Transaction fraud or fraudulent payments is a looming threat for all merchants and payment service providers that operate via the internet. They are most prone to fraud due to the users’ sensitive data i.e. their credit/debit card information that is used while making a purchase online. This data can easily be stolen by hacking experts and therefore, companies have to be vigilant about detecting fraud and preventing it from happening.
This type of fraud can occur in a number of ways: the most prominent being unauthorized payments or payments via web pages that are not secure. The consequences include data breach and credit/debit information theft which could be detrimental to cardholders. Keeping this in hindsight, payment service providers can upgrade their security system with the best payment gateway solutions. Some of these measures are discussed below.
First and foremost, online companies should analyze their websites and look for loopholes in the system that can potentially be attacked by cybercriminals. These loopholes could be unsecured password protection, which can easily be hacked by third parties.
Know your customers
This precaution is for the businesses- they should ensure that payments are being made by genuine clients and not bots or someone using the clients’ pretense. Information provided by people should be verified through other means. The risk of neglecting this step is fraudulent payments made to merchants.
To prevent fraudulent payments via credit/debit cards, most of the online payment gateways go one step further and use authorization that operates on a code that is sent to the registered contact number. Payments only go through successfully if the correct code is entered. This way, even if someone under a pretense is using stolen card information, they would not have access to the code and the transaction will therefore fail to go through.
Invest in security service providers
At times, even these measures are not enough to prevent online fraud. Merchants operating on the internet should consider investing in security software that helps prevent cyber attacks. IT companies can therefore install highly secure hack blocks that provide additional security to your websites.
Adding security measures is not a one-time thing; it needs to be constantly updated and changed as per changing times and terms. Cyber attacks evolve and become stronger to overcome the existing security used by websites and not monitoring or updating these measures can prove to be detrimental for their businesses as they run the risk of losing customers and incurring losses. It is of utmost importance to keep checking and increasing the security measures to stay on top of such cyber threats.
Online merchants run the risk of fraud one way or another and at times do fall prey to such cyber attacks. However, installing a top-notch security system and keeping it updated can go a long way in fraud prevention.