Fraud has escalated this year to nearly $22 billion in losses globally. In other words, for every $100 spent, 6.97 cents was fraudulent, compared to 6.21 cents the year before. The Nilson Report, the top newsletter covering the payment industries, put together the specific fraud metrics. 

According to their report, if the global fraud rate was a pie, the US has the largest slice. The United States alone accounted for nearly 40 percent of the gross fraud losses, even though they only generated 22.9 percent of global purchase volume.  Simply put, for every $100 spent in the US last year, 11.76 cents was fraudulent. 

If you’re processing credit cards, you’ve most likely heard of PCI compliance. What is it and how do you become compliant? We’ll walk you through it.

What is PCI?

The Payment Card Industry Security Standard is a set of guidelines that protect merchant and cardholder security.  If a merchant intends to accept card payments, the data must be hosted securely with an approved provider.

Online merchants become more at-risk for online fraud each year, making fraud detection and prevention a vital component of successful business.

The average number of successful fraudulent transactions grew 32.1% in 2015, with retailers reporting an average of 206 fraudulent transactions per month compared to 156 in 2014. Retailer’s prevention efforts simply aren’t keeping up with the growth in fraud.

What most merchants don’t know is that there are some powerful tools that come with most payment gateways. These tools can be used to gather information about an order to make an informed decision about whether or not to process the payment and ship an orders that may be potentially fraudulent.

An article by American Express offers some solid advice on precautions retailers should take to prevent losing business if unscrupulous customers claim they never received delivered orders.

Small businesses are generally hit hard by chargeback fraud. Aaron Press, Director, Payments & eCommerce for LexisNexis said, “We do know that small merchants invest less in fraud protection and are more likely to be defrauded because they have fewer ways to catch things in the process, And fraudsters know this.”

If your business receives too many chargebacks, aside from losing valuable, you can potentially damage your standing with the processing bank. If the chargebacks continue, you may even lose your merchant account and face difficulties finding another service provider.

Here are some tips on how to avoid chargebacks altogether:

Loyalty programs are everywhere you look. At the airport, gas stations, grocery stores and coffee shops, every retailers seems to be offering some perk to its frequent customers. More and more business are recognizing the value of these programs in retaining existing customers. Why? Because it’s a cost effective and a vital component of maintaining a competitive edge in today’s marketplace.

Data shows that it costs business 5-10 times more to acquire new customers than sell to existing ones. Additionally, existing customers spend an average of 67 percent more than new customers.

Consumers have also come to expect loyalty programs, especially from larger retailers. Good rewards programs are wildly successful; they can be the reason that a customer always flies with Jetblue, or purchases all their cosmetics from Sephora.

Most business owners have dozens of passwords for various websites, software and services. With over 30,000 web sites hacked per day hackers are now cracking passwords faster than you can process a payment.

The challenge is, how do you develop a strong password for each site without having to remember them?

One solution would be to use a secure password generator and store their passwords in a password manager. The problem with this is that it’s a hassle to constantly be looking up passwords.

We want to share with you a simple technique that will keep your passwords at the top of your mind.

How? By creating an algorithm.

Phishing is when fraudsters pretending to be from well-known companies, organizations, or government agencies contact consumers and try to trick them into revealing their personal information.

That information is then used to commit fraud like opening new accounts in your name or taking over existing accounts like online banking or iTunes. It can happen over the phone, on email or even through text messages. Protect yourself with these quick tips:

According to PCI standards, a merchant may never store lists with customer’s card data on any medium which is not PCI compliant. Word documents and spreadsheets, even if they have a strong password, are not PCI compliant, and thus may never be used to store lists with card info. Even if you create a custom program with many levels of security, it is still not PCI compliant.
(The exception to this regulation would be to store the info of one card on a piece of paper. However, multiple numbers are never allowed, even on paper)

If a merchant processing bank fee or charge is ever returned for insufficient funds, the processing bank will become concerned. Their reasoning will be that if the merchant doesn’t have coverage for a small fee, how would they be able to recover from a large potential chargeback?

When a customer sees a charge from a merchant they don’t recognize, there is a good chance that they will dispute the card.

For some merchants, the name that appears on customer’s statements is not the name that they operate with (a DBA) or print on receipts. When this occurs, it is important to communicate with customers and let them know which name to expect on their statements.