When most people think of fraud, they think of credit card fraud, security breaches, and online theft of digital data. While there are strong reasons for this increased attention to CNP-related fraud, merchants and customers should not forget the threat of debit card fraud.
Many people have a story about a friend who swiped their debit card at a local store and was then later contacted by their bank, alerting them that their debit card had been compromised. Meanwhile, the compromised debit card is still safe in the owner’s wallet, knowing that they have never given out their PIN. Just as easily as credit card fraud happens, so, too, does debit card fraud.
Unfortunately, there is a complacency that so many merchants and customers default to about debit card fraud, which allows fraudsters to continue to steal PIN numbers and copy debit cards.
Merchants and customers must not overlook the threat of debit card fraud. Preventing debit card fraud is possible with adherence to recommendations from banks and customer awareness of the problem.
Merchant Protection from Debit Card Fraud
While customers are the primary victims of debit card fraud, the merchant pays an equally heavy price for this fraud. Remember the friend who had their debit card compromised at a local store? This friend will never return to that store, and, guaranteed, this friend has told everyone he/she knows about the debit card fraud at the local store. Now the merchant has a potentially damaged customer base and is struggling to rebuild brand reputation and customer loyalty.
Compounding these problems are the new issues the merchant has with their issuer over PIN pad security and overall trust. In other words, merchants cannot overlook the real threat of debit card fraud. Keep in mind these fraud prevention measures during debit card purchases and PIN pad security.
- The customer must insert, swipe, or tap their own debit card.
- Keep the PIN pad visible on the counter. Do not take the customer’s debit card and insert it into the machine.
- Treat the PIN pad like cash. Keep it secure and out-of-sight when not in use.
- Regularly inspect the PIN pad, making sure it hasn’t been tampered with or replaced with a decoy.
- Stay up to date with any recommendations from the PIN pad issuer and bank regarding debit card security.
- Contact law enforcement and the bank upon any unusual behavior or changes in the PIN pad.
- Know your employees and be aware for any unusual behavior.
Merchants are expected to comply with all security recommendations from the PIN pad provider and issuing bank. Failure to comply with these recommendations can result in further problems, should the merchant be a victim of debit card fraud.
Protecting Customers from Debit Card Fraud
Most customers aren’t thinking about debit card fraud risks when they use their debit card to pay for a purchase. However, it’s a good idea for merchants to remind customers of how they can protect themselves from fraud risk.
- Make sure there is ample space for customers to use their debit card securely.
- Don’t hesitate to ask other customers to step back from the paying customer.
- Never swipe, insert, or tap the customer’s debit card for them.
- Do not enter the customer’s PIN for them.
- Always give the customer the receipt for the debit card purchase.
The majority of customers appreciate the extra measures to protect them from debit card fraud. These don’t need to be obvious, rather just simple tactics that protect both the customer and the merchant from fraud risk.
Preventing Debit Card Fraud
Just as staying up to date with the latest fraud detection and prevention technology is critical for CNP merchants, it’s equally critical for card-present merchants.
Merchants should use chip-activated terminals to protect themselves and their customers. Most debit cards are chip-activated, allowing customers to tap or hover their debit card or smartwatch to pay for purchases. The tokenization technology in the chip and the terminal encrypt the transaction, providing instant authorization and verification.
Merchants are responsible for updating and maintaining their PIN terminal. If there are problems with the terminal or multiple customers have reported problems with using their debit card, contact the PIN terminal provider.
Learning More About Debit Card Fraud Prevention
The onus is on merchants to protect themselves and their customers from debit card fraud. Merchants who have both m-commerce and brick-and-mortar sales models must be extra vigilant in the face of debit card and credit card fraud. Refer to the following resources to learn more about debit card fraud and best-business fraud prevention approaches.
- Prevent Debit Card Fraud
- Get Ahead of Evolving Fraud & Security Concerns in the Post EMV World
- Secured Data, Reduced Fraud
- Fraud Prevention & Security Technology
You can always contact us to learn how to best protect your business from fraud.