6 steps to help prevent fraudulent payments.
An attack like that can be very damaging. At the very least, if you accept a fraudulent payment, you could be held financially responsible for the loss. But there are steps you can take to help minimize your risk, and we’ve outlined them below.
How fraudsters operate.
Before we talk about what you can do to minimize your risk, it’s helpful to understand common tactics fraudsters use. Generally, online fraudsters usually use two methods to steal money:
- Account takeover: You probably provide customers with accounts that store personal information, financial information, and purchase history. Fraudsters often hack into these accounts through phishing schemes. In one of the most common, fraudsters send emails to trick customers into revealing usernames and passwords. The fraudsters then log in to your customers’ accounts, change the passwords, and make unauthorized purchases.
- Identity theft: Although most businesses take many precautions to secure customer data, fraudsters still manage to hack into databases and steal usernames, passwords, credit card numbers, and personal information.
Managing your risk.
Although the potential for fraud is high in online transactions, it doesn’t mean you must accept it as part of doing business online. By putting the right tools and processes in place, you can help keep your business and your customers secure – and reduce your chances of drowning in chargeback fees and lost revenues. Below are six tips to help you get started and once you’ve checked these off, make sure to review the 13 signs of unusual buyer activity.
1. Monitor transactions and reconcile your bank accounts daily.
Nobody knows your business as well as you do. You know your biggest spenders and their buying patterns. Monitor your accounts and transactions looking for any red flags, such as inconsistent billing and shipping information, as well as the physical location of your customers — there are tools that trace customers’ IP addresses and alert you to those from countries known as a base for fraudsters.
Also, check to see if your customers are using free or anonymous email addresses (such as Gmail or Yahoo email addresses), as there’s a much higher incidence of fraud coming from free email service providers than from paid.
2. Consider setting limits.
Using your unique knowledge of your business, set limits for the number of purchases and total dollar value you’ll accept from one account in a single day. It can help keep your exposure to a minimum should fraud occur.
3. Use the address verification system (AVS).
AVS compares the numeric parts of the billing address stored within a credit card to the address on file at the credit card company. This is a fraud tool included in most payment processing solutions, but check with your payment processor to be sure it’s supported.
4. Require the card verification value (CVV).
You’re familiar with this three-digit or four digit security code printed on credit cards. What you might not know is that PCI rules prevent you from storing the CVV along with the credit card number and card owner’s name. (That’s why it’s so effective – it’s virtually impossible for fraudsters to get it unless they’ve stolen the physical credit card.) Most processors include a tool to require CVV as part of their checkout templates. Use it.
5. Get tougher with password requirements.
Hackers employ sophisticated programs that can run through all the permutations of a password. It won’t take them long to crack a four digit, alpha-numeric password (such as, “abcd”). Best practices these days call for (at least) an eight-digit alpha-numeric password that requires at least one capitalization and one special character (for example, “P0r$che9!!”). Your customers might grumble, but it’s better safe than hacked.
6. Keep your platforms and software up to date.
Make sure you’re running the latest version of your operating system (OS), as OS providers continually update their software with security patches to protect you from newly discovered vulnerabilities, as well as the latest viruses and malware.
Likewise, install and regularly update business-grade anti-malware and anti-spyware software (free, limited-feature, and consumer-strength anti-virus software are not sufficient) to prevent attacks that exploit outdated software vulnerabilities.
Note: If your site is hosted on a managed solution, such as BigCommerce, automatic security patches help ensure that any vulnerabilities are quickly resolved.
Once you’ve taken these steps, learn the 13 signs of unusual buyer activity to be aware of.
1 48% of Businesses Think They’re Not Big Enough to be Targeted for Fraud, Small Business Trends, March 10, 2019.
2 Consumer Sentinel Network Data Book 2018 – February 2019, Federal Trade Commission, 2019.
Frequently asked questions.
PayPal lets you quickly and securely send and receive money for goods, services and more.
With PayPal you can:
- Shop online in more than 200 countries and regions.  >
- Send money securely to friends and family around the world.  >
- Checkout quickly at hundreds of your favorite online stores.  >
- Accept credit cards on your website.  >
- Make donations to your favorite charity.  >
- Set up an online shop and receive payments.  >
- Use your credit card and earn rewards.
At PayPal, your financial security is our highest priority. We use the latest anti-fraud technology to help make sure your transactions are safer and you’re 100% protected against unauthorized payments sent from your account.
As PayPal has been evolving our business alongside our merchant business partners, we have accelerated the rollout of new products, features, and capabilities, delivering more benefits than ever before. PayPal is focused on helping drive growth for businesses of all sizes online and in person.
Additionally, we are continuing to invest in our platforms to enhance payment experiences, provide greater choice for the way people pay for goods and services, improve fraud and Seller Protection, and increase security measures to help give people peace of mind when transacting using PayPal. Customers who choose PayPal as a payment method are
60% more likely to convert than customers who do not choose PayPal as a payment method. *
*comScore online panel commissioned by PayPal, Q4 2017-Q1 2018
- No advanced programming is needed.  >
- Your customers don’t need a PayPal account to pay you.  >
- It’s optimized for customers on smartphones or tablets.
What can I do with PayPal Payments Standard?
PayPal Payments Standard lets you accept credit and debit cards on your website or through an online marketplace such as eBay or Etsy. Buying is straightforward: We handle the checkout process and then send customers back to your site. Fees are a flat amount per transaction, so selling is just as simple. To see all discounts and fees, take a look at our fees page.
You can use PayPal Payments Standard to send invoices online too, so you can get paid sooner. For offline payments, you can add PayPal Here, a mobile payments solution, to your account to let you take payments on the go using your smartphone or tablet. (alternate rates apply).
With PayPal Payments Standard, you’re also eligible to apply for the free PayPal Business Debit Mastercard®.
As with all of our payment solutions, PayPal Payments Standard helps protect your business with our Automatic Fraud Screening, industry-leading data security and reliable customer service.
Get Started Now.
Payflow Link is cost-efficient, PCI-compliant, and works with your existing merchant account. At checkout, your customers enter their payment details on a secure, PCI-compliant template hosted by PayPal. You can choose to integrate our embedded template (which sits right in your website), or you can choose a customizable full-page template. All templates include PayPal and PayPal Credit, so your customers have more options to pay. Payflow Link has no setup or monthly fees.
Payflow Pro is a fully customizable gateway, so you can build a checkout experience as unique as your business—from language and layout to page sequence and PCI compliance options. You can add a PayPal button to help drive more sales, or use our hosted pages and offer PayPal Credit, too. Payflow Pro has a $99 setup fee and a monthly fee of $25.
There are optional features such as additional fraud protection, recurring billing and buyer authentication. Click here to see pricing.