As e-commerce continues to grow in Canada and more Canadian businesses rely on online credit card processing, so to has fraudulent online purchasing risen. According to the Canadian Bankers Association, while Canadians have seen a drop in the cost related lost, stolen and counterfeit domestic credit cards from 2008 compared to 2015 there has been a drastic increase in fraud related to card not present transactions (Fraudulent e-commerce, telephone and mail purchases). In fact, Canadians have seen a 318% increase in the cost of card not present credit card fraud, over 247% increase in fraudulent accounts and a 20.49% increase in the average cost per account due to fraudulent charges.
Card not present fraudulent purchases cost Canadian Business Owners over $537 million CAD in 2015 alone. As a business owner, you need to have an online payment gateway to be competitive. However, accepting orders online can potentially cost your business hundreds or thousands of dollars if you fall prey to fraudulent purchases. As a business owner, you can take a proactive approach against credit card fraud by following the steps below
Monitor orders for inconsistencies in billing information as these inconsistencies may be a red flags for fraud. These red flags may include differing shipping, billing, and IP addresses.
Use the Address Verification System (AVS). AVS systems help reduce the risk of fraud as AVS systems request the credit card billing address and compare it to the billing address given by the customer before the purchase can be fully processed. If the address does not match the credit card the transaction will not go through.
Require the Card Verification Value (CVV) for each purchase. The card verification value is a 3 or 4 digit number on a credit card. Fraudulent customers will not have the CVV unless they have stolen the physical card and therefore requiring the CVV can prevent fraudulent purchases.