Protect Your Business From Card-Not-Present Fraud

Brick-and-mortar businesses rely primarily on payment via physical credit and debit card, equipped with chip security. Those with an online presence rely on forms of payment where the customer essentially types their sensitive information into a browser. However, in today’s digital world, if a customer doesn’t have a form of payment in hand, they can still make purchases. As a result, businesses and customers face the risk of card-not-present fraud.

A card-not-present (CNP) transaction occurs when neither the cardholder nor the credit card is physically present at the time of the transaction. It’s most common for orders that happen remotely — over the phone, internet, or mail. Online fraud, including card-not-present fraud, is fundamentally different to fraud that occurs at brick-and-mortar businesses as it’s harder to be certain that the person you’re selling to is who they say they are. Some fraudsters adopt more sophisticated methods than just trying to make purchases on a stolen card.

Examples of card-not-present transactions

There are a number of CNP transactions that you probably come across everyday. They include:

  • Online purchases, when a customer buys goods on the internet or through an e-commerce transaction.
  • Phone orders, when a customer provides the credit card information over the phone to your business.
  • Recurring payments that are set up to bill automatically.
  • Invoices that are paid online.
  • Card on File Payments, when a customer has provided a continuous authorization on a credit card

Businesses That Benefit, But Are Also At Risk of Card-Not-Present Fraud

Paying over the phone creates astounding flexibility, which is fantastic for any business. Opting for this form of transaction is popular for delivery-based and 100% remote businesses, big or small. Some examples include taxi services, call centres, and food delivery services. These businesses have no physical retail location and may prefer not to conduct internet transactions or opt to offer both traditional online and phone payment options to accommodate clients. In these situations, traditional cash register setups with physical debit or credit cards are off the table, while paying by phone is just as convenient, if not more so, than online purchasing. Businesses do not have to lack a physical location to benefit from incorporating phone pay into their operations. More often than not, over-the-phone payment provides an excellent way to expand operations to fit a greater number of situations and customer preferences, whether because of temporary inaccessibility of the internet or a wariness on the customer’s part to pay online. This creates a greater opportunity for creating positive customer relationships.

Whether an independent, small-scale business or a larger corporation, offering phone-based options helps set up financial protections. One way this is achieved is by requiring immediate deposits from clients. This ensures a transaction’s integrity and makes operations run smoother. Especially for the owners of small shops, phone payments help to avoid carrying or storing significant amounts of cash at any given time. In the event of a malfunction or breakdown of the physical payment terminals, businesses that also possess the option to receive funds over the phone have a simple and convenient backup method of carrying on with their customers. Most important of all, though, the PCI compliance of reputable phone pay services like Telepay ensures that fraudulent transactions are quickly discovered, helping to prevent a business from dealing with any extra incurred costs or chargebacks. This is essential for card-not-present situations, where checking identification is complicated.

Interpersonal Contact and Reassurance

Besides the promise of simplicity and security when businesses use optimized and PCI compliant services, like those of Ivrnet, making purchases over the phone is simply more personal. Marketing and success in the commercial realm are based on customer satisfaction. Creating positive experiences on an individual level plays a huge role, considering how many of the world’s operations have become impersonal with digital transformation. Of all card-not-present payment options, carrying out transactions by phone has the most potential to engage customers more genuinely and intimately. There are forms of paying over the telephone that are completely automated, which is also offered by Ivrnet’s Telepay, for those it is best suited for. However, the personal familiarity of over-the-phone payments creates an opportunity for deeper interpersonal connections. Customers that have interacted with the real people behind a business are more likely to form trust with that establishment. In turn, this allows for securing returning customers and building a positive brand reputation. Not to mention that in-person sales representatives can upsell better this way. 

Many people feel more comfortable speaking directly with an individual before paying, such as in situations with call centre representatives. Verbal, person-to-person communication is not a feature of common online transactions, which may make many feel wary about their data safety. 

Instead of sharing their sensitive information over the web, customers can feel personally assured their payment is going to a legitimate enterprise and is being processed through a reputable system, such as Ivrnet’s Telepay. Even for businesses that do employ regular online transaction methods, offering an additional option like Telepay is a great way to leverage PCI-compliance, empower employees who lack card-not-present training, and integrate sales generating activities from over-the-phone interactions. Similarly, providing a safe method for card-not-present payments can significantly reduce the risk of government fines and transactional liability. Such secure practices can, therefore, positively contribute to the reputation of a company as a whole.

Reach out to Ivrnet today for more information on Telepay and to request a free demo! Let Ivrnet free your organization from the burden of taking on PCI compliance solo by outsourcing to our experts. We take care of the technical side of ensuring customer data protection, so your organization doesn’t have to.

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