Online transactions are nameless and, therefore, appealing to fraudsters – the card and the cardholder are absent, physical card features cannot be examined, the chip cannot be read and the behaviour of the card holder cannot be observed.
When the bank approves an authorisation request indicating that the account exists and is in good standing i.e. that the account is not closed or the card has not been reported stolen and that the cardholder has enough funds in the account to make the purchase at the time the request for authorisation is made.
Security should be made a top priority for every client. Virtual Credit Card Terminals should be backed by PCI compliant security features designed to protect the customers. An additional security measures are required for merchants to opt for payments from local cards thus blocking foreign card transactions as the bulk of fraud attempts usually stems from foreign cards.
Some of the measures are as follow:
- MasterCard/Visa International – 3DSecure
One of thee security protocols implemented by MasterCard/Visa International is 3DSecure. The concept behind 3D Secure is that the system should authenticate the eligibility of cardholder to use a card before processing a transaction – if successful then there is a liability shift away from the merchant and their bank to the cardholder and their bank. Thus protecting the merchant against fraudsters.
- Bank Security Measures
The bank carries out their own security checks on transactions presented for settlement and authorisation. These include checks for stolen cards, lost cards, hotcards , attempted fraud etc. The authorisation, verification and settlement is handled between the cardholder's bank and the merchants bank.
- Merchant responsibility
The merchant has certain tasks which include their own security checks. Always ensure while delivering that the recipient actually resides at the delivery address for follow up in case of fraud and checking that the actual credit card is in their possession.
