Credit Card Fraud Poses Growing Threats for Small Businesses in 2023

As an advisor who works with numerous small business owners, I often counsel my clients on strategies to prevent credit card fraud which can have devastating impacts. Recent statistics show surging rates of fraud that should alarm any retailer or ecommerce merchant.

In this article, we‘ll analyze the latest credit card fraud trends and provide best practices to help local business owners minimize risks.

Fraud Rates Continue Rising Each Year

  • In 2022, 29,988 fraud cases stemmed from stolen credit cards, up from 23,654 in 2021^1
  • Global credit/debit card fraud losses reached $34 billion in 2022 and are projected to hit $49 billion by 2030^2

These fast-growing fraud figures result from several key factors:

  • Booming ecommerce sales – Online transactions are inherently more vulnerable to hackers
  • Retail data breaches – Over 160 million records exposed since 2019 in the US alone^3
  • Sophisticated organized crime rings – Groups exploiting vulnerabilities across banks, merchants, and consumers

For small businesses already dealing with tight margins, these staggering fraud costs can push companies into bankruptcy.

Fraud PreventionShould Be Top Priority

While no fraud solution is foolproof, merchants can and should take proactive precautions. Here are best practices I suggest my small business clients implement:

Upgrade Payment Terminals

  • EMV chip compliant terminals reduce fraud by 76% on average^4
  • Ensure terminals support latest security protocols like point-to-point encryption

Adopt Customer Screening Tools

Leverage fraud detection platforms that screen orders for high-risk indicators before fulfilling, allowing you to:

  • Review user device profiles
  • Cross-reference billing/shipping info
  • Check high-risk shipping addresses
  • Submit screening requests through a simple API integration

Monitor Transaction Activity Daily

  • Set up account alerts to be notified of suspicious activity
  • Designate staff to review reports and flag anomalies
  • Contact issuers promptly about disputed/fraudulent purchases

The bottom line – credit card fraud is skyrocketing globally, and small companies must take actions to avoid preventable losses. Feel free to reach out if you need any help assessing risks for your unique business. The key is making fraud prevention a top priority now before you become the next victim.

Sources

  1. 2022 Federal Trade Commission Consumer Sentinel Report
  2. Juniper Research Global Fraud Survey 2022
  3. Identity Theft Resource Center Breach Reports
  4. Visa EMV Merchant Statistics 2022