Credit and debit card fraud is set to hit online retailers this Christmas, with estimates suggesting it will cost the industry over £105 million over the festive season alone.
The research, from online payment system Moneybookers, illustrates the cost of "charge-backs", whereby the retailer is held liable for the cost of fraudulent transactions.
The company has published guidance for online retailers, detailing measures they can take to mitigate the risk posed by fraudulent transactions. This advice includes ensuring that all possible security techniques are being employed, including CV2 (the last three digits on the signature strip), address verification, and 3D Secure. Furthermore, retailers should subscribe to industry blacklists, either from their payment provider or a private third party. These lists give details of stolen or fraudulent cards.
There is anger across the retail sector over the fact that retailers are being forced to foot the bill for fraudulent transactions. However, some payment systems are beginning to offer services that eliminate charge-backs, with the provider assuming liability for these costs.
