While ecommerce is a huge boon for small businesses, there is also a growing risk of Ecommerce fraud. Fraudsters are aware that small businesses usually cannot afford to implement sophisticated fraud detection protocols. Small companies are hence at a greater risk of online fraud. There are various ecommerce fraud prevention techniques that every business, big or small, must implement.
As per the Association of Certified Fraud Examiners, approximately 50% of small businesses become victims of fraud at some point, and that costs them an average of $114,000 each time. Even accepting a fraudulent payment can put you in trouble as you will be held financially responsible for the loss. Listed below are six ecommerce fraud prevention techniques and best practices.
Choosing an Ecommerce Platform that is Secure
It is imperative to place your ecommerce site on a platform that uses a sophisticated object-orientated programming language.
Talking about the various open source ecommerce platforms they have used in the past, Shawn Hess, software development manager at VoIP Supply said:
Our administration panel is inaccessible to attackers because it’s only available on our internal network and completely removed from our public facing servers. Additionally, it has a secondary authentication that authenticates users with our internal Windows network.
PCI Compliance and Secure Connection for Online Checkout
Using strong Secure Sockets Layer (SSL) authentication for Web and data protection is a must. SSL authentication is required to authenticate the identity of your business and encrypt the data in transit. It helps protect you and your customers from getting their important data stolen.
It is also a good idea to integrate the stronger Extended Validation Secure Sockets Layer (EV SSL), SSL security seal, and URL green bar to ensure that your customers are ensured of the safety of your website.
Address Verification (AVS) and Card Code Verification (CVV)
AVS is one of the standard Ecommerce fraud prevention techniques. It verifies the billing address that of what is currently on file with the credit card company. CVV is another security feature which is meant to reduce the card-not-present (CNP) fraud. It has many names:
• MasterCard – CVC 2
• Visa – CVV2
• American Express – 4 digits above card number – CID
• Discover – CID
According to PCI rules, it is impossible to store the CVV, and that is why it is so effective in reducing fraud. There is no way for fraudsters to get hold of your CVV number until of course they steal the physical credit card.
AVS on the other hand is a fraud tool that is included in most payment processing solutions. However, you need to check with your payment processor to ensure it is supported.
Billing Address and IP Location Match
Watch out for IP addresses from overseas that do not match with the billing address. IP-Lookup.net is a site that helps in manual research of an IP address. It is best to prevent transactions from IP addresses, which comes from countries that you do not ship.
As part of ecommerce fraud prevention techniques, some eCommerce platforms provide security functionality that recognizes suspicious IP addresses or discrepancies automatically.
Ask for Strong Passwords
While businesses have the responsibility of keeping customer information safe on the back-end, customers must be asked to include a minimum number of characters and symbols as passwords to ensure that it is complex enough. Fraudsters will not be able to access long and complex logins.
PCI Compliance and Ecommerce Store
Payment Card Industry Security Standards Council (PCI SSC) has come up with a set of best practices in order to safeguard consumer data. PCI SSC is a forum of global brands that includes Visa, American Express, and MasterCard.
PCI compliance is strictly enforced and is not optional. Check out the PCI Security Standards website for more details. Many payment processors like PayPal and BigCommerce build PCI compliance into the solutions they offer businesses of all sizes.
In order to minimize online fraud and safeguard your business, it is very critical that you are aware of Ecommerce fraud prevention techniques. It is also imperative that you implement stringent security measures to ensure safety of your business and customer data.