Online credit card fraud protection

Credit card fraud for online purchases seems to be increasing both in scale and dollar amounts day by day. While this problem may seem to be out of control basic steps can be taken by both consumers and merchants to stem the flow. The article below contains information that is intended for merchants who process transactions over the web.

Having worked with companies using shopping carts and online payment systems, I have learned that protecting consumers and businesses is relatively simple. The scope of protection extends beyond the payment system and directly into the hands of merchants that receive payments online.

Unfortunately, credit card fraud exists to the degree that it does primarily because merchants, whether brick and mortar, or on the internet, do not take the necessary precautions to verify the authenticity of the purchasers.

Verify online purchases by contacting the person who created it.
If you cannot make contact with your customer by phone or email, cancel the order and send a response explaining why the purchase was cancelled. Don't make the assumption that a website is simply a tool to automate the purchasing process. Criminals rely on this assumption and exploit it often.

Make sure that personal data sent to and from your website is sent over an encrypted connection (HTTPS).
This is yet another step that makes access to personal information more difficult to those who do bad things with it. Although there is a slight financial cost for doing this it is well worth the investment. Savvy web surfers look for this and may not make purchases from your site if their information is transmitted over a non-encrypted connection.

Track and check the country of origin of the purchase against the credit card data.
Transactions that involve a different country than the address of the credit card are typically fraud and should be treated as such until it can be proven that they are legitimate. If you do not have the ability to track this data with your ecommerce software contact your developer team or IT staff to determine how to track this information.

Report suspicious credit card transactions.
If you suspect that a credit card is being used fraudulently contact the owner of the credit card or the credit card company.

Don't store customer financial data in your website database.
Unless you have an experienced IT staff that understands data security and the steps to keep this kind of information safe just don't do it. There are other ways to track data which don't reveal or expose critical information. Contact your developer or IT staff if you have specific questions regarding your customer information security policies.

Ensuring your purchases are legitimate helps to reduce the incidence of credit card fraud and conveys to your customer that you care about them and not just their money.