Restaurants Vs CNP Fraud Rise: Chargeback Insurance Providers

The latest advances in payments provide a myriad of options for ordering dinner. What about card-not-present fraud and chargebacks? How can you, as a restaurant owner, fight them? With the help of chargeback insurance providers? Just move forward to find the answers below.

CNP Fraud at Restaurants Is on the Rise

According to the director of research and development of a fraud-solutions provider, today’s biggest trend is the much greater demand than the available supply of card-not-present (CNP) data being uploaded to underground markets.

The number of restaurants offering delivery and “buy online, pick up in-store,” or BOPUS is growing rapidly. Lots of restaurants offer their own branded mobile apps for much more streamlined customer experience. On the other hand, the number of people ordering food/drinks by phone, over the internet, or via the apps is growing as well.

Quick-service restaurants (QSRs) are offering mobile order-ahead, which can serve as a double-edged sword in fact. According to a digital fraud-prevention solutions provider, 75% of food and beverages merchants witnessed a recent increase in mobile fraud attempts.

Usually, restaurants that lack EMV readers are the main target for fraudsters. 28% of recent survey respondents in the food-and-beverage industry reported a chargeback rate from 0.5% and 1% of all transactions. 1 in 10 survey participants reported a chargeback rate above 1%.

Need Chargeback Insurance Providers to Fight CNP Fraud?

According to Juniper Research, CNP fraud will increase by 14% per year through 2023, which is faster than the YoY increase of CNP transactions.

To solve the growing problem of payment-processing fraud, Visa introduced its Visa Claims Resolution initiative last year. Besides, MasterCard is working on launching its own chargeback- rule update, “MasterCard Dispute Resolution.” By the way, machine learning (ML) is now considered a valuable solution for identifying fraud.

Overall, to fight fraud, you should:

  • Choose a payment processor that accepts EMV payments
  • Be PCI compliant
  • Work with a processor that uses tokenization
  • Rely on point-to-point encryption
  • Use mobile payment for your POS
  • Review contracts with 3rd-party online-ordering services
  • Train your staff

To fight payment-processing fraud, it’s critical to turn to the right merchant-services provider in your field. For this, just work with a reputable payments expert in the UK that can help you with chargeback insurance providers and any merchant services you’re interested in.

A true payment-processor comparison specialist can help you find the payment provider your business really deserves. Be sure to work with a merchant-services comparison company that’s focused on terms, complaints, and integration, and provides the most honest snapshot of companies at the time of writing.

This way, you can be sure to get the most reliable fraud-prevention and chargeback-mitigation services to eliminate disputes caused by errors and criminal fraud.

To sum up, credit-card fraud has been around since the spike in the credit-cards use in the 1980s. The latest online- and mobile-ordering technology solutions open up doors for newer payment options, but they also increase fraud. So, work with the right payments specialist to best protect your business.

Author Bio

Payment industry expert Taylor Cole is a passionate merchant account expert who understands the complicated world of accepting credit and debit cards at your business. His understanding of the industry, including chargeback insurance providers, has helped thousands of business owners save money and time.