This article was updated on September 12, 2018.
Many small and midsized businesses are realizing that they need to take cybersecurity concerns very seriously. In fact, according to Marketing Tech News, financial institutions and e-commerce merchants are projected to spend $9.2 billion on fraud prevention measures by 2020.
Although small businesses may not be able to set aside a large portion of their budget for online security measures, there are a number of inexpensive steps they can take to help build up their defenses. Here are five tips to help you work toward preventing online fraud without breaking the bank:
1. Evaluate Emails
Analyzing email addresses is one of the easiest ways to tell if you may have been the victim of a fraudulent order. Most legitimate buyers have addresses that are some form of their own name or business name, or at least follow some sort of pattern. As such, you should be wary if multiple orders are coming in from an email address that is nothing but a nonsensical jumble of letters and numbers. In this scenario, it's possible that someone may be trying to use a stolen or skimmed credit card.
2. Check Shipping and Delivery
It's always a good idea to think twice about any discrepancies in billing and shipping addresses. While there's no guarantee that different addresses signal fraud — customers could be sending a gift — widely disparate addresses may indicate a potential compromise to your systems and should raise red flags. If the online order in question is extremely large or costly, you may want to consider contacting the purchaser before approving the transaction.
3. Ask Questions
Smooth sailing doesn't guarantee that you're in the clear. When it comes to preventing online fraud, it's always better to ask questions if you have any concerns rather than waiting until after the items have shipped and the real credit card holder appears, demanding to know what's been purchased on his or her account. If there's any indication — even just a "feeling" — that something isn't right, don't hesitate to reach out to the purchaser or credit card company.
4. Stay Up-to-Date
It's also important to make sure that your website is PCI-compliant and leverages the latest security measures. After all, retailers can be held responsible for damages inflicted if their payment security measures aren't up to the industry standard. You may want to find a provider who's able to design and implement a PCI-DSS compliant e-commerce system verified with a "trust mark" security service such as TRUSTe or Verisign.
5. Leverage Provider Platforms
It's also possible to leverage payment provider solutions, such as Mastercard's Simplify Controls, that automatically decline suspected fraudulent transactions. These types of tools let merchants control specific details regarding acceptable, approved transactions, such as the maximum order size, country of origin or number of repeat order attempts.
As times goes on, e-commerce portals are becoming increasingly desirable for companies of all shapes and sizes. By following these five tips, you can help establish a secure foundation for combating online fraud.