Thursday, September 15, 2005

Phishing Raises Risk of Online Transactions

The issue of PayPal security is addressed in a recent letter in the Ask Inc. section of Inc. For small businesses, PayPal can be a useful device for paying employees. But just like many software programs it can be manipulated by professional scammers. Although physical goods are covered by a seller protection policy, it does not yet cover digital goods. Here are some ways you can protect yourself by improving security.

  • Software can be easily purchased to plug PayPal security holes. Companies such as Cybersource offer antifraud services.
  • Flag orders for shipping addresses more than 50 miles away from the billing address for computer IP addresses.
  • Monitor customer behavior; check for any unusual transactions that veer away from normal practice such as someone whose orders average $50 per transaction suddenly jumps to $1000.
  • Call for verbal authorization.
  • Look at how much you spend on refunds and set aside enough money to cover them.

By protecting your online transactions, you can improve your customers’ confidence as you strive to build a stronger business.

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