Being a victim of online fraud is no fun. Not only do you lose your confidential financial information, but it also exposes you to a variety of online frauds in the future.
A research report predicts online payment frauds to grow over 50% in Europe by 2024. With the world embracing digital payments at an accelerated pace, businesses need to upgrade their platform security to prevent payment frauds. If you’re a business seeking security models, here are three practical strategies to protect your business and customers from payment frauds.
3 Practical Strategies for Online Payment Fraud Prevention
Build a secure transaction environment
- Track suspicious account activity: As a part of the primary line of defense, tracking user account activity for suspicious behavior can help businesses avoid potential frauds. Any inconsistent billing or shipping information should raise a red flag for businesses.
- Use dynamic fraud detection tools: Implementing fraud detection tools with artificial intelligence and human capabilities can help predict fraudulent behavior, especially on platforms having hundreds or thousands of transactions processed per minute.
- Upgrade your encryption: Since you are likely to store sensitive user information (email, address, phone numbers), implementing high-grade encryption is one of the first things to do. Adding a 256-bit AES (Advanced Encryption Standard) ensures that hackers cannot access user information.
Boost customer-end security
- Make strong passwords mandatory: One of the weakest links in protection against payment fraud is weak user passwords. Make it mandatory for users to set multi-character passwords.
- Seek two-factor authentication: Adding two-factor authentication for account transfers (exceeding specific limits) or large transactions is another way to prevent fraudulent transactions. Businesses can use SMS or email-based verification codes.
- Run user education campaigns: Business should invest in user education through email campaigns, app or platform notifications. Keep them aware of potential payment frauds and how to safeguard against these scams.
Implement a two-step authentication process
- Deploy Address verification systems (AVS): In line with using automated fraud detection tools, businesses can use address verification systems (AVS) to cross-reference the billing address and registered bank’s address information for a user. Any irrelevant addresses act as a potential red flag for businesses.
- Add CVV verification, 3D-secure measures: As per regulations, online merchants cannot store CVV numbers (printed at the backside of credit or debit cards), which makes them an ideal tool for transaction verification. There is no way hackers can access the CVV number without physical access to the card. 3D-secure technology is another security measure businesses can use for transaction authentication.
- Integrate SMS notifications, push notifications, email notifications: Two-factor authentication is one of the simplest and most effective security measures for online payments. As a business, you can use SMS notifications, push notifications, or email notifications for transaction confirmations.
Wallter is a provider of online payment solutions, including IBAN accounts and prepaid cards, with built-in security features. Our customers receive real-time monitoring, multi-factor authentication (SMS, push notifications), and advanced anomaly detection protocols for their financial transactions.
If you have any questions about getting started, Get in Touch with our Team Today.