Card Not Present Sales and Preventing Fraud

How often do you think about fraud and your business? Hopefully, it’s something that you do think about but don’t obsess about. It’s important to find the right balance between too much emphasis on a prevention strategy and being too lenient with your approach.
Given the current state of today’s evolving payment landscape, your card not present fraud prevention strategy is something that may require some serious thought. The entire team at Verifi is focused on making it easier for you to run your business and to focus on what you do best. We would like to offer some guidance on how you can best manage your fraud prevention strategy, so we can do some of the heavy lifting for you.
Finding the Balance in Your Card Not Present Fraud Prevention Strategy
Ignoring the risks that fraud poses to your business can have disastrous consequences. It can be a daunting task finding the right amount of fraud prevention, especially in light of the glut of news reports about consumer fraud and card not present fraud we see so often.
Your customers may be concerned about doing business with card not present merchants. Your suppliers and third-party partners become anxious over the viability of your business. Your investors, credit card issuers, and your bank may offer up probing inquiries about your fraud prevention strategy and how you plan to respond in the event of a breach.
So, what is the solution? Taking on a tempered and balanced approach allows you to mix and match different fraud prevention tools to find the ideal solution for your business. What works for your competitor or for another business may not necessarily work for you. Just as you have a customized website, you need a customized fraud prevention strategy.
When thinking about your card not present fraud prevention strategy, consider our guidelines and think about how these do or do not apply to your business:

  • Use the right tools for your business  This is where the customization is very important. Some of the tools we recommend for our clients include digital fingerprinting, device fingerprinting, merchant co-op, 3-D secure, post-billing chargeback alerts, facial recognition, and voice verification. Working with you, we can determine which level of security you need to enforce a balanced fraud prevention strategy. Remember, when it comes to finding the right tool, selecting the cheapest option, the most popular option, or the most innovative option are, well, not necessarily the right options. Your choice must be the best option for your company.
  • Use analytics to highlight the good and the not-so-good  Take advantage of data analysis so you can learn what is working and not working in your fraud prevention strategy. Using data analysis combined with pre- and post-sale views ensures that you are alerted to likely fraud risks before it can happen. Know who you’re doing business with, what their purchasing habits and history are, and fine-tune your fraud prevention methods to balance the risk/reward of your strategy. It’s too easy to enforce an overly restrictive strategy, resulting in lost sales, a frustrating customer experience, and ultimately overall revenue loss.
  • Move quickly to prevent fraud from happening  There is a definite need for speed here. The longer you wait to react and make a decision about your card not present fraud prevention strategy, the greater the risk to your business. Merely thinking about recent news reports on malware and hacking that have occurred, and hoping this won’t happen to your company and network, won’t do. Most companies that believed they were protected found out the hard way that their fraud prevention strategy was not up-to-date, and as a result became targeted victims by fraudsters and hackers. It’s not easy to maintain pace with the changes in technology. While we can’t ever know what is coming next, we can predict the trends using the available technology and determine how you could be attacked, and then to provide you with a layered solution that works to prevent an attack.

Your Card Not Present Fraud Prevention Strategy
Remember, it’s your fraud prevention strategy. Perhaps you’ve experienced fraud due to stolen payment card data or fraudsters who have learned how to work around cookies—this points to learning about digital and device fingerprinting solutions. Or maybe you’ve had repeat chargeback fraud attacks from what appear to be legitimate marketing channels—this could mean you need to take advantage of merchant co-op. After reviewing your analytics and the technology you currently have in place, our team of experts might very well decide that you may not need any of these tools in place but rather something completely different.
We can’t tell you exactly what to do. However, we can tell you this: you need to customize your card not present fraud prevention strategy to employ the right tools, at the right level, at the right situation.