purchases (ex: different address or name but same email address)
  • frequent purchases
  • indiscriminate purchases
  • express delivery
  • frequent contact made by nervous customer
  • suspicious customer behaviour

It is good sense to verify these transactions so we recommend doing it.

Case Study

We have created three ways to identify transactions that are potentially fraudulent:

  • Traditional detective work
  • No time to check
  • Honey Trap

Traditional Detective Work

If an order seems too good to be true, it most likely is. We contact the customer to make him/her aware of a possible payment issue. At that time, we request three additional pieces of information:

  • work telephone number
  • home landline number (if only a mobile number was provided)
  • work email address (if only a free/anonymous address was provided)

We use online resources to verify this information and we call the provided telephone numbers. Taking just a few extra minutes before processing the transaction saves hours creating and distributing items for which payment may never be received. Though you may encounter an honest customer who is upset by the enquiry, this individual will probably feel appreciative that his or her card security was taken so seriously.

No Time to Check

Fraudsters often try to place orders at the last minute, hoping that these will proceed through a system unnoticed and they will not be contacted. We are suspicious of any large orders placed during the final minutes of availability.

Honey Trap

Say a suspicious customer orders a birthday cake. We then offer several additional related products including a party pack that is drastically overpriced and includes only cups, plates, candles, and banners. Past experience has revealed that individuals using stolen credit cards are not concerned about the value they are receiving for their money.

They will take advantage of all the “extras,” even those that are not good values, because they are not going to be paying for their orders.

Switching Merchant Providers And Payment Gateway Is Painless

Receive two months of free payment processing for switching to Business Gateway 350. If high fees and poor service  from your merchant account provider have left you dissatisfied, try our Business Gateway product.

With Business Gateway, you receive an affordable system suitable for small or medium sized businesses. Our smart solution allows you to accept payments online, offline and internationally without hassle.

Call us today at 0203 150 1490 or complete an online application. We will happily price match your existing merchant account package and make switching payment gateways a breeze.

Payment processing for as low as £19.95 monthly

If you have established a merchant account but are seeking a new provider for payment processing, we offer free processing for two months and then a flat-rate monthly fee of £19.95. With this package, you receive the core online processing features including 350 transactions.

Put customers within convenient reach

Make life easy for customers by allowing them to pay you in the manner they desire. Business Gateway is compatible with every major debit and credit card provider and PayPal. It accepts multiple currencies and features customizable pages in more than 20 languages, offering your business easy access to millions of local and overseas customers.

Need more information on switching merchant accounts? Request a free call-back or obligation free consultation. Click Here to make an enquiry via our short application form.

Integration is fast and secure

It is fast and convenient to begin using Business Gateway. The process may be as easy as linking your website to our secure payment pages that allow customers to enter payment details. E-Next has a Tier 1 PCI DSS compliant infrastructure, allowing you to rely on the highest level of security for card data.

Around-the-clock technical and customer support

We strongly believe in excellence in service. We back up this belief with dedicated technical support available 24/7 and documentation that helps your IT specialist or you integrate your shopping cart/store package with E-Next in just days.

Why use E-Next for online payment acceptance?

  • More than 40,000 merchants are already using us
  • Our processing uptime record greatly surpasses industry standards
  • We process more than one billion transactions every year
  • We are the fourth largest acquirer worldwide
  • More than 99 percent of calls are responded to by our help desk within 30 seconds
  • Our PCI DSS Level 1 compliance provides the utmost security

Enquiries and Application

If the payment requirements of your business are more complex, we will tailor services and pricing to your needs. Call us at 0203 150 1490  now to speak with an account advisor or complete an online application.

Corporate customers interested in offering local payment solutions for high transaction volumes while receiving high-quality risk management tools should explore our corporate solutions.