With an increasing online interaction between businesses and customers, many frauds are taking place every day, causing a handsome amount of damage to the consumers and businesses equally.
This digitization of the business and threats that come along with it require advanced technological solutions to cope with them. According to research conducted in 2018, 63% of the businesses fell prey to online scams. This increased ratio of online fraud requires special attention, else, customer trust in online business will be lost.
So if you are running an online business or are planning to venture online market, here are some useful tips for preventing fraudsters and ultimately earning customer trust.
1. Properly Understand The Onboarding Process
Whether you are an online retail store or service renders, having an effective onboarding process is significant for your business. This will help you not only in filtering suspicious clients and fraudsters but will be of assistance in building long term customer relationships.
However, it is critical to make the onboarding process robust as well as customer friendly. Manual onboarding checks could be hectic for the consumers and are the reason that most customers opt-out at the check out process while purchasing online. So you must employ an automotive KYC verification system when onboarding.
2. Adopt Secure Payment Methods
Payment and credit card frauds are the most common type of online frauds. Statista reports that only in the US, merchants lost $6.4 billion due to these frauds. Online startups might manage few transactions daily, but as the business scales up to hundreds and thousands, the number of transactions increases and this is where businesses need to be cautious and adopt secure methods.
For this purpose, you need to read out and comprehend the security policies of the payment service providers. Whether you use PayPal, MasterCard, Visa, or any other it is important to understand the policies, which could impact your business.
3. Avoid Being Victim To Chargebacks
What if I tell you that banks are more than happy to accept chargeback claims from the customers? Sounds intriguing? Let me explain it using an example. Suppose, a purchase of $100 is made using a credit card issued by some bank named X. Now the bank will receive $25, as an interest in 5 years from the customer and if the customer pays it before 5 years the bank will even receive less than.
Simple isn’t it? How about adding a bit twist here? Suppose for some reason, the card-holder requests chargeback, and claims that the card was stolen. The bank accepts the claim and asks you to return $100 plus a chargeback fee of $25. Which scenario do you think is more profitable for bank X? The bank will prefer the second option.
When it comes to chargeback it not you vs the fraudsters, it’s you vs scammers and banks. So it is better to take precautionary measures. You can use identity verification APIs, which will reduce the chances of credit card fraud.
4. Practice KYC Checks To Combat Identity Theft
Identity theft is one of the major concerns for business both online and on-site. FTC states, more than 1.4 million identity theft cases were reported in 2018 only. Avoiding identity theft is significant for your business. To prevent frauds, you must exercise common KYC checks now and then.
What are KYC checks that online businesses should practice?
- Sending Confirmation emails to authenticate the email address.
- Using 2FA (Two-Factor Authentication)
- Verifying shipping address using authentic documents such as ID card or utility bills and authenticate it against credit card billing address.
- Employing biometric authentication techniques such as fingerprint authentication or facial recognition.
Using these checks most of the online identity frauds can be avoided easily.
If you are new to the online market place and want to grow your business these useful tips will help you avoid these issues and focus on business development.