What are the risks of online retail payment fraud in foreign trade?

Why pay attention to fraud from consumers (investigative)? Because of the reality of some situations, the online shopping market, online retailers are more vulnerable to the risk of payment fraud, but also online sales enterprises face the primary risk. Some fraudsters are well versed in computer networks, creating advanced and convincing fraud to obtain credit card information. For example, use counterfeit e-mail and phishing: Forge emails or phone calls from banks or vendors to request account and password information. These frauds are full of tricks in their artful disguise, from the simplest to the most complex deception makes it difficult to distinguish between true and false, and ultimately deceived. Sometimes through Trojans and web site grafting makes a lot (and sometimes thousands) of people are victims, because the base is so large that a small success rate means that many people have been stolen credit card information or even the accompanying password.

Fraudsters often target the most vulnerable links, and as a result of changes in the payment environment, fraud is changing. Using a credit card on the line requires a plastic card with a chip and password. And it is in the presence of the cardholder in the environment to sign, there is a huge protection behind the transaction, but online shopping in the Internet does not require the use of chips, passwords and signatures, fraud only need to steal credit card information, Fraud can be carried out so that identity theft aimed at consumers is becoming more common. Shopping websites may suddenly encounter fraudsters trying to use stolen identities, account information, or even passwords on your site. Because these are virtual environments where these protections do not exist, marketers are more likely to receive fraud.

There is another word on the internet that is often used to describe fraud, a term that is scam. The term means to use an improper conspiracy to gain benefits. While online trading has great potential, it is unfortunate that its success has also led to the coveted interests of a wide variety of fraudsters, using illegitimate means. The use of stolen credit card information for online shopping is the main case of fraudulent shopping sites, of course, there are consumers of malicious fraud. Fraud on the Internet, from the credit card system to the vast majority of fraud. How do fraudsters use the credit card system to make real time scams? If you are running an online retail business, the following examples of fraud may be frequently encountered:

Example 1: If you sell your mobile phone online and send it to a fraudster through a Third-party logistics company, the fraudster himself makes a change to the phone and then claims that "the product is not in line with the description on the Web" and claims that you sent him a poor quality product or faulty product. At this point, the credit card company will ask you to give him a refund before he returns the phone.

Example 2: If you sell a computer online, deliver it to a fraudster through a Third-party logistics company. The fraudster took the computer and then removed the expensive parts from it, then declared to his credit card bank that "the product was damaged" and complained that the computer you sent to him was not available. At this time, the credit card company will ask you to give him a refund before returning the computer.

Example 3: Another situation is when a third party logistics company delivers to the fraudster's home, the fraudster lets one of his friends wait at his door and then lets him sign off on your behalf. Then, claiming to his credit card bank that "no goods have been received", complained that you did not send him a shipment, or that the shipment was lost. At this time, the credit card company will ask you to give him a refund, you will suffer double loss.

Example 4: The fraudster will also place an order and then ask you to deliver to an address provided by the fraudster, but this address is not his real billing address when someone has signed for it. He declared to the credit card bank, "this shopping is not authorized", is someone else impersonating him, using his credit card to buy. At this point, the credit card company will ask you to give him a refund and you will suffer double losses.

The main means of online payment fraud is that fraudsters use credit cards to chargeback the above examples are chargeback by fraudsters. Credit card chargeback is the card holder (through the card issuing bank) who rejects a credit card payment. If the consumer has a dispute with the merchant after shopping on the shopping website, the consumer has the right to use chargeback to refuse to pay the merchant. The process of dealing with chargeback will be very troublesome and frustrating. When the merchant receives the notice, the merchant has to provide the evidence to solve this chargeback, if the document that provides obtains the credit card issuing bank approval, the consumer's chargeback request is rejected, the account is paid. However, if the document is not approved by the issuing bank, the chargeback will be executed successfully and the merchant will have to refund. Unless you make a further appeal, it will take a lot of time and money. Typically, a consumer can make a chargeback request within 60 days of completion of payment.

As the Internet, consumers and merchants are often far away from each other, so consumers chargeback, the merchant is in a very passive position, because the merchant is difficult to prove to refute consumers. When the consumer claims that the goods he purchased have never been mailed to him, when the consumer claims that the goods are not in conformity with the product, or claims that others have stolen his credit card, in most cases chargeback will be established by the bank. The bank always executes the chargeback before asking you to communicate with the consumer to resolve the dispute.

