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Front-line protections
Insider’sreport
on payments: With the advent of EMV (Europay, Mastercard and Visa),
a significant amount of payment fraud is moving online.
However, many merchants aren't EMV compliant. I'm
amazed at the number of retail locations that aren't using
chip-card readers two years after EMV compliance rules
took effect. Those rules put the financial onus for fraud on
Don't let card fraud noncompliant merchants. Regardless of EMV compliance
status, both online and offline merchants can take steps to
minimize exposure to fraud.
spoil holiday cheer Ongoing employee training is one important step.

By Patti Murphy Merchants should instruct front-line employees to be
suspicious of transactions containing multiple fraud-
ProScribes Inc. prone items (for example, three gold watches). At brick-
and-mortar locations, cashiers can be trained to spot
ith the 2017 holiday shopping season in full suspicious customer behavior and cards. Customers
swing, all signs point to healthy consumer who appear nervous or agitated, for example, or who
spending. "Coming into this holiday season, purchase unusual amounts of expensive items, deserve
W shoppers have seen an increase in personal closer scrutiny. Brick-and-mortar personnel also should
income – especially disposable income – which is helping be requesting IDs and verifying signatures on all card
to build off a 2016 holiday season that was one of the best transactions.
in years," Jared Drieling, Director of Business Intelligence
at The Strawhecker Group, said in November. Online fulfillment personnel should be on the lookout
for multiple orders that are destined for the same address
But this could prove a double-edged sword for retailers, but initiated using different credit cards. Different bill-
since what many law-abiding citizens see as the "season to and ship-to addresses may signal potential fraudulent
of giving" is the "season of taking" for fraudsters. Fraud transactions. Ditto for orders seeking immediate or
is an ever-present and continuously growing threat to overnight delivery. Consider requesting online buyers
payment cards. According to the web portal Statista, fraud to provide additional information, by phone or email, to
will siphon $8.6 billion from financial institutions and complete high-value transactions. Legitimate customers
merchant balance sheets this year. The biggest drain, at an should have no problem providing the information;
estimated $5.2 billion, is expected from card-not-present fraudsters likely will be scared off.
transactions.
Customizable approaches
Indeed, a combination of recent events and trends – Merchants can also employ customized approaches to
including massive data breaches that compromised address fraud. This can be particularly advantageous for
the personally identifiable information of hundreds of online merchants. One technique gaining traction is setting
millions of consumers, ongoing ecommerce growth and up rules for flagging specific orders for review, such as
continued reliance on magnetic-strip card technologies – those originating from certain IP addresses or countries,
practically guarantees surges in card fraud attempts this or those exceeding established dollar thresholds.
holiday season and into 2018.
Merchants can and should also keep track of their
ACI Worldwide Inc. is predicting a 30 percent increase in experiences with fraudsters. Maintaining databases of
payment fraud activity across channels this holiday season, prior fraud attempts, problem customers and chargebacks
vis-à-vis 2016. The average ticket value of fraudulent that incoming orders can be checked against can be
card transactions is expected to rise from $210 to $215, valuable. It can be equally beneficial to maintain and refer
as fraudsters hone in on high-ticket items, according to to records on good repeat customers, since they are less
ACI's analysis. "Fraudsters continue to target electronics likely to be engaging in fraud. All of these records, of
and home goods – and show preference for immediate course, will need to be encrypted.
purchases like buy online, pick-up in store and next-day
delivery," said Erika Dietrich, Global Director of Payments Payment card fraud is not static. Fraudsters are good at
Risk Management at ACI. adapting to market and technology changes. Merchants
and their payment services providers must be adaptive,
No card-accepting business is immune to the scourge of too, and proactive in combatting card fraud.
fraud. But businesses can take steps to minimize their
chances of being victimized. With criminals upping their
game, now is a good time for ISOs and merchant level Patti Murphy is Senior Editor of The Green Sheet and President of
salespeople to remind clients of steps they can take to ProScribes Inc. She is also the founder of InsideMicrofinance.com. Email
combat card fraud. her a patti@greensheet.com.
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