Rethinking Your Strategy in Combating Credit Card Fraud

Thursday, December 12th, 2019

For retailers, the ability to process credit card transactions eases the process of taking payments from a shopper or client.

Credit cards are a standard payment method among consumers, so processing such transactions gives you a competitive edge. These days, credit card processing is becoming a must-have for merchants offering services either offline (in brick-and-mortars) or online.

Even as you pace towards taking plastic payments, security is one factor you must prioritize. Fraudsters are ever on the hunt for credit card data from businesses that store customer data, which they steal and use to execute various forms of fraud.

But looting credit card data is just one way cybercriminals can target your credit-card accepting store— we will discuss other techniques below. That explains the need to augment your credit-card fraud prevention strategies continually.

Let’s start by understanding the various types of credit card fraud.

Techniques Fraudster Use to Target Credit Cards

Prevention starts with a proper understanding and analysis of the risk profile. Knowing all the ways a scammer would target your credit-card taking business can help you protect it and protect your customers better.

Here are some techniques cybercriminals use:

• Identity theft. It involves a cyber-thief stealing customer personal and financial info, impersonating them, and making illegal purchases.
• Credit card skimming. It involves the use of a skimming device on a business’s physical point of sale, ATMs, or self-service stores to capture customer credit card data for malicious use.
• Direct deposit fraud. It involves a fraudster buying an item illegally with a customer’s direct deposit or debit card information.
• Credit card tumbling. This is where criminals generate random card numbers and begin trying them out on ecommerce stores until they find a legit card number.
• Reverse charge fraud. A criminal makes an illegal purchase with stolen card data, and then later disputes it requesting for a reverse charge transfer to a separate account.

Risks may differ from one business case to the next, but generally, no one is safe. Anyone is a target from startups to long-established companies.

Credit Card Fraud Prevention Strategies

But businesses are not defenseless in this war against cybercriminals. You can employ an array of security tactics to keep your business safer.

Some common techniques include

• Encrypting systems. Encoding or putting into code all data or processes to make them inaccessible without a decryption key.
• Tokenization. Here, you use unique tokens to stand for shopper data, thus protecting their payment info.
• Multi-factor authentication. This security layer prompts a buyer to verify a purchase in multiple ways before allowing a transaction. For instance, as an added security level, you can request a unique passcode sent to the customer’s email or cellphone before permitting any transaction.
• EMV chips. These chips allow a business to shares codes with their third-party processing partners instead of credit card data to keep payment info safe.
• Limiting the right of entry.  Controlling access to systems that store customer information can increase security levels.

Because it is difficult to tell which method fraudsters will use, implementing the above strategies scalably can ensure your business spurn credit-card fraud attempts. Lastly, ensure you use PCI compliant systems to process payments.

Final Words

Don’t start processing card payments before you understand the security risks involved and how to protect yourself. The impact of one attack can be detrimental to your business’s bottom line.