4 Fraud Prevention and KYC Tips for Small businesses Clients

A screenshot of a cell phone

Running online business is a daunting task as it comes with many challenges. It is difficult to validate that if the customer you are dealing online is real and is actually who he says he is. There are a lot of issues that come with inauthentic people, businesses have to deal with many unauthorised transactions which result in chargeback  frauds leading to more financial losses. 

It is a punch to the gut for E-Commerce businesses to receive a chargeback notification. To combat credit card frauds, the owners have to make sure that the order has been placed by the real card holder to spot and halt fraudulent transactions. 

Here are 5 quick tips for online businesses to detect and put a halt on frauds:

  • Use Digital Identity Verification Solutions:

To know who you are dealing with identity verification solutions play a crucial role. These solutions are to be deployed in a system in order to mitigate criminal activities. These solutions are powered by artificial intelligence. These services streamline the whole process of identification and are mandatory to fulfil KYC and AML controls requirements as per regulatory authorities. 

By using biometric technology the customer is verified using his unique facial features that are to spoof in this way a business is always sure of who he is dealing with and helps to curb the scamming activities. In this, the person is screened against many sanction lists and PEP lists to check if he has a criminal record. By this screening high risk clients can be verified.  

  • Use Digital Address Verification Services:

AI-based address verification services provide automated fraud prevention systems that are designed to reduce the risk of fraudulent transactions. These solutions by shuftipro are used to compare the billing address supplied by the customer when they checkout with the address the issuing bank has on file. This technology is an indicator that you need to take a better look at the other risk factors on the order. 

These services validate the GPS location of a person ordering too. The transactions that are the most secure are those where the shipping address, billing address and IP address are similar. Transactions should be monitored and if these show long distances between these different addresses should be scrutinised more carefully. 

Fraudsters try to mask their real IP addresses so you cannot see from where they are placing orders so by integrating such solutions in their systems businesses can verify the real address of individuals.  

  • Be Vigilant in Shipping Destination:

Fraudsters try to  ship their ordered products to addresses which are different from the billing address. Such orders that differ in billing and shipping addresses are at higher risk of scams. Such orders must be red flagged by the businesses.  

  • Look Out for Patterns

If you see multiple failed purchase attempts by the same person but with different card numbers, there are higher chances of  a non-fraudulent transaction coming from that batch is slim. Not to forget, once a fraudster is successful, they will try again for sure. Business must blacklist such phone, Email, billing address so that fraudsters cannot use them again for placing orders online. 

 Many online businesses are in a state of battle against fraud prevention staff that can review all high-risk transactions. Every company that sells goods or services online should have some fraud prevention strategy in place, no matter the size of business, or what method they  choose. 

Businesses don’t want to learn the hard way. Adopting such identity verification technology and tips save businesses from falling in the pit of fraudsters and from paying hefty amounts of fines to the regulatory authorities. 

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GabrielLuke
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Writing on Technology, AI, Security Issues, Business and Gaming is my passion.

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