Combatting Payment Fraud

There are always risks associated with doing business online. From hacking, to data theft and payment fraud, businesses have to be careful, and protect themselves against liability and losses. Luckily, there are numerous tools and techniques out there that help increase security. When it comes to payment fraud in particular, credit card issuers and merchant banks offer the means to reduce losses. In this article, we’re going to take a look at how you can protect your business when operating online.

Address Verification Service

Also known as the AVS, the Address Verification Service is one of the most commonly used anti-fraud methods. It is an effective tool made available by all credit card companies, and it works by verifying a customer’s billing address, with the billing address logged by the credit card company. If the addresses don’t match, the payment is declined either manually or automatically.

The AVS is sometimes required for transactions in certain categories in order to properly determine the interchange rate. Past a certain sales volume, using the AVS appropriately could mean that you benefit from a lower processing fee.

Card Verification Value

The CVV, which also sometimes known as the CVC or CID, is a code printed on the back of the credit card, and it is comprised of either 3 or 4 digits depending on the credit card. The CVV is not stored by the seller, which means that in the case of a data breach, hackers will not be able to defraud companies using stolen credit card information.

In some cases, CVV may also help lower the costs of keyed transactions, since keyed transactions are considered higher risk. Processing costs can be lowered by lowering the risk of keyed transactions using CVV.

3D Secure

The 3D Secure is a fraud prevention protocol that uses the seller, the credit card company and the acquiring bank to ensure that the person making the purchase is the owner of the credit card. When using 3D Secure, each purchase will require the user to enter a personal code. It is an eCommerce exclusive option, and it is especially useful for companies that often engage in wholesale, because it minimizes the risk of a very costly fraud attempt.

For more information on the best ways to combat online payment fraud, or to open a merchant account, please call (888) 924-2743 or go to


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