Most e-commerce entrepreneurs are familiar with fraud. Fraud can be in the form of chargebacks, false orders, or other methods. Although there are many tools available to protect your business against fraud, payment gateways can be one of the most effective and powerful.
Payment Gateway Fraud
A payment gateway is all that’s needed to process and accept credit cards payments. Your payment gateway does more than accept credit card payments. It can also help prevent fraud.
How to Avoid Payment Gateway Fraud
Payment gateway fraud occurs when a customer uses stolen credit cards to buy from you. The fraudster will make payment, but the true credit card owner will report it as fraudulent. If you file a chargeback, you will be required to return the money. Additional fees and penalties could also apply to you.
Not only is a chargeback costly, but payment gateway fraud also has other downsides. Be prepared to deal with angry customers who have had their accounts hacked or with poor customer reviews.
Your payment gateway is an effective fraud prevention tool. If it is properly configured, it can stop fraudsters in their tracks. It can also save your reputation.
There are many gateways. There are some actions that you can do yourself, while others require assistance from a third-party developer. You can also contact your provider to learn more.
Stripe: Is Stripe a Payment Gateway
Yes, Stripe works as a payment gateway. Stripe can connect you with payment processing companies, but those services aren’t theirs. Stripe gives you a sub-merchant account, which allows you to process payments through their relationship with payment processors for credit cards.
Companies like Square, Shopify, PayPal, and PayPal are called payment aggregators (or 3rd-party processors).
What are the steps to make changes to my payment portal?
There are two ways to change your payment gateway if your merchant account is active.
Log in. Log in and you will see messages, options, and more. We can’t predict exactly what you’ll find, as every gateway is different. But there will be areas that allow you to view messages, data and options, codes, plugins, and other information.
Talk to your provider. You may not be able to alter the gateway settings with some providers. You can still make changes by calling or emailing your provider. They will be happy to change features or add APIs or plugins.
It all depends on what you are trying to accomplish. Some features are simple to change. Some features require programming.
Can I make any changes to my Stripe Gateway?
Stripe does not allow you to make any changes to your gateway. Although there are other options, they require developers to implement the integrations.
Stripe doesn’t allow you direct access to the gateway. However, you can perform certain actions regarding fraud. You can ask the gateway to send a customer an email asking them for a new credit card or payment method if their card has been declined. You can also access the gateway to view decline codes.
It’s a good idea to explore other gateways if you want to improve your ability to fight fraud. It’s not that Stripe’s a bad gateway. On the contrary, Stripe is one of the top payment gateways worldwide. It doesn’t allow for the customization that businesses require, especially when it comes to fraud.
Why use your gateway to prevent payment fraud?
If your payment gateway is not used for fraud prevention, then you are wasting money.
By using the tools provided with your payment gateway, it is easy to set up some rules that will help prevent fraud and reduce bad transactions.
It is crucial to prevent fraud for many reasons. It is important to protect your company against chargebacks, and disputes. These can quickly cost you your business and are extremely costly. You must also protect your customers against having their cards stolen or accounts taken over.
Although there are many methods to prevent fraud, even friendly fraud, leaving the solution up to your payment gateway can be dangerous. Once the fraudulent payment reaches the processor, eyebrows begin to rise, approval ratios drop, and banks become suspicious about your business. All of this is something you don’t want.
Ways To Prevent Fraud in Your Payment Gateway
These are some easy things that you can do now to use your payment portal as a fraud prevention tool.
AVS
The Address Verification Service (AVS), which is used to verify identity, allows you to use the credit card. This system ensures that the billing address you provide matches the one on file with the bank that issued the credit cards.
AVS can be a great security measure. It matches customer input with card information, but it won’t protect your business from every attack, especially if you feel that your business has been attacked.
CVV/CSC
Card Security Code (CSC), also known as Card Verification Valuation (CVV) or Card Security Code, is the code that appears on the backside of the credit card. It contains three to four digits. By verifying that the cardholder is physically in possession, CVV can help protect against fraudulent transactions.
While this is an excellent security precaution and should be used regardless, it will not completely protect you from fraud.
3DS
3D Secure (3DS), is a key security protocol used by Visa, Mastercard, and other cards (sometimes called Visa Secure or Mastercard Identity Check). It is used to prevent fraud and allows the issuing bank the ability to verify that the cardholder is the person purchasing the item.
When you make a purchase using your credit or debit card to pay for goods and services, the merchant will ask the issuing bank if your card is suitable. The issuing bank will then authorize or decline the transaction if it suspects fraud.
3DS technology adds another layer to authentication. Both the merchant and consumer are issued a “proof-of-ID” to complete the transaction. This provides additional fraud protection. Customers can verify their identity online or through SMS verification. Merchants can also use 3DS to create a unique code they can use for their anti-fraud software. This helps them know who they are dealing with, and it reduces their liability if the payment goes wrong.
This makes it difficult for criminals not to steal credit card numbers.
3DS is 2 Factor Authentication (2FA) that can be used for transactions.
Limits on transactions
When you have access to payment gateways, one of the best things is the ability to set limits based on card number, time of day, and amount. You can customize it according to the type of fraud that you are experiencing.
You can set transaction limits at a certain hour, on specific days, for holidays or specific weeks, or even months.
You can also limit the number of transactions per card by using the credit card number or the BIN (which refers to the first 4 digits of the card), the customer’s IP address, and even email. Our experience has shown that BIN is the best because fraudsters are known to bombard gateways with multiple attempts using the same BIN.
reCAPTCHA
Google offers this free tool that allows you to block automated attempts at using stolen credit cards numbers. It requires visitors to verify their identity before they submit any information.
This tool is used before you submit forms, log into, or do any other non-financial activity. It is still a useful tool and can be used to prevent fraud.
Void Transactions
If the email receipt bounces, you can cancel transactions to add an extra layer of security.
Many gateways offer the ability to create rules that will automatically cancel transactions if they don’t provide an email address and/or a telephone number. Without contact information, it is impossible to contact the customer and inform them of fraudulent purchases or request confirmation. Also, consider creating rules that can be used to reject such orders.
Fraud Scoring
It’s not gateway manipulation. Fraud scoring tools use data to generate a risk score per transaction. This score can then be used for deciding whether to accept or decline the transaction. They employ machine learning and algorithms to analyze thousands upon thousands of data points including IP address, geolocation, device type and ID, email age, proxy usage, and payment history.
A fraud scoring software is a layer between your checkout gateway and your computer. This can prevent you from having to pay gateway fees for fraudulent transactions. These tools will charge an additional fee for every transaction they score.
Prevent fraudulent activity from reaching your Processor and maintain a high approval rating.
Follow these steps to protect your online shop from fraudulent activity. Many payment gateways such as Paypal offer fraud detection, fraud management (such as decline messages), and PCI compliance. You can always do more to protect yourself.
Looking for a payment processing system
If you are looking for a payment processing system a payment gateway could be right for you or maybe another type of payment processing would work better for your business. Balanced Processing Partners has a variety of options and our consultants can analyze your business needs and present some options that they would recommend could best work for your business needs. Whether you are looking into a payment gateway or other credit card processing systems, please reach out to us at (800) 354-6256 or via email at [email protected] to learn more.