Preventing Fraudulent Card-Not-Present Transactions
Processing credit and debit card payments over the phone or through a website is very convenient for both consumers and merchants. In fact, a whole new industry - the eCommerce - owes its very existence to the availability of eCommerce payment acceptance methods. As far as fraud prevention is concerned, however, card-not-present transactions present challenges that are very different from the ones a merchant operating in a face-to-face environment faces. Because payment processing transactions are done in the virtual domain, the merchant never gets to see either the card or the cardholder. The only way to obtain the consumer's account data is to rely on the information, provided by the consumer himself. There are, however, a number of services which, combined with a set of best practices, implemented and followed scrupulously, will help both direct marketing and eCommerce merchants reduce fraud and improve their bottom line.
Card-Not-Present Transaction Fraud Prevention Guidelines.
Authorize All Transactions. Remember that the floor limit for all card-not-present transactions is zero which means that you should request an authorization for every single one of them, no matter what the transaction amount. Not obtaining authorization leaves you helpless against both fraud and customer disputes.
Obtain Expiration Date. Always ask your customer to provide his or her card's "Good Through" date. It is another way to verify that the customer is in a physical possession of the card at the time of the transaction.
Obtain Card Security Verification Code. Card Security Verification is the 3- (for Visa, MasterCard and Discover) or 4-digit (for American Express cards) non-embossed numeric code on the back (for Visa, MasterCard and Discover) or the front of a payment card (for American Express). Obtaining the Card Verification Code in a card-not-present transaction is another, and very powerful, tool to verify that your customer is in actual possession of the card. Be advised that you should never store Card Verification Codes in your system. It is prohibited by the Credit Card Associations and violators may be assessed significant fines.
Always Use AVS. The Address Verification Service (AVS) allows merchants to verify the authenticity of the billing address that a cardholder has provided at the checkout. It works by routing the provided address, through the Credit Card Associations, to the card issuer. The Issuer then compares the provided address to the one it has on file for its cardholder and responds by issuing a response code which contains the result of its investigation.
Using the above listed fraud prevention services and implementing the suggested procedures will help eliminate fraud and reduce chargeback levels. Consult with your merchant account provider if you need additional information or help. [http://www.unibulmerchantservices.com/apply-online/ecommerce-merchant-account/]eCommerce Merchant Account [http://www.unibulmerchantservices.com/moto-merchant-account/]MOTO Merchant Account
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