Online businesses can be more vulnerable to fraud than traditional companies. This is mainly because transactions are made virtually; hence the owner cannot witness them to ensure that the person making the payment is in fact the owner of the card being used.

There is also the potential danger of cyber-criminals getting hold of cardholder data and using it to make fraudulent transactions.

However, thanks to advances in anti-fraud procedures and software, it is now harder than ever for criminals to make fraudulent purchases.

One of the major ways in which card issuers try to protect shoppers and businesses alike is through the rigorous process of PCI DSS Compliance. All online businesses in the UK that store, process or transmit cardholder data are required to comply with PCI DSS.

Because the standards in terms of infrastructure and procedures set by the organisation are so high, many businesses opt to work with payment service providers (PSP’s) who have already been approved, instead of trying to fulfil all of the obligations themselves. This takes a lot of hassle away from the process of becoming PCI Compliant.

Additionally most online enterprises also decide to allow PSP’s to store their cardholder data, which means that they do not have to go through the difficult process of setting up secure servers in their own offices.

All this goes a long way to ensure that when consumers make card payments, they know that their details will be kept safe and secure.

Payment service providers will also offer online retailers anti-fraud software. This is to lower the risk of a stolen card being used in a transaction.

3D Secure is the most common among this type of programmes. It asks customers to set-up a special password for each of their cards; customers then have to enter it when completing online payments. That way if somebody tries to make a purchase with a stolen card, they will not be able to do so, unless they guess or somehow get hold of the password.

The 3rd Man is also widely available anti-fraud software. It allows retailers to review transactions for up to two hours after they have been made. This gives them a chance to refuse payments which they may deem unsafe. The software also accesses a large database of previous transactions made around the world, in order to check whether any of them look unusual. It gives each transaction a score, which informs business owners of how secure they are, allowing the seller to take control of payments which go through their online shop.

Many PSP’s may also offer their custom anti-fraud software to merchants. It should be one of the aspects traders ought to take into consideration when choosing their PSP.

There are no guaranteed means of avoiding fraudulent transactions, but the above solutions can certainly help minimise the risk.