Credit card fraud has been a longstanding problem around the world. Unfortunately, it seems like this problem isn’t going away any time soon.
In fact, it continues to evolve so, as a business, you need to keep up and partner with high-risk merchant account providers so you can protect your business.
The current situation
Many people and businesses have been victims of credit card fraud at some point. From a charge at a restaurant you never eat at to a massive online purchase on Amazon, or from a business perspective, customers filing fraudulent chargebacks while retaining your goods or services, credit card fraud is certainly a lot of hassle.
Customers have to deal with disputing those charges while businesses need to deal with the investigation into chargeback or other claims as well as increasing merchant fees due to the chargeback rate changes caused by payment fraud.
Unfortunately, things are only getting worse; credit card fraud increased by a staggering 69% in 2021 alone, which cost businesses more than $9 billion.
According to fraud and security experts, this growing industry is not only benefiting individuals, it is also funding criminals and large-scale gangs around the world.
John Buzzard, a top analyst at Javelin Strategy and Research, says that gangs that used to do business in drugs and trafficking are now switching to credit card fraud as one of their main sources of business because it is less risky on their end and they don’t have to endure hefty criminal charges if they ever get caught.
The huge shift in online shopping also gave these criminals more motivation to explore credit card fraud. Even traditional fraudsters are now taking their crimes online.
How to protect your business
While credit card fraud has become very rampant, there are still ways to protect your business from it:
- Find a reliable payment processing partner. This should be the first step in protecting your business against credit card fraud. Having the right merchant providers that offer top-tier security measures will help you detect suspicious transactions and avoid them before they even hurt your business.
- Train your employees. Your employees play a big role in preventing credit card fraud, whether in your physical or online store. Training them to detect and report any suspicious purchases will not only help you alert the customer’s bank but also cancel the payment altogether, so you can avoid hefty chargebacks later on.
- Invest in technology. Major credit card companies like Visa and Mastercard have been investing in all types of technology like machine learning and Artificial Intelligence (AI) to be able to protect their customers from credit card fraud. Although there’s still a lot to learn and develop before these innovations could completely detect fraudsters, these steps are a good start to putting a stop to these crimes.
Whether you’re a small or big business, learning all about credit card fraud and taking the necessary measures to prevent it is an important step toward protecting your company in the long run. Make sure that you follow these tips and continue updating yourself on the evolution of these crimes.