Companies that are processing payments online are often well aware of the risks associated with accepting these types of payments. A person can enter a credit card number to make a payment to your business, but there’s no way to fully verify that they are the actual card owner.
The risk of people making fraudulent payments and transactions comes with being an online business. Since these types of transactions can have negative effects on your business, through circumstances like chargebacks, they are something that needs to be paid attention to.
In the face of the ongoing pandemic, a lot of people are still working from home – including the fraudsters! Protect your business by implementing AVS and CVV.
When a person notices a transaction has been made on their credit card that they did not initiate, their bank is generally informed, and they get their money back. As a business, this means that you could lose out on a sale, but you will also be hit with a chargeback fee in many cases.
Studies have shown that businesses can see losses due to fraud at a rate of 1.5% of their total revenue each year and, in some cases, more. By authenticating transactions you receive, you can decrease fraud costs. Read on to learn more about what AVS and CVV are, as well as how to integrate them into your system and whether you need both.
What are AVS and CVV?
There are two ways that merchants often go about decreasing losses due to fraud. The first is called AVS, also known as the Address Verification Service. This is a practical, yet simple way to verify that a customer is the cardholder. At the time of the authorization, your gateway will check if the billing address of your customer entered during the checkout process matches what the bank that issued the credit card has on file. If the billing address entered during the checkout process doesn’t match the issuing bank’s records, there’s a good chance the transaction being attempted is fraudulent.
There are many different permutations of a “positive” AVS response. The best to hope for is a match on the street address number and the ZIP code. Anything less than that should be treated as suspect.
CVV, as well as CVD and CVV2, are other security features that can help protect companies taking online payments. The payments industry is moving towards requiring a form of CVV, which is also called Credit Verification Value, in all transactions where the physical card is not present. Countries like Canada have recently made this type of verification mandatory, and many other countries are moving that direction quickly.
A CVV is a three or four-digit number found on the back of MasterCard, Visa, and Discover cards. American Express cards place the four-digit CVV code on the front of the card. This type of protection is to help ensure that the card is on hand when a purchase is being made. One of the reasons that a CVV security feature is essential is that it is a number that cannot be stored even after a transaction is authenticated. This makes it more difficult for fraudsters to use stolen cards that are obtained from a database or through other means.
Do I Need Both AVS and CVV?
Some companies try to utilize only AVS or CVV, both of which can be relatively effective. When both of them are used together, however, it is more likely that the transactions being made are legitimate. As a merchant, you are looking to decrease the number of chargebacks your company gets. This means a higher percentage of successful transactions, but it also means fewer chargeback fees. By having both, you are increasing the security you offer in your online checkout portal and are less likely to be a victim of fraudulent payments.
Your company can have a higher success rate of rejecting transactions that are suspicious. With 25% or more of chargebacks being the result of a purchase made with a stolen credit card, reducing risk is essential. If you have questions about fraud prevention programs and how to avoid fraudulent payments and chargebacks in your business, your merchant services provider would be more than happy to assist. Keeping chargebacks down is in everyone’s interest and it’s a win/win.
How to Integrate AVS and CVV
It is recommended that companies integrate both of these security measures into their online stores. To do so, partnering with a payment provider that offers both is vital. We ourselves offer CVV and AVS standard with any type of account. With additional access to secure servers to store sensitive payment information, your payment provider can help you reduce chargebacks. These basic fraud tools can help your online store or business not only save money directly but also save time.
Fighting chargebacks that could be avoided, as well as fraudulent transactions, takes resources and time. By partnering with a payment provider that gives access to both of these things, as well as top fraud prevention program services, you can increase your conversion rate, reduce your chargebacks and more.
Jonathan Corona has 15 years of experience in the electronic payments industry. As MobiusPay’s EVP, Corona is primarily responsible for day-to-day operations as well as reviewing and advising merchants on a multitude of compliance standards set forth by the card associations. MobiusPay specializes in merchant accounts in the U.S., EU and Asia. Follow them @MobiusPay on Twitter, Facebook and IG.