{"id":14699,"date":"2024-03-26T10:25:06","date_gmt":"2024-03-26T06:25:06","guid":{"rendered":"https:\/\/www.cs-cart.com\/blog\/?p=14699"},"modified":"2025-07-04T14:30:14","modified_gmt":"2025-07-04T10:30:14","slug":"understanding-carding-a-comprehensive-guide-for-online-store-owners","status":"publish","type":"post","link":"https:\/\/www.cs-cart.com\/blog\/understanding-carding-a-comprehensive-guide-for-online-store-owners\/","title":{"rendered":"Understanding Carding: A Comprehensive Guide for Online Store Owners"},"content":{"rendered":"\n

Carding is a type of credit card fraud that happens when a carder (or credit card thief) uses a stolen card to purchase branded gift cards, buy high-value goods, or charge a prepaid card. It is also called credit card stuffing. Unlike traditional credit card theft, carding doesn\u2019t always require stealing the physical card\u2014just the digital details. In many cases, attackers only need stolen card information obtained through data breaches or sold on the dark web.<\/p>\n\n\n\n

Sadly, the US is a major target for carding since it doesn\u2019t employ chip and PIN technology similar to what other countries use to safeguard debit and credit cardholders. In fact, between 2020 and 2021, card fraud increased by over 10%<\/a> worldwide, with US merchants and card owners alone losing $12 billion. It is expected to cause losses of over $362 billion to global merchants between 2023 and 2028.<\/p>\n\n\n\n

In this article, you\u2019ll learn about how carding fraud attacks work, the top carding attack techniques used today, and the measures to take to combat it.<\/p>\n\n\n\n

Let\u2019s get started.<\/p>\n\n\n\n

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<\/span>How a carding attack works<\/span><\/h2>\n\n\n\n

To understand how carding works, let\u2019s look at how attackers execute a typical carding operation. A carding attack is a major e-commerce security threat usually executed online through a merchant\u2019s payment processor<\/a>. A cybercriminal will hack into the merchant\u2019s online credit card processor and get a list of all debit and credit cards most recently used. Some carders also take advantage of data breaches at major retailers or payment processors to obtain large volumes of stolen card information. Others simply purchase stolen data from a carding shop, where thousands of compromised cards are traded daily.<\/p>\n\n\n\n

That\u2019s not to say that\u2019s the only way they can gain access to stolen credit card information (we\u2019ll discuss these other strategies in the next section). Suffice it to say that however they retrieve the credit card data, they use a bot\u2014software made for performing automated tasks over the internet\u2014to determine if the credit card details are valid, often through brute force attacks that test large volumes of stolen card data. <\/p>\n\n\n\n

Once a card is proven to be valid, it is used for even more illegal activities. For example, it can be used to buy store-branded gift cards or prepaid cards, which are then used for reselling or cash withdrawal. These unscrupulous individuals can even choose to sell these prepaid gift cards themselves or use them to make fraudulent purchases that are harder to trace. This carding guide will also explain how criminals obtain stolen credit or a debit card information and use it for profit.<\/p>\n\n\n\n

Some carders go as far as selling all the verified card details to criminal rings on carding forums and other criminal markets. In fact, in 2022, credit card data on the dark web skyrocketed by a whopping 135%<\/a>. Besides credit card information, these forums often feature a wide range of other valuable digital assets for sale, many of which can be used for identity theft. Fraudsters may also trade compromised accounts from various services such as PayPal, Uber, and Netflix. Additionally, they frequently deal in stolen loyalty card points, which can be redeemed for goods or services, further broadening the scope of illicit activities in these darknet markets.<\/p>\n\n\n\n

Unfortunately, the original card owner mostly remains unaware of the fraudulent charges until all their stolen funds have been used or transferred to another account. At this point, it\u2019s usually too late to recover the money. <\/p>\n\n\n\n

The thing is, carding is not only disadvantageous to the cardholder. It\u2019s also detrimental to the merchant. Any time there\u2019s a disputed purchase, the merchant may be forced to give chargebacks. This means they have to reverse the online purchases or transactions and refund the money to the credit or debit card holder\u2019s account.<\/p>\n\n\n\n

The merchant may also face additional financial burden in the form of carding reversal charges as part of their service agreements. They may also lose money from legitimate online purchases<\/a> if payment processors decide to block transactions until the issue is resolved. Recovering the products carders purchase is also hard. Then, of course, there\u2019s the reputational damage that\u2019s even harder to repair.<\/p>\n\n\n\n

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<\/span>What are the top carding attack techniques?<\/span><\/h2>\n\n\n\n

There are several carding methods used to steal and validate credit card details online. We\u2019ve briefly touched on how hackers can gain access to payment card data for their carding attacks. In this section, let\u2019s look in detail at other techniques:<\/p>\n\n\n\n

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Credit Card Skimming<\/h3>\n\n\n\n

