How to Prevent Card Testing Fraud

As online fraud surges, card testing fraud is posing a particularly significant threat to online merchants. If you accept payments online, it’s important to be aware of the signs of card testing fraud, and to implement the right technology and safety measures to keep card testing fraud at bay. In this blog post, we’ll give you an overview of what card testing fraud is, and share some helpful steps for protecting your business.

What is Card Testing Fraud?

When fraudsters obtain stolen card information, one of the first things they do is start testing each card’s validity and available funds by making small purchases online. If the card is authorized, the fraudster will know that they can start using the card to make larger fraudulent purchases. If the transaction is not authorized, the fraudster can continue testing it with alternate billing addresses, security codes, or other details until they find the right information. To make this retry process easier, fraudsters will often use bots to test large volumes of cards on e-commerce sites that will give a reason for the declined authorization.

What Are the Consequences of Card Testing Fraud for Merchants?

Card testing fraud attempts can rack up authorization fees and chargebacks — both of which not only impose added costs, but can even place your processing account in the high-risk category.

How Can Merchants Prevent Card Testing Fraud?

Fortunately, there are things you can do to keep fraudsters away from your online site. To reduce card testing fraud attempts, we recommend the following tools and procedures:

  • Look Out for Suspicious Transaction Activity
    Receiving many low-ticket transactions, or receiving many transactions in a short period of time, can both be signs of card testing fraud. Another sign of card testing fraud is receiving many Address Verification Service (AVS) alerts or Card Verification Value (CVV) error messages.
  • Utilize Fraud Prevention Tools
    There are several solutions available to help you stop fraud in its tracks. This includes, among other things, AVS and CVV checks, fraud screening software, EMV 3-D Secure, and CAPTCHA tests.
  • Include More Payment Fields
    Requiring more information at checkout makes it more difficult for fraudsters to test cards. Consider adding fields for the card’s CVV and expiration date, as well as the customer’s address, email address, and phone number.
  • Set Up Fraud Filters
    Payment gateways like Cardknox give you the option to apply filters that prevent suspicious transactions from going through, based on certain parameters. Some helpful filters for reducing card testing fraud are AVS filters, velocity limits, and IP address blocks.
  • Perform Regular System Scans for Malware or Spyware
    This will help ensure that your online site is kept safe from security threats.

Want to learn more about accepting online payments securely? Reach out to Fidelity’s Customer Service team for assistance!