By 2026, card fraud losses are expected to reach $26 billion worldwide. In recent years, one of the most effective avenues of attack has been a practice called carding, which can wreak havoc on your business quickly and quietly. Carding involves using stolen credit card details to exploit payment systems, usually by purchasing gift cards or attempting small online transactions.

Though this may sound like petty cybercrime, the consequences to your business could be very serious. Here’s how carding impacts businesses and what you can do to prevent it.

What is Carding?

The first thing you need to understand about carding is that it’s not only about stealing your money. The main purpose of this form of cybercrime is to manipulate stolen credit card data to exploit gaps in your payment system. A carding attack often involves deploying bots to test large batches of stolen card numbers, helping fraudsters pinpoint which cards are valid.

Most carding attacks are directed at digital marketplaces and e-commerce platforms that don’t have strong fraud prevention tools. The automated nature of this attack makes it efficient, hard to detect, and, if left unaddressed, potentially devastating to many businesses.

How Carding Impacts Businesses

The two biggest effects of a carding attack are financial losses and reputational damage. When fraudulent transactions occur, your business will bear the cost of refunds and chargebacks, and the customers who experience fraud will lose trust in your business. Carding incidents can also shed light on your failure to comply with PCI DSS regulations, leading to fines.

Carding can also lead to broader identity theft. Many fraudsters use stolen credit card information to apply for loans, open new accounts, or commit other forms of fraud. This can cause major emotional distress and anxiety for your customers.

How to Mitigate a Carding Attack

If you suspect that your business is facing a carding attack, your first step should be to analyze your website traffic. If you have a built-in web application firewall, it should be fairly simple to identify certain patterns that show where the attack is coming from and which IP ranges are involved. Your hosting provider can also help you identify fraudulent activity quickly.

To mitigate an ongoing carding attack, put stricter firewall rules in place. If you’re using Cloudflare, you’ll also have access to its “under attack” mode that will present your customers with a JavaScript challenge. Using this mode will harm the overall user experience, but it will also allow you to stop a carding attack quickly.

Once you’ve identified the IP ranges where the attack is coming from, you can block the malicious bots manually as well. As useful as fraud detection systems are, it’s best to combine them with some human input for maximum protection.