Credit card skimming occurs when criminals alter an ATM machine, gas pump, or POS system with a similar-looking piece of equipment. This equipment then records the magnetic strip code, card number, expiration date, and PIN. <\/p>\n\n\n\n

The criminals will then use Bluetooth to transfer card information to their own devices, hardly ever coming into contact with the original machine. These attacks often happen at the point of sale, where unsuspecting customers swipe or insert their cards without noticing the skimmer.<\/p>\n\n\n\n

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Source<\/a><\/figcaption><\/figure>\n\n\n\n

In the first half of 2023 alone, 120,000 cards and 3,000 unique financial institutions were affected by card skimming attacks. This was a staggering 77% increase in skimming incidents from the previous year.<\/p>\n\n\n\n

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Social Engineering<\/h3>\n\n\n\n

Social engineering refers to the practice of manipulating a person to divulge confidential information\u2013including credit card details\u2014to be used for criminal purposes. The stolen information can also be used to gain access to the victim\u2019s computer system and steal other sensitive data like social security numbers, potentially leading to identity theft. <\/p>\n\n\n\n

Phishing, vishing, smishing and pharming are types of social engineering attacks.<\/p>\n\n\n\n

A phishing scam<\/a> happens when cyber criminals send emails to unsuspecting people while purporting to be from known companies. These emails attempt to induce the victim to divulge sensitive information such as bank account info, credit card details, usernames, or passwords.<\/p>\n\n\n\n

Vishing and smishing are similar to phishing. Only, vishing<\/a> involves the use of phone calls to gain access to a person\u2019s sensitive information. Smishing, meanwhile, involves the use of SMS. A malicious link is typically included in the SMS. When the unsuspecting victim clicks on the link<\/a>, they are directed to a website, which may prompt them to download malicious software. We\u2019ll talk about malware later.<\/p>\n\n\n\n

The last one, pharming, involves redirecting website traffic to another fake site, which then prompts the victim to disclose critical information. <\/p>\n\n\n\n

Social engineering accounts for a whopping 98% of cyber-attacks. According to the FBI\u2019s Internet Crimes Unit, in 2021, phishing, vishing, smishing and pharming victims amounted to 323972, the most number of cybersecurity victims.<\/p>\n\n\n\n

Attackers may also use shoulder surfing\u2014visually observing someone entering their PIN or card details in public\u2014to steal sensitive information without digital tools.<\/p>\n\n\n\n

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Malware<\/h3>\n\n\n\n

Malware refers to intrusive or malicious software created by hackers to damage computer systems or gain unauthorized access to sensitive data, including credit card numbers and login credentials. These breaches often result in unauthorized charges made using stolen card data before victims even notice. Trojan viruses, worms, ransomware, spyware, viruses, and adware are all examples of malware. Malware is not only used for carding\u2014it\u2019s also commonly used in other forms of fraud, such as identity theft and account takeover schemes.<\/p>\n\n\n\n

The majority of malware is spread as trojan viruses like .doc files and .exe files, and can be distributed using some form of social engineering. The number of malware attacks is increasing by the year. In fact, in 2022, there were 5.5 billion malware attacks, a 2% rise from the previous year.<\/p>\n\n\n\n

As you\u2019ve seen, cybercriminals may employ a combination of the tactics above to gain access to credit card details they\u2019ll use for a carding attack. That\u2019s why for the best protection, cardholders should take the time to understand these strategies and implement cybersecurity best practices to prevent or counter them. For instance, they shouldn\u2019t click on dubious links. They should also take the time to check the authenticity credit protection services of the messages sent to them. Another option is to use credit protection services<\/a> that can alert them of fraudulent activities related to their card. Additionally, staying informed about the best practices to secure your web application<\/a> can help both businesses and users create safer online environments that reduce the risk of exploitation.<\/p>\n\n\n\n

eCommerce businesses like you should do their part as well. They should identify all points of vulnerability in their site hackers may exploit to get a hold of sensitive information, including customers\u2019 credit card details. They may use AI chatbots for hacking purposes to identify these. Once identified, they can make the necessary adjustments or deploy the appropriate cybersecurity solutions<\/a> to ensure their customers don\u2019t fall victim to carding attacks. Weak security can unintentionally aid cybercriminals in running carding operations that target both large platforms and small online stores. When malware is used to harvest payment data, it can quickly lead to widespread fraud and financial losses across multiple platforms.<\/p>\n\n\n\n

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<\/span>What are the measures implemented by businesses to combat carding fraud<\/span><\/h2>\n\n\n\n

As criminals get better at scheming, businesses must implement stronger security measures to protect sensitive customer data and reduce fraud risks. That said, let\u2019s look at a few other measures used by businesses to combat carding fraud, and which you can implement, too.<\/p>\n\n\n\n

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1. Address verification service (AVS)<\/h3>\n\n\n\n

The AVS system compares the billing address provided at checkout to the one in the card issuer\u2019s records. The result can be one of these three:<\/p>\n\n\n\n