The answer is very little protection when using your credit card online with overseas vendors.
According to FNB (First National Bank), card holders can raise arguments relating to transactions on their cards and the bank will investigate and seek to recover funds. However, the bank warns that this process is practically not possible when interacting with non-reputable overseas vendors and when the customer has purposely released their card information. So, sadly, the responsibility is on you to make sure you are dealing with a reputable vendor.
What are the safeguards to prevent possible fraud?
The issue is that customers have no idea how secure the environment is at the vendor's offices and whether it has systems in place to protect your details.
Once a dealer has your card account number, the expiry date and the three digit code at the back of your card, it can proceed to execute a "card not present" transaction/s.
It is probably best to deal only with well-known retailers. If you are dealing with a new retailer that is not well known, originally pay with an electronic transfer until you are contented the retailer above board. It is also significant that the retailer has put in safety checks to secure your information.
Nearby, merchants would be provided with an online system through their bank so it is a more secure platform, but you may not have the same level of security when dealing with an unknown vendor abroad.
When you are transacting you need check the site for the following:
- "http" in the recipient's web address to make sure it is not a spoof site (a site that is created to mimic a genuine site).
- A padlock icon. Some sites also show which safety feature they use, like Thawte or Verisign.
- Many e-commerce vendors have signed up with "Verified By Visa" or Mastercard Securecode. If they have this logo it means that they have a secure payments system. These logos typically appear on the payment page.
- A site should never store your credit card details, so you need to input them every time you shop.
FNB says a preferable and safer method of payment to overseas sellers that may not be well known -- such as a bed-and-breakfast booking, for example -- is via a PayPal account. In this case the customer does not disclose his/her card or bank account details. You do, however, need to have an FNB account.
An interesting development is that you can no longer use your credit card to pay for online gambling with companies outside of South Africa's boarders. The banks are required by the authorities to monitor these activities and report on them.