Insufficient security checks and the complexity of taking online payments are leaving small firms exposed to payment processing fraud, says the Forum of Private Business (FPB).
Many business owners have little or no experience of the contractual processes that can be involved in accepting credit card payments online, according to the FPB.
The problem is exacerbated by the fact that business owners have to bear the cost of fraud when supposedly secure payment systems are breached.
The FPB reports an increase in the past month of calls to its member helpline about payment processing fraud.
"Minimising credit card fraud takes time but, above all, it is important to acquire an e-commerce payment gateway that is secure, using supplementary security modules provided by the major credit card companies," said Richard Bradley, merchant services advisor at FPB.
Requiring an additional password to be entered along with credit card details can be an effective way of minimising risk, he said.
Many business owners do not fully understand the processes involved in taking secure online card payments and do not realise that they can be left to cover the cost of fraud, said Bradley.
"In order to combat credit card fraud, e-commerce merchants must first understand why and how fraudulent transactions take place," he said.
Typically purchases are made using stolen credit card information, but when the cardholder rejects the transaction a chargeback is issued from the bank and the e-commerce merchant has to refund all the expenses and pay a chargeback fee.