6 Essential Fraud Solution Tools for Online Retailers
In today’s multichannel retailing environment card transactions continue to grow rapidly. The combined total of payments in the UK is expected to almost double, from £9.9bn in 2012 to £17.3bn in 2022, according to the UK Cards Association.
Card fraud is big business, and it’s vital that you take steps to deter would-be fraudsters. Below we list some solutions to help protect yourself and your customers.
Manually checking each transaction would be anything but productive and cost effective. Fortunately there are a number of counter-fraud options available to you, many of which come as standard when you set up a payment gateway through an online payment provider.
PCI DSS Compliance
PCI DSS is the Payment Card Industry Data Security Standard. All companies that process, store or transmit credit card information have to do so in a secure environment. This is relevant to both your online payment provider and your business as a merchant. Make sure your online payment provider is part of the PCI DSS compliance standard and can assist you with being compliant.
Also known as ‘Verified by Visa’, ‘American Express SafeKey’ or ‘MasterCard SecureCode’,3-D Secure previously required users to enter a password to authenticate a purchase.
The longstanding criticism of 3-D Secure was that passwords were easily circumnavigated by phishing scams and merchants believed that schemes such as Verified by Visa inconvenienced users without offering any extra security.
In a move welcomed by security experts and, I would imagine, customers alike, 2015 will see the introduction of 3-D Secure 2.0. This new version removes the need for static passwords and instead authentication will initially be sent to a pre-registered phone before the scheme moves towards its long-term goal of placing more emphasis on biometrics.
Address Verification Service (AVS)
Address verification services enable merchants to check the shopper’s billing address and country matches against the shopper’s card issuer. This tool is not widely available outside of the UK, US and Canada. If you want to go a step further, only deliver goods to the billing address.
Card Security Code (CSC)
This is more commonly known as the card CVV/CVV2 number, which is generally found on the back of most cards (although it’s on front of American Express cards). This again is checked against the card issuer’s records. This number is never used on any receipt, letters or other documentation and so adds an additional security layer above address verification.
Tokenisation is a process that divides input text into units called tokens. During the transaction process card details are captured and encrypted to tokens; these are then decrypted on a secure server. Tokens can then be used in place of the customer’s card details. Both of these solutions reduce your PCI DSS compliance costs and eliminate both the need for you to transmit sensitive card details to your payment provider and the need for your customers to repeatedly enter their debit and credit card details, making future payments easier for your customers. Amazon’s 1 Click Ordering is a good example of this.
If you would like any more information on this topic, or are thinking of bolstering your fraud prevention then please call us today on 0333 240 6000 and speak with one of our fraud specialists to discuss how we can provide the best counter-fraud solution for your business.