One of the great challenges for a business can come from verifying an international customer. Some businesses sidestep the problem by not dealing internationally at all, but this is an approach that just leaves money on the table. You want to break into those international markets and reap the rewards. This creates a problem though – just how do you deal with customers ordering your goods from abroad?
There are a few tricks to this process, and few of them are convenient or full proof. The wide variety of banking regulations around the world means verifying an international credit or debit card transaction can be a trial in and of itself. Thankfully, there is hope to be found – in the cloud.
Standard Fraud Prevention Applies
Remember that when dealing with international customers, your standard fraud prevention practices still apply. This means being on the lookout for unusual orders that do not fit with the norm for what people typically purchase from you. You’ll also want to look out for unusual activity in placing the order, the use of multiple credit or debit cards, and more.
Running the information of a customer through a cloud solution like Cognito can also help – though keep in mind that no one system is guaranteed to work for all orders across all nations. The one issue that may come up is address verification since not all countries use the same postal code system as the US.
Watch for Differences in Billing and Shipping Address
When a customer is asking for a product to be shipped to an address that is in a completely different country from the billing address that should be considered a major red flag. Legitimate transactions usually are sent to the same place the bill is going to, though there are exceptions. Somebody on an extended vacation may request an item sent to where they are staying rather than to their home for obvious reasons.
Not All Nations are Equal
It’s an unfortunate reality that fraudsters tend to operate in certain countries more often than others. What makes certain nations have a higher fraud rate than another is a topic for a different and more scholarly article, what matters is that if you are shipping to a country where fraud is common and the shipping address differs from the billing address then definitely scrutinize. FYI, Eastern Europe and Southeast Asia tend to have higher rates of credit card fraud as compared to others.
Reach Out to the Issuing Bank
If your instincts say that an order being placed is fraudulent do not hesitate to reach out to the issuing bank for that card. You can often figure out the issuing bank based on the credit card number just by going through a BIN database, but asking the person placing the order can also help to suss out a potential fraudulent purchase as fraudsters might hesitate or outright refuse. This could result in a frustrated customer abandoning the purchase entirely, but it is often worth it to avoid the risk of having to refund a fraudulent order.
Be Prepared for Some to Slip Through
At the end of the day, there is no perfect security system you can put into place to detect fraud while still being able to deal internationally. Finding a balance between security and profit is essential, and depending on the risk/reward ratio for accepting or rejecting certain orders you may want to abandon certain security practices or even blacklist certain countries altogether.
Where you tighten the net and where you relax on a few requirements is a decision that you have to make as a business owner and depends on the needs of your business. Some are going to slip through, but with a properly balanced security system in place those that slip through will be outweighed by legitimate clients and future profits.
