No matter whether you have a small, medium, or large business, fraud schemes may threaten it. While large companies can suffer from attacks in the same way, small and midsize businesses are even more vulnerable. Since all business owners have something to lose, they have to take preventive measures against the most popular types of fraud, including asset misuse, theft, and financial statement cheating.
Risk Categories
Nowadays, most businesses accept payments via credit cards. It significantly increases the chances of chargebacks, when the customer begins the dispute with the company and returns all the money previously paid for the goods. Some merchants are less vulnerable to it. There are three categories of merchants when it comes to the chargeback.
- Low-risk businesses
A low-risk category mainly includes card-present environment large business. It means that brick-and-mortar stores are more secure than online ones. Face-to-face payments with security cameras and a security guard on the doors apparently lower down chargeback risks like nothing else. Yet, they may still be called to dispute.
The most helpful strategies of fraud protection for low-risk businesses are:
- The 3D or EMV secure technology use. It means, that the terminals must include EMV chip readers so fraudsters would not be able to duplicate cards;
- Customer service must be always monitored. If you receive chargebacks, the first thing you have to do is check the services you offer;
- Watch out for automatic errors. Make sure you check your terminals often. Monitor the possible viruses.
- Medium-risk business
Almost all online stores can reach the medium-risk-level category. Apart from them, high-end fashion dealers, secondary market jewelers, and ticket vendors also belong there. Even large businesses can fall down to the medium risk category with the lack of security.
The main advice you have to follow:
- The business name must not be mistaken for another brand and so on. The clients, who usually face an unknown name in the payment, can start the chargeback dispute faster than you will be able to explain everything. If you have two different names, make sure that this information is crystal clear to your clients;
- Trustchain. Use the tool to protect your business from fraudsters. It checks the reliability of emails, phone numbers, card IDs, personal ID, SWIFT, IBAN, and even system account ID;
- Fingerprinting smart check from Covery ensures the phone that is used for the transaction is not stolen, another reliable way to secure yourself from fraudsters;
- Become more accessible to your customers. It means you need to provide the phone number of your company or support team on the payment receipts. Don’t forget to implement the customer chat window. Cardholders may have a problem with a transaction that can be solved immediately if your business is reachable. If you can’t be present 24/7, you can simply limit the time of available transactions;
- Always keep the customers informed about the rules of refunds and chargebacks. Make this information pop up before they continue their payments process.
- High-risk business
This category suffers the most from fraud and scammers. Many businesses in this category don’t require any cards. Most of them provide ephemeral services and products, including travel, beauty products, health products, food, alcohol, gambling, and even digital media services. Individual merchants, who can’t afford advanced security, belong to this category too.
The best ways to protect your high-risk business are as follows:
- If you don’t have money or time to hire several analysts, you can order Covery in-depth analysis. The system checks everything at once, including KYC/KYB, payout, refund, registration, login, item that is ordered. It looks for frauds and checks the most vulnerable spots;
- Phone verification is a necessary thing to do. It does not take too long, but it checks whether the card number was not stolen;
- Don’t lie about the products you sell. If the customer expects to receive another product, the chargeback is soon to be filed.
Support Your Business
No matter which group of risks your business belongs to now, there is always a way to improve its security. Take some time and put in the effort to secure yourself and your customers. You will learn a good reputation on the market is something that attracts a bigger audience of clients and makes you prosperous.