Small firms warned over online fraud

SMALL firms are being warned over the risks of payment processing fraud when taking online payments.

The Knutsford-based pressure group the Forum of Private Business says poor security checks and a complex system is leaving small firms exposed.

With increasing numbers of people shopping online accepting card payments online is an increasingly important source of revenue for small firms but the FPB says many business owners have little or no experience of the contractual processes that can be involved.

It warns that traders who do take online card payments are left paying the price of fraud if supposedly-secure payment systems are breached.

The past month has seen a steady increase in calls about payment processing fraud to the Forum’s member helpline.

The FPB adviser on merchant services, Richard Bradley says traders should act to protect themselves by scrutinise orders using statistical information provided by online payment providers.

He says: “Minimising credit card fraud takes time but, above all, it is important to acquire an e-commerce payment gateway that is secure, using supplementary security modules provided by the major credit card companies.” 

“Basically, these two features request an additional password to be entered along with the credit card details of the cardholder. Fraudsters will usually have the name, address and credit card number only so using payment gateways that support these can be an effective way of minimising risk.”

Mr Bradley said that many business owners do not fully understand the processes involved in taking secure online card payments or realise that they can be left to cover the cost of fraud.

He adds: “Card fraud is a bit of a minefield, particularly with card not present transactions. In order to combat it, e-commerce merchants must first understand why and how fraudulent transactions take place.”