Fighting fraud is a complex, expensive problem, and if not proactively managed it can escalate quickly. When thinking about fighting fraud, businesses should be equipped with credit card processing solutions that safeguard business data and the credentials of customers.
Understanding the fraud-fighting equation is a necessity to fight chargebacks — which can be caused by true fraud, friendly fraud, or by a merchant error. It’s common for a customer to not understand a statement charge, which leads them to dispute the transaction as fraud (AKA: Friendly fraud). Regardless of if the charge was true fraud, or reported by mistake, the burden falls on the eCommerce merchant — which can typically cost them a fee of between $15-25 per transaction.
This fast-growing problem continues to plague business’s credit card processing at an alarming rate. Data from the LexisNexis True Cost of Fraud study shows that in 2014, fraud cost U.S. retailers $32 billion. Another problem? ECommerce Merchants are so afraid of fraud that they are often over protecting themselves, which results in legitimate charges being flagged as chargebacks.
So what’s a business to do? By implementing the following three credit card processing solutions, any eCommerce merchant can be well equipped to prevent chargebacks and fight fraud before it escalates deep into your business’s bottom line.
Rely On Payment Gateway Fraud Filters
By working with a payment gateway solution offered by Payline, eCommerce merchants can be equipped with credit card processing fraud prevention tools that enable your systems to flag troublesome transactions. For example, in cases where the billing address doesn’t match the shipping, or the address the issuer has on file, the system would be able to properly identify and flag the transaction.
Payline offers solutions through Verifi and Ethoca to keep eCommerce merchants chargebacks low, and also to secure your payments from the threat of fraud. Our payment gateway has the necessary built-in security and fraud protection that’s seamlessly integrated into the credit card processing payment experience, providing reassurance that your company and customers are protected.
Determine When, How and If a Manual Review Process is Appropriate
Fighting chargebacks can also involve a manual review process for specific types of purchases that are more likely to be flagged for fraud. While this is an accurate way to ensure your payment gateway filters are working properly, and fraud can be flagged before it becomes a chargeback, this isn’t the easiest way for fighting fraud. While robust fraud prevention tools and manual reviews are pivotal, the challenge of minimizing online fraud alerts without harming legitimate transactions involves continuous optimization of fraud detection systems. Applying advanced technology and accurate data can help in significantly reducing false positives, thereby enhancing both customer satisfaction and operational efficiency.
The obviously drawback to this approach for effective credit card processing is the fact that the manual review process is complex and time consuming. Without an expert on hand to manage this process, it can slow down your sales and can create more issues in the long run.
Data shows that, on average, 26-percent of all transactions are put through the manual review process. But by working with a company like Payline — which enables the fraud-fighting tools of Verifi and Ethoca — your business can take the pain and hassle out of the chargeback fighting process and find better ways to combat fraud. While the concept of manual reviews, like relying on Google to find verifiable data on the customer, are sometimes the only way to enable accurate credit card processing for a specific transaction, this should not be a common practice.
Partner Up and Find the Right Credit Card Processing Prevention Solutions for Fighting Fraud
Combatting fraud should not, and cannot, be done alone. Without relying on a third-party company that’s fully equipped with fraud prevention technologies to reduce your fraud liability, you’re putting your business at risk. Working with Payline allows your business to keep its chargebacks down, while securing payments from the potential threat of fraud.
This includes features like the ability to confirm your customers’ identities, authenticate a customer’s card number and address and fully configure your fraud filters to help your business differentiate between legitimate and suspicious transactions with a rules-based fraud solution.
Not only does finding the right payments partner reduce your payments risk, streamline your business processes, and lower your operational costs, it gives your business the reassurance that your credit card processing is operating in a way that protects your business and your customers.
With Payline by your side, your business can simplify the way you take payments online — while having all the tools and features needed to power your online business.
Anna Lothson is a content contributor for Payline Data. She previously wrote for PYMNTS.com, as a Sr. Content Producer, where she focused on financial services and payments innovation, fraud and security, emerging payments, and FinTech news, research and thought-leadership content across the payments industry.
