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Tools for prevention of credit card
fraud
Fraud management services – Identity
thefts cost consumers and merchants huge
amounts every year. Hence, it has become
a necessity for merchants to implement
the best and the latest for management
of fraud protection. Following are a few
tools that are widely used for fraud
prevention:
Address Verification Service – AVS is a
risk-management tool used by merchants
for the acceptance of transactions in
the absence of a cardholder or the card,
or in the presence of the card and the
non-working of the magnetic stripe
during sale. An AVS request is submitted
by merchants directly via the
credit-card merchant processors to
specific credit card associations for
comparisons of addresses. The “credit
card association” will then verify the
billing address of the cardholder.
Card security verification – This tool
collects the three-digit or four-digit
credit card numeric code which is
provided during purchase. The card
verification requests are directly
submitted by the processing companies to
credit card associations. The security
value on the card is then evaluated
against the value in the file of the
card issuer. The card verification
schemes are provided by big card
associations which are also known as CID
(Discover Card), CID (American Express),
CVC2 (MasterCard) and CVV2 (Visa).
Authentication of credit card – Both
MasterCard and Visa provides services
for authentication by enabling the
issuers to verify cardholders’ ownership
of account during purchases over the
internet. With MasterCard SecurityCode
and Verified by Visa or VbV, costumers
get assurances that the usage of
bankcards over the internet is pretty
safe. Moreover, traders get protection
from chargebacks from issuers on fully
authenticated transactions. Since
transactions are authenticated by
issuing banks, merchants will be
reimbursed. This means that traders need
not bear the cost or risk of fraud. When
cardholders shop at participating
SecureCode or VbV merchant sites, the
checkout procedure remains as it is
until a consumer selects the “buy”
button. If bankcards are registered with
participating issuers, the customers
will have to enter the SecureCode
credentials or the VbV password. Through
simple checkout procedures, a bankcard
issuer can confirm the identity of a
consumer.
Transaction scoring – Risk management
solutions combine technology with an
access to 3rd party
databases, human insight, and
rules-based processing to provide
traders with clear recommendations if a
transaction has to be accepted,
challenged or denied.
Identity Authentication – The identity
authentication services constructs a
card-present virtual environment by
carrying out the authentication of a
consumer’s identity in real time. This
service helps in detecting
identification fraud with the use of
statistical analysis, proprietary
databases and government-issued
identification. This service also
prevents criminals in-the-making from
robbing a customer’s identity and also
deterring customers from making
authorised purchases and later denying a
transaction.
Age Verification – This service uses the
government-issued international database
for identifications in order to verify
the identity and age instantaneously
over the internet. It also provides a
tool for fraud-screening and also meets
the legal compliance. All that is
required for merchants to do is seen the
collected user information for
instantaneous identity or age
verification.
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