Online fraud is not only a problem
for consumers, it is also one of the major concerns of online businesses. The
common cases of identity theft and stolen credit card information are just some
of the primary fraud schemes that online businesses encounter. Each year online
fraud is costing businesses millions of dollars and countless hours of
additional work. This is the reason why businesses, along with their partner
establishments are constantly working together to help reduce these losses.
If you are an online business owner
or are planning to set up a business online, here are systems and ideas that you can adopt to protect your business
from online fraud;
Detecting
Online Fraud
- CSC or Card Security Code
CSC is one of the initial security
checks utilized by an online business payment processor to ensure that the
buyer owns the credit or debit card that they are using. This security code can
be found at the back of the card.
Merchants are not allowed to store this security code, so the only way
an online buyer can have the correct CSC of a credit card if they have the
physical card with them.
- AVS of Address Verification System
AVS is an additional layer of
protection implemented by payment processing companies. Aside from providing
CSC, your processor also requires customers to provide their address. This
security check is programmed to compare the address provided by the buyer
against the address stated in the record of their credit card provider.
Although AVS makes a good security
layer, this method is not always as reliable. Mainly because many credit card
providers do not offer support for this program. Most providers in the US do
not have facilities for this system or do not have updated record of their
clients. This reliability issue has led payment processor to consider AVS as a
part of the overall risk assessment instead of being a primary security layer.
Another purpose for AVS is to
counter check the shipping address provided by the buyer. Most online fraud uses a different shipping address compared to their credit card’s billing address. In a way, AVS makes a good fraud filter layer. However, you must note
that having a different billing and shipping address does not always say fraud,
so what you can do is to call the card owner through their registered number
and confirm if they authorize the transaction.
In case this you are still in doubt after checking, then you can simply
deny service by informing the suspicious customer that you only deliver to AVS
verified address.
- Fraud Detection Software
Fraud detection software is another
popular option among big online businesses. This option allows faster and more
systematic security check based on a set of accepted patterns. Online businesses dealing with large volume
of orders on a daily basis do not have enough time to manually check every
suspicious transaction. This gave birth to the use of fraud detection software.
These are just some of the security
check options that you can use to keep your online business protected against
cyber criminals. Although these options are not 100% foolproof, you can count
on these protective layer to significantly reduce the number of online fraud
cases in your business.
