Card payment fraud can involve stolen card details, unauthorized account access, phishing scams, or fraudulent refund requests. Understanding common fraud methods and using appropriate security measures can help protect your online store. Learn about different types of card fraud, how 3D Secure helps protect payments, and practical steps you can take to reduce the risk of fraudulent transactions and chargebacks.
How to reduce the risk of card payment fraud
Regular monitoring, secure payment methods, and clear customer processes can help you identify potential risks early.
- Monitor incoming orders and investigate unusual payment activity, particularly repeated unsuccessful payment attempts or sudden changes in order volumes.
- Review suspicious orders before shipping goods or providing access to digital products.
- Check whether your e-commerce platform offers additional fraud prevention features, such as detecting repeated payment attempts or unusual purchasing patterns.
- Keep your online store's software, plugins, and customer account security features up to date.
- Train employees to recognize phishing attempts and verify unexpected requests for sensitive information through official channels.
- Use the Merchant Panel to process refunds and verify unusual refund requests before taking action.
- Keep accurate order confirmations, customer communications, and delivery records in case a payment is disputed.
How 3D Secure helps protect card payments
3D Secure (3DS) adds an authentication layer to online card payments to help verify that the person making the payment is authorized to use the card.
Authentication helps reduce the risk of unauthorized payments and, depending on the transaction and applicable card scheme rules, may affect liability for certain fraud-related disputes.
However, 3D Secure doesn't eliminate all fraud or chargeback risks. Payments can still be disputed for other reasons, including delivery problems or disagreements about a purchase.
For more information about card payment security and chargebacks, see Cards: Visa, Mastercard, and American Express.
Common types of card payment fraud
Card fraud can take several forms. Expand the sections below to learn how different types of fraud work and what to watch for.
Stolen card details
Fraudsters use stolen card information to make purchases without the cardholder's permission. Because the physical card isn't presented during an online purchase, this is also known as card-not-present fraud.
The legitimate cardholder may later dispute the unauthorized payment, potentially resulting in a chargeback.
Phishing and social engineering
Fraudsters impersonate trusted organizations, such as banks, payment service providers, or delivery companies, to trick people into sharing sensitive information or taking unauthorized actions.
These scams may involve emails, text messages, phone calls, or fake websites. Stolen card details or login credentials can then be used for fraudulent payments or unauthorized account access.
Be cautious of unexpected requests for sensitive information. Verify suspicious messages through official channels, and never share passwords, authentication codes, or card security codes.
Card testing
Card testing occurs when fraudsters make repeated payment attempts to find out whether stolen card details are valid. These attempts may involve small amounts or multiple different cards.
A sudden increase in unsuccessful payments or repeated payment attempts may indicate card testing.
Account takeover
Account takeover occurs when someone gains unauthorized access to a customer's online store account, for example through stolen login credentials or phishing.
Fraudsters may change account details, use saved payment information, or place orders without the customer's knowledge.
First-party misuse (friendly fraud)
First-party misuse occurs when a customer authorizes a payment but later disputes it dishonestly, for example by falsely claiming that the purchase was unauthorized or the order was never delivered.
Not all disputes are fraudulent. Customers may also dispute payments because of genuine delivery problems or misunderstandings.
Refund fraud
Refund fraud involves attempts to obtain refunds that the person requesting them isn't entitled to.
For example, someone may impersonate a customer or request that a refund be sent to a different payment method or account.
Verify suspicious refund requests and process card refunds through the Merchant Panel.
Keep records to help resolve payment disputes
Even when you take precautions, customers may still dispute card payments. Keeping accurate records can help you respond to disputes and provide supporting evidence when needed.
- Keep order confirmations, receipts, and relevant customer communications.
- For physical products, retain shipment tracking information and proof of delivery.
- For digital products or services, keep records showing when and how the purchase was delivered or accessed.
- Make sure your delivery, cancellation, and refund terms are clearly available to customers before payment.
If a payment is disputed, Paytrail will notify you and provide instructions on the required documentation. For more information about the process, see the Disputes & chargebacks tab in Cards: Visa, Mastercard, and American Express.
What if you suspect a fraudulent payment?
If an order appears suspicious, investigate it before fulfilling the order. For warning signs and instructions on what to check, see How to identify suspicious card payments.
If you're unsure about a payment, you can contact Paytrail's customer service for additional guidance. While we can help you review the available payment information, we cannot confirm whether a payment is fraudulent or guarantee that it won't be disputed later.