The Importance of Security and Fraud Prevention for Payment Processing

Tuesday, August 29th, 2017

The following facts shed some light on the importance of security in credit card payments, and why fraud preventive measures should be among your key considerations when choosing a merchant account provider.

Credit cards are not secure

If you want your business to be able to accept credit cards payments, the first thing to understand is that credit cards are not exactly safe. Customer information can be compromised during almost every step of the transaction.

The Internet is regarded as the least secure form of making credit card payments. The lack of face-to-face interaction with customers means it’s always a challenge to determine if the buyer is making a legitimate order, or whether they’re in possession of the actual credit card. Then there’s the ever-present risk of getting customer information stolen by cyber criminals when your website or server is breached, which demands even more intricate preventive measures.
Mobile transactions can also be risky if the app you’re using cannot guarantee security. And as for POS terminals, information travelling across lines can be intercepted and recorded by criminals. The terminals themselves can also store log PINs and other financial records.

Customers value security

The convenience of credit cards has made them the preferred method of making payments for many shoppers, but that doesn’t mean they’re oblivious to the risks involved. Instead, they put their trust in the merchant’s ability to offer them secure transactions.

With fraud and identity theft cases on the rise every day, customers are becoming more wary and cautious. If your business doesn’t seem to offer a high level of security, they’re less likely to shop with you.

Security issues can cost you more than the customer
Card-issuing agencies now have stringent policies that serve to protect the cardholder from credit card fraud, most of which put pressure on merchants. For instance, if criminals make orders with a stolen credit card and you deliver the products, you stand to lose the products entirely.

The cardholder’s bank may then look to you for reimbursement if it’s found that a failure on your end caused the theft. Your payment processor will likely also terminate your merchant account on learning of the fraud, and finding a new company won’t be easy.

Therefore, while fraud is often just an inconvenience for shoppers, one serious case could spell the end of your business.

Being more secure

One thing you can do to enhance security is to uphold stellar practices of handling sensitive customer information. These can include safe storage solutions and solid verification processes. On the other hand, your E-commerce website should not overwhelm the client with elaborate authentication steps. It’s up to you to find the best balance between safety and smooth checkouts.

Perhaps the best step to take, however, is to ensure you have secure payment processing directly from your processor. Always check that your merchant account provider is PCI-compliant, and ask about the security measures they incorporate into their services, as well as their policies in the event of a breach.

Summary

The security of credit card transactions can make or break a business. To avoid the repercussions that come with data breaches, stolen credit cards and identity theft, always strive to assure your customers the highest standards of fraud prevention.