4 Ways Businesses Can Reduce Payment Fraud
Thousands of businesses fall victim to payment fraud every year, and this isn’t a problem that is going away anytime soon. Fraudsters are getting more and more sophisticated, and businesses have to put systems in place to protect themselves against their increasingly efficient methods. Thankfully, we have tons of tools at our disposal that allow us to counteract payment fraud. You also have to get your team involved and teach them how to identify possible signs of fraud and prevent fraudulent payments. Let’s take a look at a few ways businesses can reduce payment fraud.
Privilege Safe Payment Tactics
The first thing you have to do is make sure that you only use safe payment methods. If most of your sales are made online, then you need to make sure that the system you use has enough security features. It also needs to have a solid track record when it comes to solving merchant complaints.
Get as Much Information from Your Customers as Possible
Forcing prospective customers to sign up and divulge information before they can buy from your website can be a double-edged sword. On the one hand, it might affect your conversion rates negatively, but you will also be able to significantly reduce the number of fraudulent payments you get.
It is up to you to see if the drop in conversion is worth it. If you’re getting lots of fraud and the amounts are big, then this is something you should consider as the cost of a few lost sales will be much lower than what you’re losing from fraud.
Increase Verification Measures
If you don’t want to make your clients sign up before they buy from you, you will need to use strong customer authentication methods. You need to make sure that you know exactly who is buying from you. That’s because fraudsters today use all sorts of mediums to make fraudulent payments. They are not just using credit cards now, but also mobile phones and even seemingly safe methods like PayPal.
Advanced authentication methods could allow you to verify that the person purchasing using a cell phone is truly the owner of that phone, for instance. You could even ask the buyer to use voice commands or even fingerprints for authentication. If you have a solid authentication in place and do everything correctly, it will be very hard for people to defraud you.
Monitor IP Addresses and Compare Physical Address with Billing
If you notice that an order has different “ship to” and “bill to” addresses, you need to be extra careful. This is not always a sign of fraud, but it’s still a red flag. You should also compare the IP address with the credit card information. If there are any discrepancies there, be careful. You could also block certain IPs from buying from your site by changing your payment settings. You could use this to block IPs coming from countries you don’t ship to.
These are all simple ways that you can keep payment fraud to a minimum. Always work on improving the security of your website and train people on your team to sniff out fraud attempts fast.