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Card Not Present Transactions

Ask for the card expiration date. The Visa U.S.A. Operating Regulations states that where possible, card-not-present merchants should ask customers for the card expiration, or Good Thru, date. Including the date in your authorization request helps to verify that the card and transaction are legitimate. A MO/TO or Internet order containing an invalid or missing expiration date may indicate counterfeit or other unauthorized use.

Ask for CVV2 to confirm the cardholder has a genuine Visa card. The Card Verification Value Service (CVV2) is a three-digit security number indent-printed on the back of Visa cards to help validate two things:

  • The customer has a genuine Visa card in his/her possession.
  • The card account is legitimate.
Train your employees to recognize suspicious orders and customer behavior. Being able to recognize suspicious orders may be particularly important for merchants involved in telephone sales, and employees should be given clear instructions on the steps to verify these transactions. Read more about CVV2 below.

What to Do if You Are Suspicious
If you are suspicious about an order, try to verify the transaction by asking the customer for additional information. These requests should be made in a conversational tone so as not to arouse the customer's suspicions. If the customer balks or asks why the information is needed, simply say that you are trying to protect cardholders from the high cost of fraud.

Ask for a Code 10 authorization. A separate phone call to your authorization center asking for a Code 10 authorization lets the center know you have concerns about a transaction. Ask for the name of the financial institution on the front of the card. Separately confirm the order with the customer. Send a note to his/her billing address, rather than the "ship to" address.

Fraud Detection in a Card-Not-Present Sales Channel
To enhance profitability in the competitive e-commerce market, your business needs a secure and robust payment infrastructure that can handle the unique risks of card-not-present sales. With no face-to-face contact with your customer, no physical payment card to inspect for security features, and no physical signature on a sales draft to check against the card signature, your risks are usually greater.

Such transactions can lead not only to lost revenue, but also to higher operational costs. Furthermore, if fraud is excessive, it can affect your merchant discount rates and potentially even your ability to accept payment cards. Bottom line, if you do not manage fraud, it impacts your profitability.

CVV2: A New Three-Digit Value
An important new security feature for card-not-present transactions now appears on the back of most Visa cards. This new feature is a three-digit value which provides a cryptographic check of the information embossed on the card.

CVV2's Location
The CVV2 three-digit value is printed on the signature panel on the back of Visa cards immediately following the Visa card account number.

The CVV2 value helps validate two things:
  • The customer has a Visa card in his/her possession.
  • The card account is legitimate.
CVV2 is printed only on the back of Visa cards — it is not contained in the magnetic stripe information, nor does it appear on sales receipts.

Fewer Chargebacks—More Profits
Anyone in direct marketing or e-commerce wants to see chargebacks reduced. Using the CVV2 value can help minimize the risk of unknowingly accepting a counterfeit card or being a victim of fraud.

How to Use CVV2 for E-Commerce Transactions
For transactions conducted over the Internet, you may ask cardholders for their CVV2 online. Your Internet screen might include these elements, for example:


Include CVV2 in Authorization Requests
Authorization requests must include at least:
  • Account number
  • Expiration date
  • CVV2 value
  • Transaction dollar amount
Merchants participating in CVV2 can expect to receive a "match" or "no match" response.

Questions?
To learn more about the benefits of CVV2 and CVV2 technical requirements, contact Spectrum.


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Spectrum Merchant Services is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA
and of BancorpSouth Bank, Tupelo, MS.
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