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Communication-Based Methods
The primary technology for securing transactions as they are transmitted over the Internet is Secure Sockets Layer (SSL). SSL “encrypts” confidential data (i.e. converts it into an unreadable form) to ensure that unauthorized individuals are not able to view or modify it as it is being passed between the customer, the merchant’s website and TransActive. The merchant’s order form must be secured with a “digital certificate” to establish an SSL connection with the customer. Customers can be confident that their payment session is secured using SSL when they see the “closed lock” at the bottom of their browser. Digital certificates can now be purchased directly from Skipjack Business Network at biz.skipjack.com.
Storage-Based Methods
Once the order information reaches the payment gateway, it must be securely stored in order to reduce the risk of “hackers” gaining access to confidential information via the Internet.
When securing credit card information, most payment gateways encrypt (secure) the entire database. The problem with this approach is that, if the database is compromised, a hacker can gain access to potentially thousands of credit card numbers for fraudulent use. With TransActive, each transaction is individually encrypted using patent-pending security technology. Even in the unlikely event that one transaction is compromised, all other transactions remain secured.
Using Sound Business Practices
Although there are many technological tools available in the fight against fraud, one of the best tools available is good business discipline and judgment.
A number of good business practices can help reduce fraud:
1. Spend time validating each order, particularly ones where the shipping and billing addresses are different or where the email address is from one of the free email services
2. Ask for complete information at the time the order is made
3. Be extra careful of overseas shipments
4. Don’t ship to PO boxes (insist on a physical address)
5. If you’re unsure of anything, call the customer directly
Summary
No single method of fraud prevention is foolproof. The key to fraud prevention is to leverage appropriate technology and apply sound business judgment to all transactions.
This article is contributed by Robert Levings of TransActive.
TransActive is a leading supplier of payment processing solutions to businesses across North America. Offering world-class solutions at affordable prices, TransActive helps merchants simplify the process of acquiring, launching and using payment solutions to improve the way they do business. Visit us at www.TransActive.ca.
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