How to protect your money

Nowadays almost one in two inhabitants of our Planet uses credit card every day including e-payment. But not everyone understands and follows security policy of the card usage. It is the main reason of the credit card fraud.

Let’s look further into the issue. Fraud is relatively popular kind of cheating that implies illegal credit card transactions. It is widely spread because the crook can operate from any corner of the planet irrespective of the cardholder’s place of living or the registration of the merchant’s site. As a rule start-up businesses first of all think about the future profit but they are not familiar with consequences caused by fraud.

To protect the funds, each person should know how the crook can get the whole credit card information:
-Customer pays for the goods on a suspicious unverified site or the one with a low level of protection, so the crook can intercept the credit card data.
-While using an ATM with built in skimmer, the crook gets the card information without cardholder’s knowing about it.
-If the customer paid for the goods through an e-wallet using public Wi-Fi, that allows the crook to manage all the cards tied to the e-wallet.

What consequences are waiting for us?
The cardholder will sound the alarm when he notices that funds from his card disappeared. Then he will request the issuing bank for refund money cleared without his approving. This process is known as chargeback. The merchant is the only person who is responsible for assumption of illegal payments. It is he, who should take necessary steps to resist fraud, otherwise, the bank will fine him. If the number of chargebacks exceeds the acceptable limit, then it is possible to lose payment processing at all.

Ways to fight card fraud.
Merchant is responsible to confirm payments, so he should thoroughly think about development of anti-fraud system, which identifies crook and will not allow him to pay on the site.
If the customer is not verified, you should check if his IP is unique and geo-IP coincides with billing country, because it is possible that the crook pays with the US card but he is in China himself.
International payment systems Visa (Verified by Visa) and MasterCard (MasterCard SecureCode) developed a modern 3D Secure technology, that allows to identify cardholder with one-time compulsory password, which is sent by bank in SMS to the phone number tied to the card. If the payment was completed using this protocol then all responsibility for transaction falls on the issuing bank.

All clients should follow CDD (Customer Due Diligence) procedure to reduce fraud-attack possibility. It is way to confirm(prove) the identity, address of residence by documents (passport, driving license, Certificate of Temporary Citizenship, photo of cards and so on). Only state documents are valid.
Create a «black list», that will block transactions on the stolen card numbers and save the names of unscrupulous customers, who committed fraudulent payments on your site.

The best thing to do is to care for your business security beforehand and reduce the risk of fraudulent transactions which lead to chargebacks. Everyone knows that «penny-wise, pound foolish», so you should not save on customer and order verification.