How to Prevent Fraud Credit Card Payments

Top 10 Business Website Design Requirements
Top 10 Business Website Design Requirements
April 23, 2018
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How to Prevent Fraud Credit Card Payments

How to Prevent Fraud Credit Card Payments -

How to Prevent Fraud Credit Card Payments -


There are 2 ways of handling payment process with your website; either you connect with the Bank directly or through using 3rd party services which normally we call it Payment Gateway.

The below fraud credit card prevention tips are for website that connects and integrates the payment processing in their website with the bank directly, it is not meant for those who are using 3rd party payment gateway such as paypal or ipay88.

Credit card payment fraud is a major concern for business online, there may be some fraudsters who use others credit card details and get products.

The real credit card owner who is not aware of these fraud transactions, found out their credit card was being used; they will contact their credit card bank issuers and make a dispute of these transactions.

If credit card issuer proves that it is a dispute which is valid, payment gateway such as Paypal will freeze the money for the transaction.

Below are some of the ways to prevent credit card payment frauds.

1. Email Account Verification -

Email Account Verification

Email Account is very important validation for a customer online. By having a check on Email address, there are chances to prevent credit card payment fraud.

  • Email Address for a genuine customer have name or nick name with number.
  • Fraud Email Address have a repetitive alphabets with lot of digits. This is a sign of a fraud Email Address and it is important to get it validated for large orders.
  • If email addresses are related to a domain name, it is always worth to check that website online and read review. This helps in identifying wrong or fake accounts
  • Be careful and add an additional measure of verifying the user if the order is large and it comes from a free email service provider like Gmail, Yahoo etc.
2. Credit Card Total Entry -

Credit Card Total Entry

Credit card number usage by a user for a transaction should be counted.

  • Generally a fraudulent user will type continuously credit card number and lot of retries of security code.
  • If customer enters the wrong security code more than three times, it means there is something wrong and that transaction should be double checked, it may be a fraudulent credit card payment.
  • However there may be chances some times that user has forgotten their security code. These type of transactions can be clarified by calling the customer and verifying the payment.
3. Credit Card Security Code -

Credit Card Security Code

Every credit card provided by Master or Visa has a security code embedded in the card. It is good if you always make it mandatory to add CVV to verify the transaction. Usage of security code helps in the below ways.

  • For every credit card, there is a security code at the back side. This security code will only be known to the genuine user.
  • If this security code is mandatorily verified, it will be difficult for fraudsters to do fraud credit card payment.
  • If fraudsters try to enter wrong security code multiple times, you need to pay more attention to the transaction.
4. IP Address tracking -

IP Address tracking

IP Address tracking for all credit card payment is another way to decrease credit card payment frauds. Below are the things you should check when you have IP Address tracking for credit card payments.

  • Check if there are large orders coming from multiple credit cards with same IP Address.
  • Check if same items are ordered from multiple credit cards with same IP Address. Many such instances result in fraudulent credit card usage. So in this case, validate Shipping Address and make sure to have a signed verification before buyer receive the goods.
5. Address Verification System (AVS) -

Address Verification System (AVS)

Address Verification System (AVS) is one way to prevent fraud credit card payments.

  • The Address Verification System (AVS) is a system which helps in fighting against fraud payment activity by verifying address of a person who claims to own a credit card.
  • This will compare and verifies the billing address of the user’s credit card with the address from Credit Card Company.
  • AVS is mostly used for online transactions. It will return “AVS Mismatch” if the verification of the address given by user doesn’t match with actual credit card details of the user. If this result is obtained, merchant can take additional caution before proceeding with transaction.
6. Credit Card Authorization Forms -

Credit Card Authorization Forms

When customer entering the credit card information in your website, there’s some extra step you can do to prevent fraud payment happen.

  1. If customer is requesting shipping to another country, you can get a credit card authorization form filled by customer.
  2. A credit card authorization form is a document which can be signed online by a cardholder, giving online merchant permission to charge a specified amount to that card. A recurring credit card authorization form gives permission to charge the credit card monthly.
  3. Credit card authorization form should contain cardholder information, credit card information, your business name and cardholder’s signature
7. Double Check Overseas Transactions -

Double Check Overseas Transactions

Overseas Transactions are very difficult to solve if there are any fraud credit card transactions.

  1. Cross check the credit card origin country with the shipping address country, make sure they are same.
  2. Usage of Address Verification System for overseas transactions also helps in decreasing overseas payment frauds. You may only choose this option if the price of the product are very high.
8. Validate Shipping Address-

Validate Shipping Address

Shipping Address plays a major role in decreasing credit card payment frauds.

  • If the user is new, check if they have same shipping and billing address entered during purchase. Double checks if both are the same. This is a preventive measure to be taken for new users.
  • Avoid shipping to post offices or temporary addresses like hotels as it will be very difficult to trace the address in case of fraud credit card payments.
9. Check Transaction Declines

Check Transaction Declines

Transaction declines happen if credit card details are not entered correctly.

If consistent transaction declines are happening with the same credit card, then some fraudsters might be involved.

Once transaction decline happens more than 2 times, save that IP Address into IP Address fraud database.

If the continuous transaction declines issue keeps happening, check this IP Address records.

If this IP Address already recorded in your existing IP Address fraud database, decline this transaction permanently.