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Avoid Three Common Types of eCommerce Payments Fraud

Learn how to protect your business from online credit card fraud

Payments fraud affects all commerce channels and eCommerce is no exception. Because physical cards are not swiped for these purchases, there are even more ways for clever fraudsters to capitalize on stolen card information. Let’s explore some of the ways that payments fraud happens online and what your business can do to help prevent it.

Simple card theft

When thieves obtain card information like personal account numbers, expiration dates, and cardholder names, it can open the door for online payments fraud. However, there are steps your business can take to help deter the effects of simple card theft:

  • Using address verification service (AVS) and requesting card security codes can help validate that the purchaser is indeed the cardholder
  • Flagging orders with quantities or transaction values beyond the norm
  • Tracking payment card numbers, IP addresses, and email addresses that are associated with known fraudulent transactions

Card testing

When fraudsters obtain a bulk of stolen card information, they may try to distinguish those already reported to issuers by “testing” each card with low-ticket transactions from trusted businesses and organizations. Here are some steps you can take to help mitigate these attacks:

  • Adding AVS and card security code verification to your checkout process can slow down the speed of each payment transaction and render your site a less attractive target
  • Monitoring device, IP address, and IP geolocation velocity to flag irregular purchase activity above a predefined threshold
  • Identifying each buyer’s device and/or true IP address (i.e. behind any web proxy)

Package interception and redirection

Card thieves can use stolen card information to purchase hard goods and then intercept them during delivery. To help avoid the costs of lost goods, chargebacks, and refunds, consider the following techniques:

  • Flagging potentially risky orders for manual review prior to shipment and contacting cardholders directly to authenticate the order
  • Requiring each customer’s billing address when accepting payment; once confirmed, it can serve as a cross-check when evaluating the shipping address
  • Implementing a velocity check on each shipping address and flagging those that exceed your cap

Vantiv Integrated Payments works with developers to provide customized fraud solutions for both POS and eCommerce payments.


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