TechTalkTuesday – Card-not-present fraud

Welcome to #TechTalkTuesday – where tech terms are defined, explained, and no longer a mystery.

Today we're discussing card-not-present fraud. Have you heard this phrase used before? A cybersecurity concern, card-not-present fraud is a form of credit card scam. The customer making the purchase does not need to physically show the credit card to the merchant during a fraudulent transaction.

This type of fraud can take place when placing orders or making payments over the phone or online. Card-not-present fraud is, in theory, more difficult to prevent than card-present-fraud. The merchant isn’t able to examine the credit card to look for any signs of fraud, which may include an altered name, number, or a missing hologram.

Online shopping has seen a phenomenal increase in popularity in the last decade, with the past two years seeing an unprecedented increase. This increase has been one of the factors contributing to the rise in credit card and card-not-present fraud.

Can this fraud be prevented? How can merchants defend themselves against cybercriminals?

  • Many merchants add in an extra validation step and require the shopper enter in the CVV number on the reverse of the physical card. Cybercriminals don’t always have access to this number, which can help to prevent some fraudulent purchases.
  • Some credit card payment processors have put in procedures that can help to reduce card-not-present fraud. This could include ensuring that the customer provided addresses is a direct match with the billing address that the credit card company has on file. There are ways to circumvent this, of course. But it does present the cybercriminal with an extra hurdle to overcome.

Credit card details are often stolen through phishing, or through a data breach that leaves customer’s credit card details vulnerable. Prevention is better than a cure, particularly when it comes to the protection of your personal and financial data.

Be sure to protect your info, be aware of what phishing scams look like, and cancel your cards if there are any signs of the numbers being compromised. As a business, you can invest in an authentication and verification solution that will protect your customers and your bottom line.