4 Ways Businesses Can Avoid Credit Card Fraud - Helping Small Businesses Thrive 4 Ways Businesses Can Avoid Credit Card Fraud - Helping Small Businesses Thrive

4 Ways Businesses Can Avoid Credit Card Fraud

With counterfeit card fraud still a big problem in the U.S., you owe it to your business (and yourself) to take safety precautions. Your business could financially suffer and you could lose customers as well.

“Protecting your customers’ information is incredibly important because they want to know that their merchant is doing everything they can do to protect their data,” said Jason Oxman, chief executive of the Electronic Transactions Association in Washington, D.C. To ensure you don’t have to go through these hassles, we tapped Oxman for some tips to help you avoid credit card fraud at your business.

  1. Upgrade to Chip Readers

“The most common form of fraud in stores in the U.S. today is counterfeit cards,” said Oxman. He says that the best way to stop counterfeit use is by upgrading to chip readers, which are used to read chip-equipped cards. Though credit cards with a chip have not been standard for long, they’re becoming mainstream — just look at modern credit card offers — and considered more theft-resistant than old-school cards with magnetic stripes. “Fraudsters will seek out merchants who haven’t upgraded [their terminals],” Oxman warned.

Another reason for your business to get on board with EMV chip cards? Merchants “don’t have liability for that card fraud if they’ve upgraded to a chip reader,” said Oxman. “Those who haven’t will be liable,” generally, and those losses can add up.

  1. Secure Network Access

From encrypting information to keeping databases on lockdown so no one can access them, it pays to secure network access, said Oxman. Smaller merchants will want to make sure they use different computers for managing their network and browsing the web, and employees in general should be aware of the dangers of phishing, or what happens when you click on a suspicious link that downloads malware onto your computer. Beyond that, “make sure you’re using the latest and most updated version of software,” said Oxman. “Security software is updated frequently,” so if it’s been awhile since your upgrade, your version may not be secure.

  1. Consider Tokenization (& Mobile Pay)

“Tokenization essentially replaces hard numbers with a token, which is a mathematical representation of an account number,” Oxman said. And those numbers change every time, so if a system is breached, there won’t be anything to steal.

“Tokens can’t be used to access actual account numbers,” he said. However, mobile payment services like Apple Pay, Samsung Pay and Android Pay all use tokenization. “When someone pays with those, they’re not transmitting their real account data,” said Oxman. “That’s a pretty secure way to pay as well.” Some systems, like Apple Pay, even require a fingerprint, which is difficult for a thief to accurately duplicate.

  1. Follow PCI Security Standards

Following the safety precautions set forth by the Payment Card Industry is a great way to arm your business against credit card fraud, said Oxman. The security standards, designed to help organizations of all sizes securely accept, transmit and store cardholder data, can be found online and help you every step of the way. Regardless of how many cards you swipe, you’ll learn how to test your payment framework for compliance, weak spots and more. “Following PCI standards is best practice for securing against any kind of fraud,” said Oxman.

Jill Krasny is an editor and reporter at Credit.com. Prior to joining the company, she was a senior writer at Esquire.com and Inc. Magazine, where she covered a range of lifestyle and business topics. Her work has appeared in Mashable, Travel + Leisure and MTV.

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