by Brendon Degner | Jun 22, 2022 | Merchant Services, resources, small business
Recently, the use of virtual credit cards (VCCs) has become a popular means of paying for goods and services online. VCCs are temporary credit card numbers that allow a consumer to complete a transaction online without providing their real account number. This can add an extra layer of security to purchases involving credit cards.
How Do You Get a Virtual Credit Card?
VCCs are provided as a service by certain banks and credit card companies. If your card provider offers this feature, you can request a virtual credit card through the company’s online portal or associated mobile app. Capital One’s Eno, for example, is an online virtual assistant that generates random credit card numbers for members.
Once you submit your request, you will be issued a temporary credit card number, expiration date, and security number. Transactions using VCCs will show up on your bank statement as if you had used your regular card number.
How Do VCCs Keep You Secure?
Many virtual credit cards are designed to be used only once. This means that, as soon as a payment is complete, the credit card number is no longer valid. In such cases a shopper need not worry about a data breach, since their credit card number can no longer be used by anyone.
In other cases, a virtual credit card may have a longer expiration date. In the event of a security issue, you can simply cancel the virtual card instead of having to close the entire account and wait for a brand new card to be issued.
Some virtual credit cards also allow you to set spending limits, which can protect you from fraud and also help you budget for certain vendors.
Cons of Virtual Credit Cards
Like most forms of payment, VCCs are not without their drawbacks. The main issues arise when a physical card is needed to verify a transaction. For example, many hotels require you to present the card with which you booked a room online. If you used a VCC, that number will not match and could cause issues with confirming your reservation.
You may also run into issues with returning goods to a merchant. Although VCCs are becoming much more commonplace, many stores still need a credit card in order to provide you with a refund. If you do not have a matching physical card for them to swipe, you may be forced to settle for store credit instead of a refund.
Keep in mind, also, that virtual credit cards can still be subject to cyber threats. If your VCC is not designed for single use, the number can be stolen and used to make fraudulent transactions. If you have more than one VCC, it will be extra work to monitor all your card numbers for unauthorized purchases.
Keep Your Business Secure
Accepting credit cards is essential in staying competitive as a business. Finding a merchant services provider that is within your budget and keeps your customer information secure is one of the most important steps you can take to grow your business.
If you need help finding the right way to accept credit card payments, contact Summit Payments Co. We can match you with the right provider and help you negotiate the most reasonable fees available.
by Brendon Degner | May 24, 2022 | Merchant Services, small business
E-commerce describes the buying and selling of goods over the internet. It is an extremely common form of business, with a majority of retailers offering some means of purchasing items directly from a website.
Many payments accepted by e-commerce sites are categorized as “card not present” transactions. This means that a physical card is not needed in order to pay. CNP transactions may also occur over the phone or through the mail.
CNP transactions on e-commerce sites typically involve the buyer filling out a series of fields, including card number, expiration date, and zip code. You are expected to provide additional supporting details, such as a billing address and shipping address. Other than this self-supplied information, however, there is no other means of verifying that the shopper is an authorized user of the card.
As you might expect, CNP transactions are at an increased risk of fraud versus card present ones. Payments involving the presence of a physical card, such as those at a brick and mortar establishment, have additional security measures to prevent unauthorized use. A debit card, for example, requires a pin; or a credit card might be matched with a photo ID.
When a fraudulent transaction occurs, the responsibility ultimately falls on the business owner. You will need to return the payment, accept the cost of lost merchandise, and may have a chargeback fee incurred by your payment processor.
To avoid such situations, you will want to be aware of warning signs to look for. There are a few common indications of potential fraud, and being able to spot them will spare you a lot of stress and help you avoid bogus sales and chargeback fees.
Signs of E-Commerce Fraud to Watch Out For
- Multiple orders of the same item
Fraudsters will target high ticket items and buy as many of that item as they can before the stolen card is maxed out. They can then resell the item for actual cash.
- Multiple orders to the same address paid for with different cards
Individuals using stolen credit card information will alternate between cards to avoid suspicion. If you are sending multiple shipments to the same home that have been paid for with several different card numbers, take a closer look.
- Large orders with overnight shipping selected
Credit card thieves want to complete their transactions to go through as quickly as possible to avoid detection. They will often make extremely large purchases and pay for expedited or overnight shipping in the hopes they will have the item before the cardholder even notices a fraudulent charge.
- Different shipping and billing addresses
This is not necessarily a cause for concern when it happens once in a while. But if you notice that the same shipping address has a consistently different billing address, it is a red flag.
- Declined transactions
Repeatedly declined transactions are a big sign of fraud. A credit card thief does not know precisely how much is on a card, and he or she may attempt multiple times with different cards that are also declined.
In that same vein, be aware of “card testing.” Scammers will attempt one or two small purchases with a card to see if it works, then make a much larger purchase.
Other Types of E-Commerce Fraud
E-commerce fraud does not always involve a stolen credit card number. Another type of fraud that is on the rise is something known as “return fraud.” This might involve a legitimate purchase but with the malicious intent of returning the item for financial gain. Some examples of return fraud include:
Switch Fraud-a buyer purchases a working item and returns an identical, but damaged, item.
Receipt Fraud-using stolen or forged receipts to return an item for profit. This may also involve purchasing goods on sale or from a different store and returning them to another store where they cost more.
Inventory depletion-buying out a seller’s inventory and re-selling the goods as your own for a higher price. Unsold merchandise is then returned to the original vendor.
How to Avoid E-Commerce Fraud
The first step in avoiding credit card fraud on your e-commerce site is making sure your payment processing system is secure. A qualified merchant services broker will inform you of additional cybersecurity risks and help you find ways of protecting your business from attacks. If you are an e-commerce site and need assistance updating and improving your security, contact Summit Payments to get started.
Recent Comments