Contrary to popular belief, fraudsters don’t only target huge ecommerce websites created by e commerce companies. They can do it to any business, regardless if you are a simple startup. In fact, the fraudsters will have an easier time hacking your site especially if you don’t have the necessary resources to secure yourself.
How does fraud affects business?
When there is a dispute on a customer’s account, he/she will eventually call the card company to protect themselves from disreputable sellers. As an aftereffect, you will end up losing your appeals to chargeback. This can only be fixed by presenting diligent records to your chosen payment processor.
Another effect of having excessive chargebacks is having to pay more for payment processing. Take note that the banks as well as card companies will check every chargeback you have and will see if it’s already reached the maximum level.
When unsettled, you might be obliged to pay $100 for every charged-back transaction. Apparently, you will lose a lot of money if that happens. That’s a big nightmare for small businesses!
The worst thing to happen is having your account cancelled. It’s just unfortunate that most card companies will only give merchants a short notice so they don’t have much time to fix everything. Applying for another merchant account will not be easier as it used to be especially if your name was already listed on the MasterCard Alert to Control High-risk Merchants (MATCH) list.
Sadly, majority of small businesses don’t invest in a fraud-prevention team because they are not aware of these consequences. If you own a small business, you could benefit from outsourcing people to help protect yourself from fraudsters. It’s more practical than having to fix chargebacks problem due to lack of security later on.
What does it mean to outsource your fraud protection? It’s about letting others handle this specific concern allows you to focus on the more important aspects of running your business, such as engaging with your customers. Before outsourcing, research a lot about companies first. Check if they will be able to provide real-time protection especially when there are fraud attempts during sales peaks. You would not want to lose a lot of revenue during the holidays just because of fraudsters.
Can you just do things manually, like screen every order you have? Yes, you can do so but do note that this will only work for specific types of business and it does not apply to everyone. If you are a luxury brand, perhaps this is going to work especially when you only have a handful of orders per day. But if you offer a wide range of products and you have a lot of customers, this is not an ideal way to secure your site since this is very time-consuming.
This may also cause false declines, which can reduce your revenue. The bigger effect of declining customers is that those people you declined will not come back again. It creates a big impact on your ecommerce website.