How to reduce fraud in payments with a payment gateway
Paying online is the most convenient way to purchase goods and services, but it can also be a target for fraudsters. To avoid becoming a victim of identity theft or financial loss, you need to implement some basic steps that will help keep your business safe from fraudulent transactions. Here are some tips on how to reduce fraud in payments with a payment gateway:
Implement 3D Secure
3D Secure is a standard for online payments. It’s used to verify a cardholder’s identity by verifying that they are who they say they are (and not someone else) and that their credit card has not been reported as stolen, lost or fraudulent. In other words, when you use your credit card on the Internet or in person at an ATM, you’re handing over some data about yourself.
The merchant uses this information to ensure it’s you making that purchase, not someone who’d like to steal your identity and make purchases with it. If everything checks out with these processes, we call this “verification.”
Keep your software updated.
If you want to reduce fraud in payments, keep your software updated.
- How often should I update my payment gateway?
- Every six months is a good rule of thumb. It’s important to keep an eye out for any new patches or vulnerabilities that may have been uncovered since the last time you installed the update and ensure that none of those are negatively affecting your system before installing them. If there are any performance or functionality issues after updating, ensure they’re properly resolved by contacting support first!
- How do I test updates before rolling them out?
- Test your payment gateway by creating a test account with fake data fields and ensuring everything works as expected before deploying updates across all platforms (PCs, Macs). You can also create a test environment outside of production if necessary; this way, if something goes wrong during testing, it won’t affect any actual users’ accounts!
Be PCI compliant
PCI compliance is a set of standards that help protect cardholder data. It’s important for merchants and payment processors, but not all businesses know its importance or how they can achieve it.
PCI compliance may be called “security standards” or “risk management initiatives.” Still, these terms should give you an idea: They mean that the use of your credit card processing service will be subject to a rigorous review process by your bank or other institution before it takes place.
PCI compliance isn’t difficult at all—it’s just another legal requirement with which you need to comply if you want any chance at success whatsoever when dealing with online payments today!
Tokenization is one of the most effective ways to reduce fraud and protect your business. Tokenization replaces sensitive card data with a unique, random string of characters that may be used instead of the real card number, expiration date, and CVC code.
Tokenization can be applied to any information used to make fraudulent purchases and authorize transactions on behalf of another person or entity. Furthermore, it cannot be reversed once applied, so it’s important for businesses that want their customers’ privacy protected from liability claims in case anything goes wrong later down the road when someone tries making fraudulent charges against them.
Tokenization works best with high-risk transactions because users need to enter only one password before accessing all sensitive information needed at checkout — saving while still adding user data from being compromised by hackers trying to steal personal details inside or online!
Use location-based restrictions
Geolocation is a great way to restrict payments based on the customer’s location. You can also use geolocation to restrict them by the time of day, device type, and browser version.
Implement a fraud scoring system and set limits on transactions
To prevent fraud, you need to use a fraud scoring system and set transaction limits. You can use an algorithm-based or manual system.
If your payment gateways give you the option of setting up a blocklist and allowlist, then this is what I would recommend:
- Blacklist: A list of users or IP addresses that are banned from using your service. This means they won’t be able to make any payments (e.g., if someone tries to purchase something from Amazon but their account has been blocked).
- Allowlist: A list of users or IP addresses who can make purchases but must undergo extra verification before processing their payment requests (e.g., if someone tries making an online purchase but doesn’t have enough funds available in their account).
With any single security measure, there will be a way to get around it by providing multiple ways to protect yourself and your customers. A payment gateway can prevent fraud on a case-by-case basis. All in all, if you’re still worried, check out the Pay payment methods; these payment methods have 3ds2 security, additional tech support, and work with a lot of payments for e-commerce you could have integrated into your online shop. Also, if you want to be safe and keep fraudsters at bay, Pay is a good choice.
These systems can automate the process and give you more time to get back to what matters to your business.