Payment Fraud is on the Rise – Prepare Your Small Business
The credit card landscape is changing, but it’s not always for the better.
Since 2015, the US has become accustomed to the shift to chip cards, and while it’s reduced in-person credit card fraud, it’s actually led to an increase in fraudulent online charges. In 2016, there was about $24.71 billion in reported credit card losses worldwide, with 47 percent coming from the US alone.
With credit card fraud only expected to rise, small businesses need know how to detect it, what to do if it happens and how to stop it from happening in the first place.
Suneera Madhani, CEO of payment technology company Fattmerchant, has laid out a credit card fraud survival guide for small business owners.
- How to Recognize Fraudulent Transactions: While it may not always be possible to identify this dangerous activity, there are certain red flags that can raise suspicion. For online transactions, there are several steps business owners can take. First, look at the email address – if there are random sets of numbers in it, it could be a dummy address. Scammers often order in bulk, request the fastest method of shipping, and have several cards linked to one address.
While any one of these could be completely normal, owners should be suspicious of any transactions that set off multiple red flags all at once. - How to Act Once It Happens: Chargebacks can take two to three months to resolve, so business owners should work with their merchant service provider to help them through the process in a timely fashion. It’s important to have this team as a support system to answer any questions.
It’s also vital to keep updated documentation of all transactions run through a business, as this may provide crucial evidence that the transaction in question actually happened, and it will give a better picture of the details around it. - How to Stop It from Happening: Most importantly, there are practices each business should have in place to prevent fraud and save the company. Owners should spend an ample amount of time investigating effective merchant service providers with PCI compliant solutions, up-to-date technology and transparent customer service. As mentioned above, having an effective relationship with a provider creates a support system crucial to fraud protection.
Also, businesses owners should make sure their company, itself, has the latest technology – including EMV-ready card readers. If not, the business will be held responsible for a fraudulent transaction, not the bank or customer.
It’s nearly impossible to avoid card fraud, but by partnering with a merchant services provider who’s there for your business, it’s possible for a business to have enough preventative measures in place to educate their staff and avoid costly chargebacks.
Suneera Madhani is the CEO and co-founder of Fattmerchant, a merchant service provider offering unlimited payment processing with unmatched customer service. Madhani founded the company in 2014 after working in the credit card processing industry for years, wanting to sell a product that customers would be excited about. Fattmerchant offers plans for every business and brings the human touch back to payment processing.
