Merchant Accounts and Credit Card Processing Services
Credit Card Processing / Check Processing / Affiliate Programs / Fraud Protection
VbV & 3DS is a PIN that cardholders use to verify the legitimacy of online transactions, similar to a PIN that is used with debit cards. This program helps *BOTH* the customer and the merchant; it protects the consumer by reducing fraudulent transactions, and at the same time protects merchants from fraud related chargebacks.
Why use VbV & 3DS?
The main problem that merchants face when accepting credit card payments online is protecting themselves from fraudulent chargebacks, whether truly fraudulent or “friendly fraud.” Fraudulent transactions are when a customer’s card data has been stolen, and the purchase is not legitimate. Friendly fraud is when a customer fully knows that they purchased the service/product, but is trying to take advantage of the chargeback rules, which are set to favor the customer over the merchant. This is especially a problem with merchants selling digital products online such as software downloads, eBooks, and even traditional products or services sold in a card not present environment. Merchants that have disputed chargebacks in the past, know that the “burden of proof” lies with the merchant to prove that a transaction is valid, if not, the burden of repaying the chargeback lies with the merchant as well.
Two of the most common chargeback codes a merchant will see, are Fraud codes, mainly “Fraudulent Transaction” or “Cardholder Does Not Recognize.” To issue a chargeback for these reasons, a customer simply calls their card issuing bank and claims they did not make the purchase, and it is then up to the merchant to prove that the transaction was not fraudulent. The problem with this is, even a customer who knowingly purchased your service, can still process a chargeback for these reasons in a “card not present” environment, and, in most cases, the merchant will lose these chargebacks without additional documentation to verify the sale, i.e. a signed order form or signature delivery, which obviously isn’t practical for many online transactions.
What VbV and 3DS provide is a way for the merchant to “block” Fraud type chargebacks. By simply providing your customer the option to use VbV & 3DS, you will protect 65-70% of your transactions from Fraud type chargebacks. Visa will block the customer’s ability to initiate a chargeback for Fraud type reasons, whether or not the customer (a) enrolls in VbV or (b) uses their VbV PIN password. As long as you offer VbV to the customer, your transaction is protected. MasterCard will protect the transaction against Fraud chargebacks only if the customer enrolls in 3DS.
How does VbV & 3DS work?
VbV & 3DS is integrated through our gateway, using either API or Secure Hosted Buy Page integration. There are no “pop-ups” or etc…there is simply an additional screen during the checkout process, asking the client to either (a) enroll in VbV or 3DS or (b) to enter in their existing PIN. Then our secure gateway communicates directly with Visa & MasterCard to process the transaction.
Helpful Information:
Verified by Visa:
https://usa.visa.com/personal/security/vbv/index.html
MasterCard SecureCode:
http://www.mastercard.com/us/personal/en/cardholderservices/securecode/
Additional Fraud Services
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National Bankcard Systems is a registered service provider for the following FDIC-Insured Banks:
JP Morgan Chase Bank; BankcorpSouth Inc, Tupelo, MS;
US Bank of Minneapolis, Minneapolis MN.
