Handling E-Commerce Risks
To avoid chargebacks, it is up to the e-commerce merchant to apply the right tools and controls to verify the cardholder’s identity and the validity of the transaction. When used efficiently, these systems can reduce fraudulent transactions and the potential for customer disputes.
• Address Verification Service checks a credit card holder’s billing address with the issuer, providing merchants with an indicator of the validity of the transaction.
• Card Verification Value numbers are printed on the back of credit cards and can help ensure that the customer is in possession of a genuine card.
• Fraud Screening examines transactions and calculates the level of risk associated with each transaction, providing merchants with risk scores.
Selling your goods online can enhance customer relationships, attract new customers and increase sales revenue. However, if you are considering expanding your business online, it is important to understand what is required to maximize information security and minimize credit card payment risks. E-commerce sites that have little or no fraud controls in place can experience a chargeback rate of 10 percent or more. It is important to understand the basics of credit fraud before opening up for business online.