MasterCard SecureCode and Verified by Visa
These two e-commerce credit card processing fraud prevention services provide cardholder authentication for online transactions. Designed on the 3-D Secure protocol, the two authentication service validate the authenticity of cardholders to participating merchants. They allow consumers to choose a password with their card's issuer, and then to use it to validate themselves in a transaction. This helps retailers ensure that the card number cannot be used fraudulently on their e-commerce website.
E-commerce credit card processing users offering MCSC and VbV to their customers need to initially incorporate a software module called a Merchant Plug-In (MPI) on their web hosting server. Merchants who elect to implement MCSC and VbV have to use PCI compliant providers and merchant account processors.
Keep in mind that an MCSC and VbV merchant that is identified by the Merchant Fraud Performance (MFP) program could be subjected to a particular type of chargeback: Reason Code 93: Merchant Fraud Performance Program.
E-Commerce Fraud Screening
Today, a great many fraud screening systems and practices are available to enable e-commerce credit card processing users in assessing the risk of a given payment and, in some cases, suspend its processing if certain pre-determined high-risk characteristics are found. Merchants are encouraged to devise their own internal fraud screening procedures or use a third party screening service.
A strong fraud screening system will suspend a payment if information:
- Matches data stored in the merchant's internal negative files.
- Exceeds pre-defined velocity limits and controls.
- Detects an AVS or security code mismatch or no match.
- Match other high-risk signs. For example, payments placed with anonymous e-mail addresses, high-risk shipping addresses or foreign-issued cards.
Separate Low Risk Transactions
For many e-commerce credit card processing users, getting third party fraud scores for each transaction may not always be cost-effective. The merchant can reduce costs by separating low risk or low-value orders, where the potential losses are lower than the cost of the scoring procedure itself, thus taking them out of the scoring process.
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