Fraud

Merchants face various risks when accepting credit card transactions. One of the greatest risks to merchants is that of fraudulent transactions. If you are not careful, fraud can cost your business significant amounts of money.
However, some merchants are more prone to fraudulent transactions than others. Merchants should understand their likelihood of being targeted by fraud, depending on the level of face to face interaction with their customers and the type of goods they sell.

Card Present vs. Card not Present

Many fraudsters prefer to make Card Not Present purchases due to the anonymity afforded by these payment methods. Also, Card Not Present situations enable fraudsters to place orders over the Internet or via Mail Order / Telephone Order all over the world. A large amount of credit card fraud is committed in Card Not Present situations compared to Card Present environments.
At all times, the onus is on you to verify the purchaser is the genuine cardholder. This applies to all merchants irrespective of the method by which credit card payments are accepted.

Card Present Fraud Protection

Spectropay merchants will operate primarily in a card present environment, and the main defense against fraud in these situations is to carefully inspect the card to ensure it is genuine, and check that the signature on the back of the card matches the purchaser’s signature on the sales voucher.
The following are additional security checks that should also be performed:

  • Closely inspect the card. Check that the “valid from” and “valid through” dates include the current date.
  • Check that the card has the appropriate security measures.
  • Check that the first four digits of the embossed account number match the four digits printed immediately above or below the embossed number.
  • When tilting the card, the hologram on Visa and MasterCard credit cards should move and/or change color.
  • Where possible, always swipe the card through your terminal. When manually processing a transaction, ensure that you take an imprint of the card, and have the purchaser sign the sales voucher. Check that the signature on the sales voucher matches the signature on the back of the card.
  • On the signature panel on the back of the card, check that the words “Visa” and “MasterCard” appear repeatedly at a 45 degree angle.
  • Check that the abbreviated credit card number on the sales receipt matches the corresponding digits on the card. If the digits don’t match, this is a clear indication the card is counterfeit.
  • Closely inspect both the front and back of the card to determine whether any part of the card appears to have been altered.

Types of Goods Fraudsters Target

Due to their high value and ability to be re-sold, the following types of goods are frequently targeted by fraudsters:

  • Electrical goods
  • Household appliances
  • Jewelry
  • Computers
  • Furniture
  • Goods which are easily disposed of for cash
  • If you are selling any of items, you need to be extremely careful before handing over/shipping goods.

Please Note: The merchant should take all possible steps to confirm that the purchaser is the actual cardholder. This applies to everyone whether selling in a Card Present or Card Not Present environment.

Please read the following for further information: