Credit card usage in the Philippines has seen significant and steady growth over the past few years. According to the Credit Card Association of the Philippines (CCAP), the number of credit cardholders in the country has been steadily increasing, with more consumers relying on plastic to extend their purchasing power. In addition, the growth of Philippine e-commerce has encouraged Philippine cardholders to increase their credit card usage.
Unfortunately, as with other markets that have transitioned to card payments, the rise in Philippine credit card usage has also increased incidences of identity theft and fraud in the country’s business
sector. Amidst all of these issues with securing cardholders’ identities, small businesses are feeling a
rising need to mitigate these growing risks.
If you’re part of the growing number of Philippine online entrepreneurs, keeping your business safe
against fraudsters should be one of your top priorities. This is because any successful fraud attempt will
result in serious financial losses, regardless of the outcome. Even in cases where fraud is proven and the fraudsters are made liable, your business can still suffer from delayed compensation and damage to its reputation.
With all of that in mind, the best way to mitigate the damage of credit card fraud is to prevent it from
happening in the first place. Let’s look at some of the concrete steps you can take to keep your small
business and its customers safe from credit card crimes:
1) Discourage Customers from Using Magnetic Swipe Cards
While magnetic stripe technology was secure in its heyday, malicious parties have long found ways to
access the information on these cards. Today, the most secure credit card types employ dipped EMV
chips or “tap-to-pay” near-field communication (NFC) technology. These technologies offer updated
security features that make it significantly harder for fraudsters to clone cards or use stolen card
information.
Most new credit cards these days come with either or both technologies, though a dwindling few may
still maintain the magnetic stripe. In any case, encourage customers to dip their chip cards or use tap-to-pay options instead of swiping magnetic stripe cards to keep their information safe and to reduce your business’s potential liabilities.
2) Use Card Verification Numbers
If you run an online store, you should require customers to enter the card verification code/card
verification value (CVC/CVV) during online transactions. This short number code helps verify that the
customer has the physical card in their possession, preventing someone who merely has the card
number from making a purchase.
You may have noticed that a few online stores may opt to not require these numbers because they want
to reduce the number of steps needed to facilitate a conversion. However, the shops that don’t require
CVC/CVV numbers are typically very large, established brands that have other ways of verifying customers’ identities. To keep your small business on the safe side, just set your payment system to require CVC/CVV entry for each purchase.
3) Train Your Staff
Well-trained staff can be a crucial line of defense against fraud. However, in the Philippines, many
cashiers are still unfamiliar with how credit cards work, which can result in customers’ card details
becoming exposed to unauthorized parties. To make things more challenging, many Filipinos are not yet
fully aware of the signs of a potential fraudulent transaction.
Whether you run an online business or a physical shop, you must educate your employees about credit
card safety as well as the telltale signs of fraud. Ensure that they know how to use the security features
of your point-of-sale (POS) system, as well as the correct procedures for flagging suspicious transactions. You’ll also want to invest in periodic retraining so that your staff is aware of new modi operandi being employed by fraudsters.
4) Monitor Transactions for Suspicious Activity
Regularly review past transactions for signs of suspicious activity. Typical fraud patterns include activities like multiple small purchases followed by a large one, wildly inconsistent billing and shipping addresses, or repeated purchase attempts with different cards.
Manually looking at purchase patterns may suffice if you have a small customer base, but it will
eventually become unsustainable when your business scales up. Eventually, you’ll want to implement
fraud detection software to automate this process.
5) Randomly Inspect Your POS System
Credit card fraud is occasionally perpetrated by business insiders, making it necessary to check your POS system for potential tampering. Apart from inspecting the physical devices, you’ll need to check if
unauthorized apps are installed in your computers or if there are thumb drives or strange hardware
peripherals plugged into your devices. These checks need to be random so that employees don’t have
advance notice of inspections.
6) Keep Your Software Updated
Given enough time, malicious parties will always find ways to breach any software security barrier. For that reason, you’ll want to update your POS systems, payment gateways, and other software whenever
a patch becomes available to better shield it against security vulnerabilities.
Start Your Small Business Journey with Fraud-Free Card Payments
Though card fraud is a growing threat to Philippine small businesses, learning proven security practices that have worked elsewhere will keep your business and its customers safe from credit card thieves. You should be able to prove to customers with Maya’s Landers Cashback Everywhere Credit Card and other cardholders that your business is one that they can entrust their finances and private info to. With these security tips, you can prevent the bulk of fraud attempts and keep your stakeholders safe, preserving the brand integrity and momentum of your emerging company.
