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Education

1. Implement strong security measures such as AI-pow- Using machine learning and AI
ered fraud filters and authentication protocols like
3-D Secure to enhance the security of online credit Several innovative technologies are being used to prevent
card transactions. These measures help identify and credit card fraud. Recent innovations include universal
prevent suspicious activities. credit cards, credit cards with push buttons, and finger/
hand detection methods to protect from fraud. Major
2. Verify customer identities through checking IDs or credit card networks use fraud protection enhanced by
displaying confirmation screens for delivery, curb- machine learning that analyzes numerous variables for
side pickup, and BOPIS orders to ensure that orders risk in real time. Additionally, several proactive security
are handed to the right individuals, reducing the risk measures can be taken to increase digital security, such as
of first-party misuse. card security features like AVS, 3DS, and CVV that verify
the cardholder's identity.
3. Educate and train employees to recognize signs of
potential fraud, including ATO attempts, suspicious Machine learning enables real-time insights and identifies
transactions and fraudulent chargebacks, so they can fraudulent transactions in vast volumes of data (see https://
take appropriate preventive action. tinyurl.com/4x45zbvu). Artificial neural networks trained
using a simulated annealing algorithm effectively identify
4. Retain transaction records, including receipts and fraudulent credit card transactions.
delivery confirmations, as evidence to counter false
claims made by cardholders during fraudulent A machine learning-based credit card fraud detection en-
chargebacks. gine has been proposed using the genetic algorithm for

5. Stay updated on industry trends, fraud prevention feature selection. Machine learning models are among the
techniques, security advancements and card network most prominent techniques in detecting illicit transac-
guidelines to proactively address evolving fraud tac- tions. Autonomous credit card fraud detection using ma-
tics, maintain compliance and minimize vulnerabili- chine learning approaches has also been developed.
ties. Recapping the basics

Credit card companies are also taking measures to pro- CP and CNP fraud come with different liabilities for mer-
tect merchants from credit card fraud. For example, Visa chants and issuing banks. To combat this problem effec-
uses Visa Advanced Authorization to detect and prevent tively, retailers must implement strong security measures,
fraudulent purchases and offers a variety of materials to verify customer identities, educate their employees, retain
support fraud prevention, security and risk management transaction records, and stay updated on industry trends.
efforts; Mastercard has a fraud detection system to pro- By using advanced tools like AI-powered fraud filters and
tect merchants from fraudulent transactions; and Ameri- authentication protocols, retailers can enhance the secu-
can Express uses fraud protection enhanced by machine rity of online transactions and identify suspicious activi-
learning to analyze numerous real-time risk variables. ties. Implementing verification processes for delivery and
pickup orders helps ensure that products reach the right
Merchants can reduce unauthorized credit card transac- customers and minimizes the risk of first-party misuse.
tions by using EMV-enabled card readers. Merchants can
also take steps to limit the risks of credit card fraud, such Training employees to recognize signs of fraud and re-
as training staff about fraud, halting suspicious purchas- taining transaction records as evidence are crucial for
es, and using PCI-compliant payment systems. defending against fraudulent chargebacks. And staying
informed about industry trends and adhering to card net-
Choosing the right POS work guidelines are essential for compliance and mini-
Selecting the right POS system is critical in the battle mizing vulnerabilities.
against store credit card fraud. It's like having a reliable
security guard at the entrance of your business, ensuring Credit card issuers also play a role in fraud prevention
that only legitimate transactions get through. A top-notch by employing machine learning and real-time risk analy-
POS system comes equipped with advanced security fea- sis. And retailers should already be using EMV-enabled
tures that shield customer data during payment process- card readers and PCI-compliant POS systems. Combining
ing, like encryption and tokenization. these measures with continuous monitoring and adapta-
tion will help retailers stay ahead of evolving fraud and
The POS system should proudly display industry certifi- safeguard their businesses. As merchant service provid-
cations, such as PCI DSS compliance, which means it has ers, you can help retailers take proactive steps to reduce
undergone rigorous testing to meet the highest security the financial losses and reputational damage associated
standards. By making an intelligent choice regarding a with credit card fraud while ensuring the safety and trust
POS system, a merchant is fortifying a store's defenses, of their customers.
safeguarding precious customer information, and keep- Elie Y. Katz is founder, president and CEO at National Retail Solutions
ing the business running smoothly and securely. (NRS), https://nrsplus.com. Contact him by phone at 201-715-5179 or
by email at ekatz@nrsplus.com.

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