As soon as cash appeared, counterfeiters started to forge it. In the same way, the first online fraud cases were committed at the very beginning of the Internet. Thieves offline constantly improve their illegal skills, and online scammers also hone their approaches to stealing money from businesses and private individuals. They keep up with the times and adapt to technological developments to benefit from them, like cryptocurrency. This is why it’s crucial for entrepreneurs to be on the alert and prevent fraudulent attempts during online payments.

The damage from scammers’ activities amounts to tens of billions of dollars annually. And the sum is only growing. The recent Guardian, Die Zeit, and Le Monde investigation showed a striking example of falling for the online bait. It tells the story of a Chinese criminal group that managed to organise an extensive network of fake online shops offering premium brands products at a discount. The damage could amount to up to 50 million dollars, with approximately 800,000 victims from Europe and the USA.

Types of Payment Fraud

For decades of internet development, there have been a lot of ways of payment fraud. Among them are the following:

• Phishing. Scammers try to get access to valuable personal information via fake emails and text messages. They act like fishermen, urging to bait careless users. That’s how this criminal method got that name.
• Card-not-present (CNP) fraud. With technological improvement, when a physical card is no longer required to make a transaction, this new swindler approach appears. Criminals get stolen card information from data breaches, the dark web, or phishing schemes and conduct financial transactions to their advantage.
• Account takeover (ATO). Fraudsters seize control over a customer’s account, often by stealing login credentials. This allows them to make purchases, change account information, or transfer funds. This approach is hard to notice until significant damage is done.
• Merchant Fraud. Our example of online crooks from China above is of this type. Fake online stores attract users with great deals and leave them with nothing.

Fraud-Prevention Ways

Usually, it may be too late to stop the fraudster’s actions at the moment of their committing. The most effective way is to avoid them whatsoever. For this, you should follow these fraud-preventing steps:

• Give preference to online transactions over any other payment options. They are much more secure from fraudulent attacks. ACH and wire transfers are two excellent choices for protecting your payments.
• Obligatory authentication required on both sides of transactions. As the previous method keeps your money and sensitive data from hackers, this one helps you protect yourself against account takeover attempts. There is also Strong Customer Authentication, which demands two of these three data details: a password, a biometric authentication, or a one-time parole from a smartphone. Implementing this protocol will be very useful for any company.
• Fraud-prevention education. Many fraudulent attacks are based on manipulating employees to obtain important information or access to a business account. That’s why educating customers about safe payment practices is crucial. This concerns not only lower—and middle-level employees but also top management first and foremost. They have the authority to confidential information and, therefore, are of most interest to scammers.
• Use payment orchestration as a fraud detection tool. Payment orchestration platforms are equipped with AI and machine learning models for fraud detection. Crossbill helps you implement a proper payment orchestration platform to protect your online payments and also improve your financial performance.

Losses from Internet rooks activities are calculated in amounts that make up the budget of an average country. That’s why fraud-protection efforts are not just a requirement of justice but also a tool ensuring potential profit. Don’t hesitate to contact us to keep your transaction and sensitive data safe with the best professional help.