STOP CREDIT CARD FRAUD AND SAVE MONEY FOR YOUR BUSINESS, WITH SOTPAY

THE MERCHANT

As a business which accepts card payments, all merchants are open to two main risks, Credit Card Fraud and Friendly Fraud.

CREDIT CARD FRAUD

Credit Card Fraud is the most prevalent and widely known form of risk to a merchant which accepts card payments. Criminals will use compromised, or stolen card details to attempt to make a purchase of usually highly desirable items. Once the transaction is completed and the product or service has been delivered, the genuine cardholder would begin a payment dispute with their bank or credit issuer, and funds are then returned to them, usually at the merchant's expense, as they are left without the stock or the revenue.

DID YOU KNOW?

There are 13.5m lost or stolen card details available to purchase on the Dark Web for as little as £5?

FRIENDLY FRAUD

A growing threat to businesses that accept card-not-present payments; Friendly Fraud occurs when a customer makes a purchase via a card-not-present transaction, but then begins the process of notifying their bank to dispute the knowledge of making, or approving the transaction. If the merchant is unable to prove that the payment was indeed made by the cardholder, it leaves them once again without stock or revenue, and the customer with illegally obtained goods.

THE CUSTOMER

With the vast majority of the UK's population in ownership of a payment card of some type, many have grown accustomed to simply reading out their card details over the telephone to voices that they trust as representatives of the organisation they wish to pay, however, there is very little to stop rogue employees from quickly recording card details.

PAYMENT CARD FRAUD

Business owners or employees could potentially record, and then either sell, share, or use the stolen card details to make their own purchases elsewhere. In the social distancing and working-from-home era that has developed in the wake of the covid-19 pandemic, employees are currently given more trust with customer card details than ever before, and with rising debt and risks of unemployment, the temptation grows stronger to make ends meet in fraudulent ways.

HOW ARE CNP TRANSACTIONS SO DANGEROUS TO A BUSINESS?

Put simply, an unsecured card not present transaction does not enable the merchant to verify that the person holding the card is the genuine cardholder. An authorised transaction at the bank does not mean that the money now belongs to the merchant. An authorised transaction simply confirms that there are funds available in the account, and that the card is not lost or stolen at that time, it does not protect that revenue from fraud related chargebacks.

WHAT IS A FRAUD-RELATED CHARGEBACK?

A chargeback is a demand by a cardholder and their card provider, of a retailer, to compensate for loss on a fraudulent or disputed transaction.

DID YOU KNOW?

On average, fraud-related chargebacks and chargeback management cost UK businesses 8% of their revenue in 2018 and approximately 50,000 jobs were lost as a direct result of chargeback fraud.

(*Barclays research conducted by YouGov. May 2018)

HIGHER TRANSACTION FEES

Because a non-authenticated transaction carries a greater risk with it, banks charge higher rates per transaction, costing merchants across the world millions of pounds in unnecessary fees.

HOW DO I STOP IT?

There’s no guaranteed way of 100% eradicating chargeback fraud from a merchant’s business, but by ensuring additional checks are made on each transaction at the point of paying, the liability is shifted back to the bank, so that fraud-related chargebacks are reduced, and in most cases, eradicated altogether.

WHICH ADDITIONAL CHECKS DO I NEED TO MAKE TO AVOID FRAUD-RELATED CHARGEBACKS AND REDUCE MY TRANSACTION FEES?

You need to ensure that any card-not-present payment is verified and authenticated by the cardholder. E-commerce websites will do this by requesting a one-time password be entered, or that the 3D secure password is entered at the first purchase before the card may be used to make a purchase. It is not generally possible to do this by telephone or any other direct distance payment without the help of additional software.

● Security Solution of the Year

● Best International Card Not Present Program

● PCI Award for Excellence

● Best Use of Technology

● Security Innovation of the Year