How to Provide CNP Fraud Protection

Card-not-present, or CNP, transactions represent a major component of nearly every merchant’s revenue stream. CNP transactions happen when a customer buys a product or service with a credit or debit card over the phone, online, or through the mail.
Today’s buyers like the ease of use that comes with entering their credit card data and clicking Buy Now. Merchants appreciate how easy it is to sell to anyone anywhere in the world who has a valid credit card.
Of course, nothing comes for free and the simplicity and freedom that come with these transactions also require heightened attention to CNP fraud protection measures.
It’s important that all merchants, regardless of sales volume and digital traffic, are up to date with the latest in CNP fraud protection. In this article, we’ll look at CNP fraud with explanations on how it happens, how you can prevent it, and provide you with further learning resources.
How Does CNP Fraud Happen?
You are the first line of defense against CNP fraud, making it imperative that you understand how these business crimes occur. It’s wise not to presume that because CNP fraud hasn’t happened to you that it won’t. Fraudsters are preying on this presumption and looking for merchants who do not have the best CNP fraud protection solutions in place.

  • Stolen credit cards. Fraudsters purchase stolen credit card details on the Dark Web and then make fraudulent purchases.
  • Card testing. Criminals make small purchases with their stolen credit card details; these small purchases help them test the viability of the credit card details. These small purchases often go unnoticed and can lead to larger purchases, hurting both the victim of credit card fraud and the merchant.
  • Diverted delivery. Taking advantage of vulnerability in the address verification service (AVS), criminals are able to divert deliveries to an address not connected to the credit card.
  • Online skimming. Online users who login to free and unsecured Wi-Fi networks are easy victims for fraudsters. These fraudsters hack these networks and steal customer data, including passwords, credit card details, phone numbers, and order history. This data is used to mimic the customer.
  • Fraudulent eGift cards. Using stolen credit card details, criminals buy eGift cards and then use these gift cards to make purchases or to sell these eGift cards in secondary marketplaces.

The cumulative impacts of these fraud attacks result in chargebacks, increased bank fees and penalties, lost merchandise, damage to your brand and reputation, and revenue loss. Read on to learn how you can stop CNP fraud with proven fraud prevention techniques.
How Can I Prevent CNP Fraud?
The good news is that the technology and solutions you need to prevent CNP fraud are easily available and accessible. The key is ensuring that you’re using the right technology at the right time in the right way. As you learned above, fraudsters have multiple methods of committing fraud – meaning you need multiple layers of detection and prevention.
You can contact us to learn more about multi-layered CNP fraud prevention solutions, including:

  • Geolocation. Verify the location of the customer with the actual location of the active card
  • Biometric analysis. Compare the customer’s fingerprint with that of the cardholder
  • Address verification service. The issuer compares the addresses provided during the transaction
  • CVV. Additional credit card security code required during the final payment authorization
  • IP Intelligence. Deep analysis of the IP address used for the transaction to monitor possible risks associated with this location
  • Device intelligence. Deep packet inspection and proxy piercing capabilities to expose specific identifying details of the connected device submitting the transaction
  • 3 Domain Secure. A cardholder authentication protocol for e-commerce transactions and CNP purchases
  • Merchant co-op. New orders are compared against millions of orders taken by other merchants
  • SSL. Secure encrypted communication protocols between devices and payment solutions

The even better news is that you have the power and support to stand up to fraudsters and put an end to CNP fraud. The more merchants who take action, the better. With the right technology, you can stay ahead of fraudsters and you do not need to accept CNP fraud and chargebacks as part of doing business.
Learning More About CNP Fraud
We’ve put together some key Verifi resources that can help you learn more about CNP fraud and how it can impact your business and customers. Remember to browse our Resource Center and Knowledge Base to learn more about chargebacks, payment solutions, and fraud risk.

Contact us to learn more about Verifi solutions and to talk to our experts – make sure your business and customers are protected. Remember, you are the first line of defense against CNP fraud.