Credit card fraud is a severe issue for both cardholders and their bank. The complex process of detecting it can be daunting, but protecting yourself will allow you to feel more confident using your credit cards online or even taking out a loan.
One of the most common methods of committing credit card fraud is through card-not-present (CNP) transactions. The criminal does not have to possess the credit card for fraudulent purchases physically. This can be done in several ways, such as through fake or stolen identities or by using counterfeit cards.
Because it is much harder to verify the cardholder's identity in a CNP transaction, this type of fraud is much more common than face-to-face credit card fraud.
This makes it essential for businesses to have robust systems to detect and prevent credit card fraud. While no system is 100% foolproof, there are several measures that companies can take to minimize the risk of fraud. These include using secure payment processing systems, verifying the customer's identity, and fraud detection tools.
What is Card-Not-Present Fraud?
Card-not-present fraud is a type of credit card fraud that involves criminals using stolen or fake credit card information to make purchases without having the physical credit card in their possession.
This type of fraud can be perpetrated in several ways, including through the use of counterfeit cards, online scams, and even the use of stolen card numbers.
Because the criminal doesn't have to possess a physical credit card, CNP fraud is often seen as a more dangerous form of credit card theft. It is much more challenging to track and prevent these crimes.
As a result, it is essential for consumers to be aware of the various ways in which CNP fraud can occur and to take steps to protect themselves from becoming a victim.
Why Is Card Not Present Fraud So Difficult to Deal With?
The biggest frustration about CNP fraud is that banks and payment processors cannot do anything to protect your sensitive client data. Customers place convenience above all else, so they are often lax when securing their credit card information. This means breaches will inevitably happen sooner rather than later- even with chargebacks as an insurance policy.
Card-not-present fraud is becoming increasingly prevalent, with losses expected to reach $27 billion by 2023. The use of payment cards provides criminals access that would otherwise be impossible without them - making it difficult for law enforcement agencies tasked specifically on this issue to try and stop what's going down.
This is a significant problem for the payments industry and proving difficult to solve. But payment processors and banks are starting to adopt new technologies, like tokenization, that can help to improve security and reduce the risk of fraud. Hopefully, with these measures in place, the amount of CNP fraud will start to decline in the years to come.
How Do Criminals Obtain Credit Card Information?
The criminals who perpetrate credit card fraud can obtain the payment information of their victims in a variety of ways. The most common of these include phishing attacks and database breaches.
This cybercrime cycle is why it's so crucial for businesses to have strong cybersecurity measures in place. By doing so, they can protect their customers' data from being compromised in the first place.
Tips to Reduce Card Not Present Fraud
Fraudsters are becoming increasingly sophisticated in their methods, making it more challenging to identify CNP transactions as fraudulent. However, by understanding the different ways fraud can occur and utilizing the latest technologies, you can help protect your business from this type of crime. Here are a few tips:
Collect All the Customer Info You Can
The more customer information you have, the better off you are. This is true in various contexts, but especially when it comes to credit card fraud protection, marketing, and sales. By having as much information as possible about your customers, you can improve your upselling and cross-selling efforts, as well as your ability to dispute chargebacks.
The bare minimum of info you should be gathering includes: email address, credit card info including CVV code, billing address, device info, IP address, and phone number. However, it would help collect as much additional information as possible, including things like purchase history and demographic data.
Data enrichment is a process that takes single data points and uses them to aggregate info from external sources. This can be done by analyzing an account email address to see if it is also used for social media profiles or by taking a phone number and identifying whether it is a landline or cell phone.
This information can be valuable for businesses, as it can help them understand their customers better. For example, by knowing which social media platforms a customer uses, a company can target advertising specific to those platforms.
Monitor All Unusual Behavior
Now that you understand your clients' typical behavior well, you can use this information to create rules or integrate AI-based fraud detection schemes to help protect your clients from payment fraud risks. The behavior of criminals almost always follows specific patterns that can signal payment fraud. You can make them much more accurate by turbocharging your security solutions with enriched data points. They will now be capable of identifying fraudulent transactions that would have flown under its radar before and recognizing genuine transactions as such in places where they could've been mistaken for fraudulent ones.
Kryptova is a payment gateway that can help you secure your transactions. With Kryptova, you can ensure that your payments are safe and secure.
Card-not-present fraud is becoming a huge problem, and it's essential to use a payment gateway that can help you protect yourself. Kryptova is the perfect solution for securing your transactions. With Kryptova, you can ensure that your payments are safe and confidential.
Don't let yourself become a victim of card-not-present fraud - use Kryptova to secure your transactions today!