With the evolving conditions, credit unions must be aware of cybersecurity within the “new normal” environment by implementing a comprehensive security plan that will secure their own information as well as the information of their cardholders.
Digital Payment gateways, also known as “payment portals,” are now essential for the security of companies accepting online payments. If you’re beginning a business, fraud on the internet could cost you more than just a single transaction. According to a survey conducted in 2018, Statista states that “US merchants suffered an estimated loss of 6.4 billion dollars due to the loss of fraud involving payment cards.” Small-sized businesses aren’t the only ones to suffer.
Nowadays, e-commerce and the digital economy are expected to expand, which means that even small-scale businesses must think about methods to prevent fraud. Let’s examine some methods that a reliable payment processor can safeguard your business from fraud.
Let’s look at a few efficient ways online payment gateways could adopt to help reduce fraud-related online loss:
Address Verification Service (AVS)
AVS is a reliable security tool to identify fraud online. When consumers purchase products, they should give their billing address as well as the ZIP code. AVS AVS will determine if this address is the same as the bank that issued the card has on its file. In a card-not-present (CNP) transaction, the payment gateway will issue a request for verification to the bank that issued the card.
AVS responds to the AVS reacts by sending a number which helps the merchant know whether the transaction is an exact AVS match. If they do not match, further investigation must be done by confirming your CVV (Card Verification Value) and email address as well as the IP address of the transaction or permitting your payment processor to reject the transaction.
Card Verification Value (CVV)
The CVV (or Card Verification Code ) is the 3-digit or 4-digit code that appears on each credit card. The CVV code should not be kept in the database of the merchant. A CVV filter is an additional security measure that allows only the cardholder to use the card as it only works on the card that is printed. In the event that an order is submitted on your site and the CVV is not compatible with the card, you must let your payment gateway refuse the transaction. Friendly fraud is a danger that is associated with CNP transactions that could cause the possibility of a chargeback. The use of the CVC filter aids merchants in battling fraud and decreasing chargebacks.
Device identification analyses on the computer and not the user who visits your site. It tracks your operating system’s web connection and browser to determine whether an online transaction needs to be accepted, rejected, or flagged. Every device (phones and tablets, computers, and so on) come with a unique fingerprint, which is identical to fingerprints of humans, which assists in identifying fraudulent patterns and determining risks.
Flag Large Transactions
If stolen information is on a card, criminals can try to carry out massive transactions before blocking the card. This can lead to the payment processor closing the processing account of your company, and your company would suffer a significant loss. This could be detrimental for your business (big as or little), in which case you’ll have to cover the cost of allowing fraud to occur.
You can limit the large amount of transactions by establishing an amount in dollars that is an important measure to avoid chargebacks. Additionally, it is possible to limit the amount of failed transactions to the credit card gateway.
Payer Authentication (3-D Secure)
Payment authentication (also known as Verified by Visa (VeB) as well as MasterCard SecureCode is a security measure for cardholders that protects online transactions for customers. This technique allows cardholders to generate a pin (secure code) which is used at checkout to verify the identity of the cardholder. In implementing this payment method, merchants receive protection against chargebacks and reduced interchange rate. This is among the most desired fraud tools for prevention that businesses take advantage of and also protects their interest.
If you’re shipping goods abroad, you should restrict your orders. Be extra cautious with orders that originate from countries that are considered “high-risk”. Customers from these countries are required to contact the company in order to confirm their identity prior to the transaction being processed. A few of the countries with the highest rates of online fraud include Israel, Malaysia, Egypt, Pakistan, Ukraine, Russia, Bulgaria, Romania, Lithuania, Nigeria, and Yugoslavia.
Lockout mechanisms are a kind of fraud prevention system designed to deter criminals who employ automatic card number generator software. These programs are used in underground fraud forums and create many “valid” numbers for credit cards. The scammer will usually attempt numerous numbers from your site until he discovers a few which are genuine and then charge accounts up to the limits of their accounts.
Tools for risk-scoring are constructed using statistical models to identify fraudulent transactions based on various rules. When a payment is processed through your site, the tools will show the possibility of a fraudulent purchase. The higher chance of an order being fraudulent means that you need to examine the transaction. Risk scoring tools offer an evaluation of each case and identify transactions based on rules you select, such as AVS Failure test IP area, anonymous email addresses, billing addresses, and many more.
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