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Online and mobile channels are critical to businesses and their customers. They’re also very attractive to criminals. As online payment channels continue to thrive, so has payment fraud, with schemes like chargebacks costing businesses billions of dollars annually.

To protect your business and your customers, you should know be able to recognize the various types of transaction fraud popular among attackers today. With the move to EMV, there has been a great shift to the e-commerce space and card-not-present fraud. Online merchants primarily face these types of fraud:

Card Testing Fraud is when fraudsters use an e-commerce payment system to test various card numbers and expiration dates (usually obtained illegally) in pursuit of finding a valid combination. These tests are done manually or by using automated bots and scripts, which allow them to test several cards simultaneously.

Given most businesses are charged per transaction, and fraudsters may make thousands of attempts, the consequence on a business can be very costly. This method of fraud is also the main driver of chargeback requests.

Fraudulent transaction can also be detected after a purchase is made, but before it is shipped. Fraudsters typically make high value purchases for products that can be easily resold; but to make the transaction look as normal as possible, they typically leverage the legitimate cardholder billing information. 

This is where attackers get creative, often using re-shippers or shipping “mules”, freight forwarders, or delivery addresses that do not raise suspicion but are nearby international ports or airports so the fraudulent order can be quickly picked up and shipped to its final destination (often overseas).

The best way to defeat fraud is to prevent it.

Detect, monitor and assess the risk of fraud at every stage of the customer relationship, ensuring a safe and positive customer experience, all on one platform. Start now!