credit card fraud prevention featured image

Credit Card Fraud Prevention – Protecting Your Business

August 2, 2020 / Posted in Credit Cards

In 2018, losses associated with card scams equaled $24.26 billion worldwide, and the businesses in the US are statistically most prone to fall victim to this type of felony. Even though it can’t always be prevented from happening, merchants can resort to an array of credit card fraud prevention methods that make it tougher for someone to pay with a stolen piece of plastic or take valuable information from your other customers. If you want to protect your business and faithful clients from financial loss, learn how to recognize suspicious activities and behavior, and utilize advanced technologies to keep your funds safe.

What Is Exactly Credit Card Fraud?

Simply put, credit card fraud is when an unauthorized person uses somebody’s private account information to make purchases or access resources through cash advances. This is a felony that doesn’t only happen online; it can occur in brick and mortar stores as well. As an entrepreneur, you should avoid unnecessary bad publicity and stress, as well as financial losses by recognizing potentially flatulent use of plastic in your payment environment. If you are not sure that specific actions are legal or illegal, some signs can help you identify potential perpetrators.

Know How to Detect Scams: Identify Suspicious Behavior

It’s said that the devil is in the detail and if you want to catch perps before they commit a felony, pay attention to the following signs:

  • A customer looks nervous and rushed, and they are buying things haphazardly without any logic
  • The client is trying to distract you while you are checking the data and signature
  • When characters on plastic are not the same size, and the hologram is damaged, it’s a red flag, and you should decline the transaction.

How Fraud Affects Businesses

The reputation of the enterprise is strongly affected by theft, that’s why you, as a business owner, should make sure that all paying accounts are secure. Fraudulent behavior can have severe consequences for the development of your company and the relationship with clients:

  • Cash flow issues – unauthorized transactions can cause cash flow problems by crippling an enterprise’s ability to make necessary payments like insurance premiums and rent.
  • Liability for purchases placed via stolen cards – no company is safe when it comes to scams, even eCommerce ones. When a stolen account is used to place an order, its owner is not liable for an illegal transaction meaning that if the enterprise has already shipped the order, they could stay without payment.

Payment Frauds Can Happen Without Stolen Cards

Scams can happen even without a card being stolen. The data shows that in 2019 over half of the attempted thefts were via mobile devices. This means that the thief can just go to the eCommerce sites on their phone and buy whatever they want using stolen payment information or credentials.

Also, scammers are not always using data from credit card transactions; they sometimes look into payment types such as digital wallets and gift coupons. With the Covid-19 pandemic, when people are more likely to stay home and use online shopping, these types of scams are on the rise.

There Is a Safe Way to Accept Online Payments

Scammers are getting more clever and greedier with time. Statistics show that only in the first three months of 2019, there were 5,305 eCommerce frauds reported in the US. Since giving up on eCommerce is not the solution, learning about different prevention methods and how to spot warning signs of theft is essential:

  • Be alerted when the order fails AVS (Address Verification Service) and CID.
  • A number of purchases on the same day or from the same IP address can be a sign of foul play.
  • Rushed or express orders, and those shipped to one address but made on numerous cards should be alarming.
  • Several failed attempts to buy something before passing authorization.

As an entrepreneur, you should be on the lookout not only for the in-person but online con as well because the statistics show that most frauds, almost 39% of reported cases, occur in the United States.


Efficient Tips for Credit Card Fraud Prevention

Information and data company Nielsen predicted that in 2020 scam losses would amount to over $31 billion. This shows how big of a threat this felony is to your bank account and business reputation. Thankfully, you can avoid being a victim by following these tips:

  • Use Address Verification System (AVS)
  • Use chip readers if you have brick and mortar stores because they have EMV technology that is more resistant to theft than magnetic stripes.
  • Secure network access with encryption, limited access to sensitive data, and the best software.
  • Being PCI compliant is one of the best ways to avoid being a victim because a long list of standards will only increase the security levels of your company.

Report Theft Cases Immediately

Being prepared and having high-security measures in place sometimes is not enough, and you can’t prevent illegal actions. That’s why if you suspect that a scam is about to take place, you need to react as fast as possible. Immediately contact the issuer’s authorization center to notify them. While on the phone, hold on to the suspicious plastic, if possible. However, if there is no plastic present, you should contact the processor, bank, and even local authorities to notify them about the criminal activity.

How Visa Can Help Prevent Fraud

Visa, as an issuer, provides a wide range of materials and tools to support scam prevention. Since theft has risen by 18.4% in 2018 and continues to increase, entrepreneurs will only benefit from Visa security protocols.

Data shows that card-not-present scams are 80% more likely to happen than point-of-sales based ones. That’s why you should take extra precautions when you can’t see plastic. Authorize every transaction, and watch for warning signs that indicate some sort of foul play. If you suspect there is illegal activity going on, follow established security procedures because even though Visa constantly improves its systems, some things are up to merchants.

Visa Secure Is a Useful Tool When It Comes to Credit Card Fraud Prevention

There are around 1.06 billion credit cards in use in the US, and 345 million of those are Visa. That being said, Visa is constantly improving and inventing new ways to secure information and protect not only cardholders but also business owners. Visa Secure is one of those solutions designed to make eCommerce transactions even safer. It ensures that the rightful person makes payments. Entrepreneurs who implement this protocol gain an additional security level before authorization, convincing clients that their information is protected.

Protecting Your Business Is a Constant Process

Scammers are always thinking of new ways to exploit other people’s information. Since criminals are evolving, so should entrepreneurs and all the companies working with them. Educate yourself on the latest technologies and prevention measures. You don’t have to do it all on your own, hire professional card processors and merchant service providers to lend you a helping hand in developing and protecting your company.


It never hurts to know how much you can save.

Get a Quote

Step 1 of 2