How to Prevent E-Commerce Website Credit Card Processing Fraud

How to Prevent E-Commerce Credit Card Processing Fraud


E-commerce is booming. Today, there are more online shops than brick-and-mortar ones, and thousands of new e-commerce businesses are popping up every day. In the past 10 years, the shopping behaviour of people around the globe has changed dramatically, with consumers increasingly preferring to buy their goods online. That includes groceries, clothes, and even shoes!

However, this explosion of online consumption leaves retailers and merchants increasingly susceptible to card payment fraud. Online businesses are facing new challenges every day, and with card-not-present transactions increasingly exponentially, there are several red flags to watch out for.

E-commerce website credit card processing fraud can cost small businesses as much as twice the amount of money they take in through online transactions. Frauds are costly, time-consuming, and frustrating for merchants. That’s why you need to stay aware to protect your online business.

How do you do that? Let’s find out.

5 Ways to Safeguard Your Online Business from Transaction Fraud 

Online frauds committed through an e-commerce POS system occur when an individual obtains someone’s credit card number and uses it for unauthorized online purchases. To avoid such scams in conjunction with your e-commerce business, follow these steps:

1. Secure Your Website 

Every online website requires PCI compliance. As part of your PCI compliance, you must check with your processor to verify that TLS (Transport Layer Security) 1.1 or TLS 1.2 replaces the Secure Socket Layer (SSL) and TLS (1.0) security protocols. Your system should also include a firewall, cryptography tools, and antivirus software.

You also need to regularly install updates in order to prevent data breaches due to common vulnerabilities which cannot be patched. It goes without saying that you should always work with a reputable credit card processing company to make this job easier.

2. Fraud-Check Your Transactions 

Make sure that you buy an automated program that screens for transactional frauds or has a built-in screening tool attached to your website shopping cart. Be sure to set up your e-commerce program yourself to screen for red flags during online orders, as you know your business best.

Then, you can either deny those transactions or set them aside for manual fulfillment. In this regard, your employees can verify the authenticity of every transaction.

3. Secure Your Sale 

Make sure you ask your customers to create an account on your website to make their purchases safer. Having a guest checkout option is often risky because customers need to fill in personal information like their name, email, phone number, and address. Thieves could steal that information and purchase merchandise on the customer’s behalf.

Unless the customer is a trusted one, avoid shipping their goods anywhere except the address given on their account.

4. Incorporate Policies that Promote Security 

You can help secure your e-commerce website by limiting administrative control with strong passwords. This will help stop hackers and discourage employee fraud. Having a secure backup system will also help keep you safe in case of fraud. You should be able to back up your business information regularly. Also, make sure not to store more sensitive data than is necessary.

Train your employees to recognize fraudulent website activities. They should be able to understand the order lacks on time. Teach your employees what is normal when it comes to shipping an online order and what is not.

5. Keep a Log of Card Numbers 

Whenever someone tries to enter a card number more than five times, it’s likely to be a fraud. That’s why you need to keep a log of your customers’ credit card details.

Most credit card processors will allow you to review the transaction batches for the day. This is helpful because scammers will attempt too many transactions in a day with multiple credit card numbers. Hence, you should be able to flag these.

Keeping in mind these tips will help you keep fraud at bay. No matter which software you use for your e-commerce website credit card processing, make sure to keep it up to date. Updates often have better security patches so will help avoid breaches. A single server vulnerability, even if it’s as simple as an e-commerce software glitch, can open a backdoor for thieves to steal customer data. And that can immensely damage you as an entrepreneur. In order to avail yourself of the best credit card processing services for your small business in Canada, get in touch with our experts.