Preventing credit card fraud online can be very challenging, even more so than brick and mortar credit card fraud, if you are not using the right tools for the job. What makes it inherently more difficult to stop credit card fraud online is that you are not in the physical presence of the thief. You have no photo ID to compare to the face behind the credit card, and as such, you have to rely on more technologically sound methods to detect and prevent. Unfortunately, technology is not foolproof, especially if you are playing with the wrong bank identification number database.
Preventing credit card fraud starts with establishing identification. While many people rely on the three digit code on the back of the card as proof that the person using the card actually has ownership of it, this doesn't prevent against lost or stolen cards. While a bin database purports to stay on top of card numbers that are being used in questionable ways, many fail to keep their rolls updated the way that they should. Keeping a good database costs money, and many companies would rather inflate their profit margins and leave you in danger of chargebacks, rather than pour in the necessary resources to run a good product. Be leery of those businesses that are able to severely undersell their competition.
If you run an online business, then you must, must, must, invest in a reputable bin database. That's the only way you'll be able to tell if the customer has put any holds on the card because of a lost or stolen criteria. It is your responsibility to make sure that you know about these measures, even as it is the customer's responsibility to report their card lost or stolen the moment it comes to their attention. Just like customers may be financially liable for forgetting to do so, you could lose the merchandise and the sale if you do not follow due diligence as well.
So the key to preventing credit card fraud online is that you must invest in the safety of your business, not only for your customer's well being, but your own as well. The economy is far too tough for you to be reckless with business practices, and if you do go the extra mile to protect against online fraud, then you will likely make it back through consumer confidence and a higher number of completed transactions. And with each new transaction that comes your way, that's more profit you can add to the bottom line. It really is a win-win when you lash out against fraud. And in the online world, you'll need to be ever more vigilant against the perpetrators of these crimes.
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