Maintaining any business is a bit of juggling act. Online merchants often face even greater challenges because they face more incidents of true fraud and friendly fraud.
It is critical that ecommerce merchants keep fraud in check and factor in expenses for money lost on shipping, lost products, chargeback fees, and probable losses of merchant accounts. To stay in business, merchants must take online fraud prevention seriously.
Check out these ways to prevent online fraud:
Use Data: The scads of collected data on consumers and their spending habits should be analyzed. The information can be used to find fraud patterns to find possibilities and rends in the future. Predictive data analysis won’t tell you the type of fraud you are encountering, but it can detect it.
Enlist a Seasoned Group of Fraud Analysts: Fraud analysts can help reduce and prevent fraud by tracking patterns and coming up with solutions. They will have tips you can use to combat fraud.
Train and Use Your Customer Support Team: Customer support is a direct line between you and your customers. Use their knowledge to detect possible cases of fraud.
Every Day, Monitor Transactions and Settle Bank Accounts: Every business needs to know their shoppers and the way they shop. They should know how often they shop, and how much they spend during a typical shopping trip. By going over accounts and transactions regularly, you will notice when things aren’t right, like inconsistent billing and shipping information. Additionally, merchants should use tools that track customer IP addresses and alert them to any addresses that are known for making fraudulent purchases. The right combination of tools and procedures can reduce incidents of fraud at any business.
Implement a Behavioral Analysis Method: Merchants have started using behavioral analysis to fight fraud and keep up on the trends in fraud. Behavior analysis looks for patterns that are inherent to specific users. Instead of relying, for example, a consumer’s ability to authenticate their account by providing their mother’s maiden name, merchants use tools to indicate whether a user is who they say they are. A good example of the analysis of shopping habits. For example, if a particular consumer usually shops during their lunch breaks, but suddenly makes a huge purchase at 3 a.m., it could be a sign of fraud. This type of analysis requires a significant amount of information about the consumer so a template can be crafted. Then, a tool is used to rate a customer’s response translating it from normal to fraudulent. The tool will indicate whether a transaction is false based on a percentage. If the percentage equals 90% or more, the tool blocks the person from making the transaction.
In Conclusion
Fraudsters have become increasingly more sophisticated as merchants tighten up their security and online fraud prevention measures. However, taking the steps mentioned here can help limit fraud, which is an important way to protect your business from chargebacks. Too many chargebacks will cost you your merchant account business, and as an online business, your ability to continue operating your business. The best way to maintain a healthy business is to take action and prepare for the worst.
Apply for Merchant Account Services
If you are in need of a merchant account or a payment gateway, submit an application to eMerchantBroker.com. EMB works with merchants in high-risk sectors, and it works with businesses that have no credit card histories. Apply online today to get started.