How Your Business Can Safeguard Against Digital Payment Fraud

Over the past decade, internet shopping has increased exponentially, making the lives of people throughout the world so much more convenient and easy.

Unfortunately, with this added convenience comes the risk of fraud when making payment on a digital platform. Consumers should therefore pay careful attention when making payment online, but sadly preventing being defrauded is more difficult than it sounds. 

At Host Merchant Services, we have some important tips on how to help combat digital payment fraud and this article will discuss the best ways to do this. 

Why is it so easy for cyber criminals to defraud internet shoppers?

When shopping online and creating a digital account, you need to give out a certain amount of your personal information (including your name, address, date of birth, etc). It is when this information comes into the wrong hands that it becomes a problem. 

Cyber criminals are always one step ahead of the authorities and are always finding innovative ways to obtain your personal information, credit card details and more. 

How can I prevent fraud? 

The good news is that if you take certain steps to safeguard your information, this can go a long way in preventing digital fraud. 

This can be done as follows:

Be aware of where you are purchasing from:

This may sound obvious but we recommend only buying from reputable online stores, such as Amazon, big box stores and other online platforms that you know and trust. 

Make sure that you do not click on any links from third party websites or links in an email- rather go to the website directly. 

An easy way to determine if an online store is legitimate or not is to find out if their identity verification process (when signing in, making payment, etc) is stringent enough. 

Train your call center properly:

Your call center should be trained properly in being able to recognize fraudsters. Any 

call center agent should be aware that cyber criminals are experts at obtaining the 

personal information of their victims and this should be taken into consideration when 

dealing with so-called “clients”.

Criminals who are involved in phishing schemes are known to contact call centers, providing them with all the relevant information to gain access to the account. Remember that if something sounds suspect, it often is and it is worth being cautious. 

Customers should sign up for bank alerts for all transactions:

Cyber criminals are known to act swiftly and rapidly once they have gained access to a credit card or bank account. Within a matter of hours, they will have been able to deplete a bank account completely and ring up a huge credit card bill.

It is therefore advisable to always encourage customers to sign up for alerts from their bank whenever a transaction is processed. This way, if anything suspicious is noticed, it can be dealt with immediately before more serious damage is done. 

Use trusted channels for credit card payments:

Most modern credit and debit cards have EMV chips (in addition to tokenization) on them to enhance the security features. These tokens make it very difficult (if not impossible) for fraudsters to gain access to a customer’s data. 

Tokenization works very well and creates a unique token for each transaction. This means that they are useless when a criminal gains access to it, unlike the stealing of static credit card information.

Because criminals are always one step ahead of us, they are now trying to make use of the static credit card information that they have stolen to commit fraud. It is for this reason that it is better to use all the safety measures that your bank has in place for the verification of transactions. For example, always try and use the bank’s text messaging facility, or use their app’s password verification method to be on the safe side. 

By making use of these additional security methods and measures, you are greatly reducing the chances of being the victim of a phishing scheme as this makes it much more difficult for them. In addition, the cyber criminals will be automatically blocked when they try and fail to authenticate a transaction. 

Consider using the new 3D Secure 2.0 technology:

While tokenization is the first prize when trying to combat digital payment fraud, this can take quite some time to implement.

The good news is that you can take other steps to prevent payment fraud in the meantime. One of these steps includes making use of the new 3D secure 2.0 technology. 

This state-of-the-art technology involves improving the communication of the data between issuers and merchants in order to create a one-of-a-kind risk profile for every transaction.

There are many benefits to using this kind of technology and it helps to create a safer payment transaction and improves the level of customer service, at the same time. 

Out-of-Wallet information can be used:

It is a well-known fact that when verifying personal data, this information never changes. For instance, the last four digits of your social security number will always be the same, as will your date of birth. 

Out-of-Wallet information involves your online shopping behavior and asks questions such as, “what was the current withdraw?"

It is very difficult for a fraudster gain access to this information and it is for this reason that it should be used.

Author bio: Hannah Cohen is a Senior Relationship Manager with Host Merchant Services. A graduate of University of Michigan, Hannah has extensive experience in the merchant services industry.  At Host Merchant Services, she specializes in working with small to medium sized businesses to streamline their payment processing, reduce costs, and to implement payment technology to enhance customer experiences and drive revenue.