How do online stores avoid EFT fraud?

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AlexGouws

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Hey guys.

I've read recently that people order items from online stores and are then asked to do an EFT into the store's bank account and to then send a proof of payment. My question is, how can the online store be sure that the proof of payment document (usually pdf format if I'm not wrong) wasn't forged in anyway since it's so easy to do things like that these days? Especially when the buyer has sent the EFT from a different bank to the store's bank. And the store can't always wait the 3 or so days it takes to clear the payment to send the goods to the buyer. How do they make sure the proof of payment isn't fake? I know FNB offers a Verify Payments system that allows you to check the payment info in the proof of payment pdf if the payment was made from an FNB account, but do other banks also have such features?
 
AlexGouws said:
Hey guys.

I've read recently that people order items from online stores and are then asked to do an EFT into the store's bank account and to then send a proof of payment. My question is, how can the online store be sure that the proof of payment document (usually pdf format if I'm not wrong) wasn't forged in anyway since it's so easy to do things like that these days? Especially when the buyer has sent the EFT from a different bank to the store's bank. And the store can't always wait the 3 or so days it takes to clear the payment to send the goods to the buyer. How do they make sure the proof of payment isn't fake? I know FNB offers a Verify Payments system that allows you to check the payment info in the proof of payment pdf if the payment was made from an FNB account, but do other banks also have such features?
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All the retailers I have used wait for the money to clear in their accounts. That is why some have accounts at most of the banks.
 
We insist on proof of payment being sent directly from internet banking so that the confirmstion email or sms comes from the bank. Otherwise we will wait for payment to clear before we ship the order. It is too easy to photoshop a screenshot or pdf file.
 
General rule is to wait on the invoice amount, referenced, to clear in the bank account. Unreferenced accounts are a manual procedure, proof of payment most certainly supports this procedure.
 
Just bought RAM on Wootware - they have accounts at all the banks. Using the same bank as your own will speed up the clearing time i.e. immediate clearance.
 
Radioboy said:
All the retailers I have used wait for the money to clear in their accounts.
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But would this not put you off of buying from the site if you had a different bank? Seeing as it would take 3 days before your item is even dispatched?

Sensorei said:
We insist on proof of payment being sent directly from internet banking so that the confirmstion email or sms comes from the bank.
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Even so, it is very easy to mask an email account to make it look like it came from something like [email protected]. I have seen this many times and I can even do it myself, that's how easy it is. As for SMS confirmation, just use some offshore sms service that will make a long number as the sender so it looks legit to the person it is being sent to.

Fulcrum29 said:
Unreferenced accounts are a manual procedure, proof of payment most certainly supports this procedure.
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Can you elaborate more? What do you mean by unreferenced accounts?

AirWolf said:
Just bought RAM on Wootware - they have accounts at all the banks. Using the same bank as your own will speed up the clearing time i.e. immediate clearance.
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This is the option that makes the most sense, but what would bank charges be to have 4 or more bank accounts for your business?
 
I think the best way around it is to use a service like PayFast, that way the merchant gets the payment straight away.
 
AlexGouws said:
Can you elaborate more? What do you mean by unreferenced accounts?
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1. Insert order number (or customer number) to REFERENCE payment
2. TRANSFERS may take up 2 business days (even when it’s the same bank)
3. PROOF OF PAYMENT (pop) – allow the seller to secure and allocate the goods, but will only ship when the FULL AMOUNT is cleared into the designated bank account
4. CLEARANCE PERIODS – this is the standard process where payments can take up 10 (or more) business days to clear

Without 1) the other steps can be prolonged since its missing an identity, even when clearance are done the payment needs to be attached to an order. Do note, it depends on the policy to secure and allocate goods prior clearance.
 
Mr Monty said:
I think the best way around it is to use a service like PayFast, that way the merchant gets the payment straight away.
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Not really "right away" since there is a 48 hours withdrawal delay. So even if you get the money instantly into your account, you still have to wait 2 days to have it in your bank account.
 
