Don’t Be a Victim of CNP Fraud: Learn How to Prevent Chargebacks with These 3 Helpful Tips

Credit Score CNP Fraud access credit cards | Don’t Be a Victim of CNP Fraud: Learn How to Prevent Chargebacks with These 3 Helpful Tips | The arrival of eCommerce is disrupting traditional brick and mortar business models. However, in the process of unlocking the significant earning potential for online retailers, it has also given rise to many opportunities for fraud which online scammers exploit for personal gain.

The number of card-not-present (CNP) chargebacks are increasing as fraud prevention and detection software scrambles to keep pace with the explosion of CNP transactions in the eCommerce sector. A CNP chargeback occurs when a customer disputes a transaction on the credit card and a chargeback is issued. It is usually an indicator that the transaction was fraudulent.

While there are chargeback management software solutions available to merchants looking to protect themselves from CNP fraud, these are three helpful tips for carrying out CNP transactions that will help protect your business against fraudulent transactions and CNP chargebacks.

Validate the Cardholder’s Identity

Most CNP chargebacks come from stolen credit cards. Therefore, validating the cardholder’s identity is key to preventing CNP fraud.

There are several ways from merchants to verify a shopper’s identity. Merchants can perform age and address verification with Netverify, there are also dual authentication solutions which involve the use of secret information that is only available to the cardholder. This can sometimes be in the form of a PIN code on a statement, or a paired phone or email address.

Get the Card Security Code

The security code printed on the back of the card is not available anywhere else. This means that the person on the other end of the line either has the card in their possession or has had the card in their possession at some point in time.

Merchants who wish to prevent fraudulent transactions must make sure they ask for this code in each and every purchase.

Build an Audit Trail

The more information you have on each transaction, the better protected you are against CNP fraud. This is why building an extensive record of each transaction in the form of an audit trail should be a priority for an eCommerce business.

Audit trails allow for better detection of suspicious purchasing activity. They also offer a mechanism for resolving any dispute the customer may raise with the credit card company over the nature of the transaction. A comprehensive audit trail allows the payment to be traced efficiently and will allow for the early detection of fraudulent transactions.

Building a strong audit trail comes from using a payment processor that collects detailed records of each transaction. This record should also be easily accessible to the merchant and allow them to quickly gather the information in the event a dispute arises.

The best to protect your business against CNP fraud is by recruiting professional help. There is only so much that your employees can do through adopting the best working practices. The most comprehensive solutions involve acquiring tailor-made solutions from a third-party. These companies are dedicating their time to staying one step ahead of cybercriminals and can help your business avoid the financial and reputational damage that comes with falling victim to CNP fraud.

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