When you want your payment provider to complain, they will say "please send me a detailed document of this transaction." "When you send out all the documents about the deal, they'll spend some time telling you," the consumer says his card was used without his authorization. There's nothing we can do. "Credit card companies have different rules and regulations to chargeback consumers, but most of the time these terms are good for consumers and not for businesses." So even in the usual way, businesses have the right to appeal, but most of the time, you will still suffer losses, because they do not want to spend a lot of time and resources to protect your interests. Appeals chargeback dispute handling will cost you a lot of time and energy, so be sure to avoid them as much as possible.

The risk of online fraud may seem small, but once it happens, it can be a big loss. For example, a credit card withdrawal is generated when payment fraud occurs, which can greatly affect profits. The online sales store not only loses the proceeds of the transaction, it may also lose the items that have been mailed and may be penalized, such as facing a fine of the credit card organization and depriving the Merchant of the right to accept credit card payments. Due to the chargeback of payment fraud, this will make your online sales become very bad. In the most serious cases, your business account will be frozen by the bank, you can no longer accept credit card payments, the entire online sales business will be interrupted, the resulting loss can be imagined.

Credit card organizations closely monitor businesses to reduce losses and prevent fraud by reviewing the activities of their businesses and keeping a close eye on whether their credit card return or unusual transactions have continued to appear or remain high. It is important that the merchant must control the withdrawal form below 0.5% of the total credit card transaction, because once the withdrawal rate exceeds this limit, many credit card companies will start to strictly check the transaction. If a credit card company determines that a merchant's business has an excessively high rate of fraud or withdrawal, it may impose fines on the merchant, restrict sales and other penalties, including depriving the merchant of the right to accept credit card payments. Each credit card company has its own way to monitor the return rate of a merchant and force it to ensure that the ratio is below a specific limit.

The closure of the business account as a result of chargeback will disrupt the commercial continuity of online sales sites, which could be a fatal blow to the light assets online store, which could easily lead to a break in capital flow. And the closure of the business account will be a very difficult thing to do, the need to provide a wide range of complaints information, waiting for a lengthy review process.

For a single fraudulent order, the loss to the online sales store is not negligible. First of all, loss of this order of goods, secondly, the cost of dealing with this transaction is also a great loss, such as procurement, warehousing, transportation and so on to spend money, for foreign trade retail shop, shipping to overseas buyers of logistics costs are often higher than 100 yuan, which is also a small loss. Again, facing the bank's fees, whether it is to collect money or refund money, will bear the bank's handling fees, the transaction fees are often more than 5% of the order amount. In the end, other business opportunities will be lost because of the waste of time that could have been more profitable.

So for businesses, should be kept abreast of online fraud fraud. There are a number of useful sites that are anti-fraud, such as http://www.cardwatch.org.uk/, where you can learn almost all of the credit card fraud information, as shown in Figure 7.1.

Figure 7.1 Anti-fraud website Cardwatch

Although there are various risks to the Internet business, we must face these risks, although we can not safely avoid the occurrence of fraud, but we have to control this risk. Creating chargeback in these frauds is a major risk. The chargeback is disputed by the cardholder on the transaction (stresses), which causes the credit card processing bank to retrieve the rejected transaction amount from the merchant's account and refund the cardholder. There are many reasons for chargeback, such as: return, cancellation of service, disputes, errors in trading and fraudulent transactions. Chargeback happens to be a loss in the credit card transaction, the merchant should avoid the chargeback, for example: to ensure the customer satisfaction in the transaction as far as possible, and handle the transaction correctly.

For the limited resources of the online sales business, fraud from consumers is a very serious threat, and even many businesses because of this failure. To keep your online business alive, you need to learn how to control the risk of payment fraud. Knowing and understanding the risks of online payments can help you prepare for the real fraud and avoid unnecessary losses. Accumulate some experience of fraud prevention and apply it to the actual order receiving business, which is the work that the order Processing team of each online sales website must do.

The author has successfully operated a number of foreign trade and domestic business platform, on these platforms to sell a variety of products. In the early days, we were not very familiar with the advanced anti-fraud technology, which caused a lot of losses and problems with the payment platform. Later, we put a lot of effort to prevent online payment fraud, through unremitting efforts, reduced about 90% of online payment fraud. And the total payment fraud control within 1 per thousand. This chapter explains in detail the solutions to prevent payment fraud, which is the world's leading provider of technology and experience in preventing credit card fraud.

This digest has been published in the "online payment-network business Success"