How to Reduce the Risk of Fraud When Using Credit Cards Overseas
Traveling overseas naturally requires spending money overseas. This is a fundamental part of both leisure travel and business travel. Luckily, it’s now easier than ever to use credit cards and other payment systems to make transactions while visiting foreign countries. However easy, transactions that are carried out overseas come with a level risk. Criminals are able to exploit payment systems and commit fraud on people who are visiting from foreign countries. Close to $16 billion is lost annually to international credit card fraud.
Using Credits Cards Overseas
Payment fraud is a big issue for people travelling overseas because merchants and local criminals can perceive foreign travelers as potential targets to be singled out. During travel, this means that the risk of payment fraud is present during normal activities like buying a meal, purchasing a train ticket or buying souvenirs where a credit card is required. Travelers who plan to use a credit card while visiting a foreign country must be aware of the risks that are involved. Companies and enterprises that send employees to foreign countries for business should also have plans in place for reducing the likelihood of business cards being used for fraudulent activity.
How to Prevent Scams for Overseas Travelers
Credit card companies need to be prepared to detect and stop fraud when travelers are targeted. One of the most important ways to prevent credit card fraud is to keep tabs on transactions in real time. Purchases like restaurant meals, access to tourist attractions and clothing are not abnormal when people are vacationing. However, extravagant purchases or repeated purchases made in a foreign country may point to fraud. Algorithms that are capable of spotting unusual retail activity can be used to cut off access to a card and alert a cardholder to potential fraud almost instantly. To do this, enterprises need to utilize a sophisticated platform that utilizes high volumes of data to detect patterns and activate triggers when abnormalities are detected.
The Specific Risks
Card skimming is the biggest threat travelers face when visiting foreign countries. This can occur in the blink of an eye. Merchants can use a device to ‘skim’ a credit card and copy the details associated with it. A clone of the card can then be made and used for fraudulent purchases. How can travelers avoid this scam? It is important to avoid letting a merchant take a credit card out of sight or bring it to a second location to complete a payment. Some scammers will target guests at hotels by notifying them that the credit card used to book a room didn’t go through. By asking a guest to supply their card information over the phone, scammers can obtain a victim’s credit card information without needing to come in contact with the physical card. In order to avoid this, guests should walk down to the front desk to verify that additional payment information is needed.
It is important for travelers to check their account activity online when they’re far from home. Credit card companies also need to ensure that payment fraud is identified in real time. Together, travelers and credit card companies can greatly reduce the risk of fraud when travelling abroad.