Online card fraud has rocketed in recent years as more people head online to shop. Businesses that don't protect themselves from these scam events could result in heavy losses and even put a business under in certain cases.
The good news is that there are ways to protect your online business
Implementing these will have the effect of deterring fraudsters from carrying out a scam event as well as allowing you to identify and prevent some fraud.
New credit card security features
Credit card companies introduced what is known as 3-D Secure to attempt to combat online fraud. In order for a transaction to be completed, the cardholder must enter a password, that they created after entering personal information in order to validate a transaction.
The user must register for this service which is often prompted by attempting to complete a transaction. The customer is taken automatically to the bank issuer website to register.
This system is highly recommended to be adopted by online businesses since it clearly reduces the chance of fraud since it shifts the responsibility back to the cardholder and the credit card company as it acts like an online PIN eliminating the risk of unauthorized cardholder chargeback to a business.
The downside is 3-D Secure adds another action for the customer to complete which will affect your business's conversion rate; hopefully, the risk will be offset by the fraud it is preventing. As the systems become more widely known and people get used to them then conversion rates should be impacted as much. The security enhancements should also boost customer confidence as they are dealing with a legitimate website and therefore may lead to increased and repeat business.
I think this is a must for any online retailers however do consider the downsides including the risk of program variations across regions. Customer registrations, card issuer registrations, and legislation all differ around the globe.