Tuesday, June 5, 2012

Fraud Prevention Guidelines for Online Payment Processing

Fraud Prevention Guidelines for Online Payment ProcessingOur readers know very well that, as far as fraud prevention is concerned, non-face-to-face transactions are much more problematic in that they are quite different from the payments that merchants operating in a card-present environment face. As online payment processing is by default done in the virtual reality, the merchant never actually sees and evaluates either the card or the consumer.

On the bright side, though, there are a great number of solutions and best practices that, if implemented with each transactions and followed constantly, will help MO / TO and e-commerce merchant account users minimize fraud and improve their bottom line.

Fraud Prevention Guidelines for Online Payment Processing

If you do your online payment processing in a non-face-to-face setting, incorporate the following suggestions into your processing cycle for each of your transactions:
  • Get an authorization approval for all payments. The floor limit for all card-not-present payments is always zero and all that means is that you have to ask for and receive an authorization approval for each transaction, whatever the payment amount.
  • Get the card's expiration date. Always ask your customer to give his card's expiration date. It is used as another way to validate that the cardholder is in a physical possession of his card at the time of the transaction.
  • Get the card's security code. Card security codes are the three- (for Discover, MasterCard and Visa cards) and the four-digit (for American Express cards) codes on the back (for MasterCard, Discover and Visa cards) or the front of a payment card (for American Express). Obtaining the card security code in a card-not-present transaction is a very powerful way to verify that the consumer is actually in physical possession of his card. Bear in mind that you must never store the card's security codes anywhere in your database. This practice is forbidden by the Credit Card Associations and violators, if caught, will be slapped with steep fines.
  • Use the AVS (Address Verification Service). The (AVS) allows card acceptors to verify the validity of the billing address that a consumer has provided at the checkout. It does that by sending the submitted address, through the Credit Card Associations, to the credit card's issuer. The issuer then matches the received address to the one it has on file for its own cardholder and sends back a response code that lists the result of its verification process.
Using the above mentioned fraud prevention solutions and processes will help limit fraud and minimize chargebacks. Call your online payment processing company if you need any additional information or assistance.

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