Protecting online retailers from card-not-present fraud

As ecommerce gains more traction with each passing day, there is no better time for small businesses to get onboard and conduct some of their sales online.

Yet the boom in online retail brings fresh opportunities for scam artists to take advantage of the unprotected or vulnerable.

CFIB  can help your business put up a good defense against fraud: we’re publishing a number of anti-fraud blogs this March, which is Fraud Prevention Month.

In the latest edition, the Head of Risk Services at Visa Canada, Gord Jamieson offers some pointers on what to watch for with card-not-present fraud.


vbm_blu_rgb_Reg_72dpiBy Gord Jamieson, Head of Risk Services, Visa Canada

Online shopping is more popular than ever. It’s convenient, there are endless promotions and deals, and Canadians continue to embrace it. In fact, according to eMarketer, global ecommerce sales are projected to reach $3.5 trillion by 2019[i]. So what does this mean for the retail community?

For small businesses that have branched into ecommerce, it means there is a world of opportunity ahead. But consider this: in Canada, 80% of domestic fraud is perpetrated through card-not-present channels[ii]. As more and more businesses begin to sell online, fraudsters have more targets.

There are many tools and tactics available to online retailers to help secure the online channel. Visa offers three services designed to validate payment cards and authenticate the cardholder: CVV2 (or the three digit code), Address Verification Service (AVS) and Verified by Visa (VbV). These are likely familiar to both consumers and online retailers.

As an online retailer, there are other steps you can take to help avoid fraudsters when you are processing orders. The list below outlines some potential red flags that could indicate a suspicious purchase – while they don’t automatically mean fraud is occurring, it may be worth a second look before you Evolution of Security infographiccomplete the order:

  • Larger-than-normal orders
  • Multiple orders for the same product
  • Orders made up of “big-ticket” items
  • Customer requests “rush” or “overnight” delivery
  • Single card used with multiple shipping addresses
  • Billing address different than shipping address
  • Orders have different names, addresses, and card numbers, but from a single IP address
  • Multiple transactions on a single card over a short time period
  • Multiple cards used for a single purchase

Everyone has a role to play in protecting the payments system. Talk to your acquirer and find out if you are making the most of the tools available.


[i] Source: eMarketer July 2015, includes online and mobile ecommerce

[ii] Source: TC40 client fraud reporting in nominal USD (as of 01/04/2016)

2 thoughts on “Protecting online retailers from card-not-present fraud

  1. Pingback: Free Fraud Prevention Poster for Your Business | My Startup

  2. Pingback: Fraud prevention tips from the RCMP | My Startup

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