Online sales and billpay are a necessity for modern media companies. They offer convenience for customers and open new revenue streams, but also bring new challenges — particularly the risk of fraud and financial loss. Ecommerce fraud costs businesses billions of dollars annually. In 2021 alone, U.S. retailers lost over $20 billion* to payment fraud, a figure that continues to grow as online shopping expands.
To protect your business, it is essential to leverage the right tools and technologies. Here are five key solutions that can help mitigate ecommerce fraud and keep your business safe.
3D Secure is a fraud prevention tool that allows the merchant and card issuer to exchange transaction data behind the scenes. By analyzing data points, the card issuer can verify that the true account holder is making the transaction. This process increases approval rates while reducing the likelihood of fraud.
One major benefit of 3D Secure is that it shifts the liability for chargebacks from the merchant to the card issuer when a transaction is fully authenticated. For instance, if a fraudulent purchase of $500 is made with a stolen card, your business could lose the money, merchandise and additional fees. However, with 3D Secure, this liability would shift to the card issuer, protecting your business from losses.
Take Action: Consider incorporating 3D Secure into your ad, subscription or ecommerce platforms. Work with a trusted payment provider to ensure seamless integration.
Address Verification Service (AVS) helps verify that the billing address provided by the customer matches the records on file with the card issuer. A mismatch could indicate potential fraud, such as the use of a stolen card.
Take Action: Many payment gateways offer enhanced AVS filtering, automatically rejecting transactions with a mismatched billing address. Review your AVS settings and ensure your policies align with your fraud prevention goals.
The Card Verification Value (CVV or CVC) is the three- or four-digit number printed on most credit and debit cards. When customers provide this code during a transaction, it helps verify that they physically possess the card, adding another layer of security.
Take Action: Implement CVV filtering through your payment gateway. Automatically reject transactions when the CVV does not match, and fine-tune your settings to meet your security requirements.
Geographic filters can help block transactions from certain regions, preventing fraud from high-risk areas. Many payment gateways allow businesses to reject transactions based on the billing address, shipping address or IP address. For example, if your business only ships within the U.S., you can block transactions originating from other countries.
Take Action: Customize your payment gateway’s geographic filters to restrict transactions to your serviceable regions. If you’ve experienced fraud from specific locations in the past, consider blocking those IP addresses.
Velocity filters limit the number of transactions processed from a specific IP address or customer within a set time frame, helping prevent bots or fraudsters from testing stolen cards. Amount filters allow you to set minimum and maximum transaction values, which can help prevent card testing attacks where fraudsters make small purchases to test stolen card information.
Take Action: Implement velocity and amount filters to monitor unusual transaction activity. Setting a high minimum payment amount can help prevent fraudulent microtransactions used in card testing attacks.
Fraud prevention is an ongoing challenge for ecommerce businesses, but leveraging these technologies can significantly reduce your risk. Each tool can be customized based on your specific needs, ensuring that your ecommerce platform is secure while maintaining a positive customer experience. Protecting your business from fraud will not only save you money but also help build trust with your customers.
Interested in learning more? Reach out to the MSG Payment Systems team today at msgpay.com.
*Juniper Research: ECommerce Losses to Online Payment Fraud to Exceed $20 Billion Annually in 2021.” Business Wire, 26 Apr. 2021, www.businesswire.com/news/home/20210425005002/en/Juniper-Research-eCommerce-Losses-to-Online-Payment-Fraud-to-Exceed-20-Billion-Annually-in-2021.
