What Is Payment Fraud?
Payment and credit card fraud is nothing new to businesses. In fact, global losses reached a staggering $32.39 billion last year and that number is expected to reach $40.62 billion by 2027.
Payment fraud has definitely hurt many businesses and you can be the next victim. So, if you don’t want to go through the hassle and losses, the pros at our payment processing company share everything you need to know about payment fraud.
Understanding Payment & Credit Card Fraud
Payment fraud is essentially any form of illegal or false transaction that’s committed by a scammer or cybercriminal. This type of fraud is characterized by false refund requests or chargeback disputes, unauthorized transactions, and lost or stolen products.
Different Types of Payment Fraud
Payment fraud can come in all shapes and forms, but the most common ones include:
This happens when a fraudster tries to steal personal information and uses that identity to initiate fraudulent activities. These cybercriminals usually gain access to personal information by hacking firewalls and login credentials on public Wi-Fi.
Phishing scams are a common type of payment fraud targeting websites that require personal information such as login credentials, credit card details, and other sensitive data.
Merchant Identity Fraud
Some cybercriminals would pose as payment processors that take care of payments on behalf of your business. They create a merchant account where the payments would go through, only for consumers to realize later on that they didn’t pay for a legitimate business and their credit card information has already been stolen.
Some experienced hackers have the ability to redirect users from your website into an unwanted site where they can hack important consumer information and use it for different fraudulent activities.
Wire Transfer Scam
This new type of scam involves hackers asking for advanced fees in exchange for a product, credit card or cash at a set date. After the customer pays for the fee, the hacker will then disappear.
Mitigating The Risks of Payment Fraud
It’s almost impossible to completely eliminate any threats of fraud in your business. But it’s always possible to reduce the risks and protect both your personal information and your customer’s sensitive data.
- Always keep yourself updated with the latest trends in fraud so you can easily spot any red flags with your online transactions.
- Find the right merchant account provider that has at least PCI level 1 compliance. Your partner should also be able to provide you with different tools to help you mitigate the risks for fraud.
- Establish routine maintenance checks on all your security network systems. Login credentials and tokens should be updated regularly and all transactions should be encrypted to prevent any breach of information.
At the end of the day, payment fraud could be devastating to both you and your customer. Therefore, preventing these scammers from stealing information should be a collaborative effort.
As long as your customers take the right steps to protect their information and you invest in the right security measures and make sure your payment gateway is secure, you’ll surely be able to protect you and your customers from payment and credit card fraud.
Contact us today to discuss the merchant services we offer as well as more ways you can prevent payment fraud.
Joyce Hope is a writer who specializes in merchant accounts. She has worked for First Card Payments since 2017.