AlexGouws said:
Not really "right away" since there is a 48 hours withdrawal delay. So even if you get the money instantly into your account, you still have to wait 2 days to have it in your bank account.
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Sure, I was referring to my experience using PayFast and how the order is placed and then payment is made right after placing the order. From what I can tell this speeds up the delivery process as the merchant can feel comfortable that the money has been paid and there is no need to send proof of payments etc.

In my opinion, using PayFast reduces the possibility of EFT fraud.
 
we offer two options


1) Instant EFT - this is via a payment gateway. (paygate.co.za) basically during the checkout process, you log into your bank account, do the payment and return back to the checkout process and complete the transaction. It only works with the big 4 (FNB, Absa, Standard, Nedbank) - we're using for about 2+ years with zero fraud. Its all in real time so really difficult to commit fraud

2) traditional EFT - send customer order number, amount and bank details. Helps to have bank accounts with all major banks. But sometimes delays happen. and MUST see funds in account before releasing.
 
I don't know about other banks, but Nedbank adds a reference number on their proof of payments. Anyone can go to Nedbank's website and confirm the payment with the reference number.
 
AlexGouws said:
But would this not put you off of buying from the site if you had a different bank? Seeing as it would take 3 days before your item is even dispatched?
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It's your choice if you want to shop there or somewhere else but you'll likely face the same issue at every retailer. The only bank where this is a real problem is Capitec as a lot of them have accounts at multiple banks. So they risk fraud or losing a customer. Latter is more acceptable and less likely. Fraud can still happen though with banks like Nedbank that will reverse an EFT after it's paid into your account.

AlexGouws said:
This is the option that makes the most sense, but what would bank charges be to have 4 or more bank accounts for your business?
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Receiving EFT payments cost nothing or next to nothing and the extra options make up for the few bucks it costs to have the accounts.
 
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Mr Monty said:
Sure, I was referring to my experience using PayFast and how the order is placed and then payment is made right after placing the order. From what I can tell this speeds up the delivery process as the merchant can feel comfortable that the money has been paid and there is no need to send proof of payments etc.

In my opinion, using PayFast reduces the possibility of EFT fraud.
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This is also true, however I think there might be merchants out there who would like instant access to their funds. Places that have to buy their stock from suppliers before they can ship it off. Like online computer stores. If I were a merchant using Payfast I would absolutely HATE that 48 hour waiting period. Yes it is to protect your account, but still.

naeem said:
we offer two options


1) Instant EFT - this is via a payment gateway. (paygate.co.za) basically during the checkout process, you log into your bank account, do the payment and return back to the checkout process and complete the transaction. It only works with the big 4 (FNB, Absa, Standard, Nedbank) - we're using for about 2+ years with zero fraud. Its all in real time so really difficult to commit fraud

2) traditional EFT - send customer order number, amount and bank details. Helps to have bank accounts with all major banks. But sometimes delays happen. and MUST see funds in account before releasing.
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Isn't Paygate and Payfast basically the same thing? Both offer very similar services. Good thing though is, as you said, fraud is hard to commit, but do they charge your account if they receive a chargeback from a bank?

broloks said:
I don't know about other banks, but Nedbank adds a reference number on their proof of payments. Anyone can go to Nedbank's website and confirm the payment with the reference number.
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FNB also offers this, but I am not sure of other banks. Would be nice if ALL banks could do this. What exactly is the point in having to wait several days for funds to clear when being sent to another bank anyway? Do these transactions have to be manually approved or what?
 
AlexGouws said:
FNB also offers this, but I am not sure of other banks. Would be nice if ALL banks could do this. What exactly is the point in having to wait several days for funds to clear when being sent to another bank anyway? Do these transactions have to be manually approved or what?
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People can still cancel cheques and EFT payments. We need to see the clearance.
 
By the way, thanks a lot for your input guys! It's very interesting to learn these things.
 
broloks said:
How do you cancel an EFT payment?
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Go to/or call the bank, FNB has changed the process in similarity to a reversal request, you need to complete some vigorous documentation (stating valid reasons etc.). I don’t know about the other banks.
 
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