Mitigating E-Commerce Fraud for Small Business in the New EMV World

November 24th, 2015

With the implementation of EMV in the USA consumer marketplace, fraud has made a shift from card present transactions to the e-commerce world. Merchants taking payments on the Internet through an online store need to take extra care when it comes to screening online transactions. Here are a couple of strategies that can help mitigate e-commerce fraud:

  1. Proximity of the customer – Most of your customers should be fairly local or from surrounding states. Unless your product is highly specialized, there is little reason why a cardholder from Washington would buy 4,000 generic widgets from you in Florida.
  2. Accept a different form of payment on large first orders from new customers – By accepting this different form of payment, such as a wire transfer, you will guarantee payment and know this new customer is legitimate. Fraudsters will not wire you money, real customers will. Once you are comfortable with the new customer, and successful wires have been receive for past orders, you can begin to accept credit card payments from them.
  3. If it sounds too good to be true, it most likely is – It is smart for a small business owner to see more than just  dollar signs when it comes to accepting credit card payments. If the final payment is the only thing taken into account, they will most likely, at one time or another, be out that money and product. A common scenario for small business fraud is for a new “customer” to call unsolicited and want to buy a large number of a certain product as a rush order. The “customer” will then want to split out the large transaction on a few different cards. Turns out these cards are stolen and they are trying to see which cards work. The starry eyed small businessperson accepts the payments and ships the product. When the legitimate cardholder for those stolen cards looks at his/her credit card statement they see the fraudulent transaction and initiate a chargeback. The small businessperson then will be debited for that chargeback and their product is long gone.

To recap, with the implementation of EMV, credit card fraud is shifting to e-commerce environments. Always check the proximity of the cardholder from your establishment, accept a different form of payment for large first orders from new customers and if it sounds too good to be true, it most likely is. Protect your company and finances from fraud that can easily be mitigated to ensure continued success of your small business.

To learn more about SignaPay | PayHub solutions –Flexible Pricing, Frictionless Applications, Click-to-Agree, Equipment and Analytics and EMV Liability Shift go to or call us at 866.790.3995.