How Credit Card Merchants Can Fight Fraud

Restaurants, retail stores and e-commerce websites that accept credit cards for business

enjoy a great deal of benefits with credit card merchant accounts, including increased sales and a more streamlined and efficient payment process. Accepting major credit cards also comes with a great responsibility for merchants, as they must protect customers' sensitive information in order to keep consumers and their business safe from fraud and fines. Merchants must be aware of the types of credit card fraud that occurs, as well as understand and implement the security features built to protect credit card information. Keeping customers educated on how to protect information also helps in the fight against credit card fraud. Learn more below.

Types of Fraud:

Understanding different types of credit card fraud helps merchants identify and stop fraud from occurring. Merchants should know how to spot counterfeit credit cardsby knowing what indicators to look for that prove a credit card's authenticity. Certain colors, logos, embossing and codes help merchants tell real cards from fake cards. Identity theft is a type of fraud that occurs when a thief obtains information about a person to open bank accounts, make large purchases and even apply for jobs. Phishing scams are used to obtain passwords and account numbers by sending e-mails that appear to be from friends, colleagues or legitimate companies. Knowing the types of fraud can help merchants keep customers aware and implement the correct security features.

Security Features:

There are many security features that credit card merchants can use to keep credit card information safe. Tokenization, for example, replaces credit card numbers with a "Token," or code, during the payment process. Credit card merchants reduce liability because the actual credit card numbers are never accessible, and should a security breach or fraud occur, thieves will only get useless tokens rather than sensitive information. Address Verification System, or AVS, verifies the credit card user is the actual account holder by asking for the user's billing address and zip code. E-commerce sites often require a Card Verification Value, or CVV, a code that appears on the front or back of the card, while simply asking for a signature and form of identification can help avoid fraud during face-to-face transactions.

Keeping Consumers Aware:

In addition to complying with PCI standards and using security features to protect their business, merchants should help educate their customers on how to keep credit card information safe. Consumers should never give their passwords, account numbers or personal identification numbers (PINs) to anyone. Important documents should be shredded rather than simply tossed in the trash. Customers should also understand types of fraud, such as phishing scams and counterfeit cards, in order to keep information safe and avoid a devastating financial loss.

by: Julie Henaghan

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