Credit Cards Online Information

Take these steps to protect your profits.

As the technology barriers to e-commerce fall, more and more small businesses are looking to take their sales online, eager to tap into a pool of online consumers that IDS projects will reach 128 million by 2002. E-commerce application and hosting service providers make it relatively simple and inexpensive for Web-enabled businesses to turn their home pages into full-fledged online stores, opening up the e-commerce arena to even the smallest businesses. However, there's a hidden danger that many newly minted e-business owners fail to take into consideration: the problem of credit card fraud.

While conventional wisdom holds that merchant fraud is the main form of credit card abuse, the reality in the e-commerce world is that the merchants are far more frequently the ones defrauded, whether through credit card theft or so-called "friendly fraud," in which customers dispute the charges but nevertheless keep the merchandise. A survey conducted by the Gartner Group this year of major online retailers has shown an average of 2.64 percent of Internet transactions are charged back, compared with 1.24 percent among bricks-and-mortar retailers. Gartner research also shows that credit card fraud is at least 10 times as prevalent online as in the physical world, accounting for 1 percent of all e-commerce transactions.

The issue may not even occur to many business owners as a potential problem. After all, in the world of the physical store-front, credit card companies typically shoulder the risk in the case of fraudulent or disputed charges. So long as the merchant can provide a receipt with a customer signature, that merchant cannot be held responsible for charges that have been approved by the card issuer.

# posted by Medical Information : 3:50 AM