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Friday June 25, 06:42
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Precautions Limit Risk Of Overseas Online Orders
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International online orders can be risky for businesses, which take full liability for any fraudulent credit card purchases at their web sites, but the taking of certain precautions outweighs the risk. If a customer asks an e-tailer to split a large transaction between several credit cards, for example, the e-tailer should contact that customer to verify the payment. Criminals know that purchases in the low thousand-dollar range slip below the radar of the merchant banks clearing the order, while e-tailers are not always aware that they are not allowed to split card transactions in case of fraud.
Contacting customers to verify card transactions may help e-tailers to deter fraud, while improving customer service, but this approach is not practical for sites with huge transaction volumes and requires a degree of intervention. Credit card authorizations, for their part, only prove that a card number is correct, a line of credit exists and that the card is not been registered as stolen. US-based e-tailers needing to check if a suspect transaction is fraudulent can however use a service called “code 10 authorization”, which lists credit cards that are lost, stolen or suspected of fraud.
Just 59 per cent of large and midsize e-tailers in the US accept overseas orders online, according to CyberSource, which implies that 10 to 20 per cent of potential orders are being missed out on. In this context, businesses verifying a transaction can ask the cardholder for an “800” number for the issuing bank, plus the cardholder name, address and the CVV2 number on the reverse of the card next to the signature. Essentially, businesses that trade internationally need to “know their customer” and how to manage the risk in accepting credit card transactions from “unknowns”.
(ABC News)
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