Credit card companies use complex algorithms and machine learning to detect fraudulent behavior. By using data such as the cardholder’s geographic location, as well as their spending and travel habits, an artificial intelligence program can distinguish a legitimate user from a fraudulent one. Companies also use techniques such as CVV verification (the numbers on the back of your debit or credit card), EMV chips, or address verification for card-not-present transactions.
Even with all of these security measures in place, business owners still have to perform their due diligence to prevent credit card fraud. For in-person transactions, this can mean observing the behavior of the customer and watching for any suspicious activity. It can also include examining the credit cards themselves, checking that the information on the card matches the person attempting to use it. The challenge can be even greater for card-not-present transactions, where a customer only needs the card information in order to make a purchase.
Luckily, business owners aren’t alone when it comes to credit card fraud detection. Finding a card management and POS system for your business can help stop fraudulent charges before they process.
Credit card management systems can give business owners control over their fraud detection solution, with real time alerts and data about fraudulent transactions. Using a combination of machine learning and relationships with financial institutions, a card management system can give you insight into the purchases your customers make, and help you prevent losses due to fraud. This means you can authorize and manage any transaction through a single platform.
You can also protect your business against credit card fraud through the use of encrypted POS systems. A fully integrated payment system ideally comes with its own robust security features. This could include the ability to process EMV chips, which are more secure than the magnetic stripe on the back of a payment card, and can prevent counterfeit chargebacks. Most importantly, a secure POS system will be PCI compliant, which means that is protected by a complex network of encryption that prevents fraud and keeps you and your customers safe.