Credit Card Fraud
18 October 2002, 11:12 AM
#31
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Ultimately, the only valid methods of cardholder verification mechanism (CVM) are:
Signature
PIN
Back in the sixties, when rules were drawn up, MOTO (mail order/telephone order) wasn't really an industry and people were happy to use cheque. Then the potential was seen, and... The rules stayed largely the same. If you don't have a signature, you're shafted.
This hasn't changed much at all. The reason? The banks make money from issuing cards, not from acquiring the transactions from merchants. They don't lose money from MOTO/internet card fraud, because the merchant cops for it, because the merchant hasn't got a piece of paper with a signature on it.
So, when your credit card tells you they offer "100% internet fraud guarantee", then know that they all do that free of charge, because the merchant takes the hit.
Recently, Visa and mastercard have made small moves to make this better, such as the SET specification (which is horrendously complex and shows what happen when you let techies drive a scheme through), and the Verified-by-Visa stuff, which is excellent but has little take-up so far. Why?
Because it costs the issuer money to implement, but it's the merchant who ultimately will benefit. Does the issuer pay for the implementation? Or do they do nothing.
There are liability changes proposed for Verified by Visa and the appropriate mastercard equivalent, but as the banks own Visa, they block the liability shifts from being implemented.
Stinks, doesn't it?
Signature
PIN
Back in the sixties, when rules were drawn up, MOTO (mail order/telephone order) wasn't really an industry and people were happy to use cheque. Then the potential was seen, and... The rules stayed largely the same. If you don't have a signature, you're shafted.
This hasn't changed much at all. The reason? The banks make money from issuing cards, not from acquiring the transactions from merchants. They don't lose money from MOTO/internet card fraud, because the merchant cops for it, because the merchant hasn't got a piece of paper with a signature on it.
So, when your credit card tells you they offer "100% internet fraud guarantee", then know that they all do that free of charge, because the merchant takes the hit.
Recently, Visa and mastercard have made small moves to make this better, such as the SET specification (which is horrendously complex and shows what happen when you let techies drive a scheme through), and the Verified-by-Visa stuff, which is excellent but has little take-up so far. Why?
Because it costs the issuer money to implement, but it's the merchant who ultimately will benefit. Does the issuer pay for the implementation? Or do they do nothing.
There are liability changes proposed for Verified by Visa and the appropriate mastercard equivalent, but as the banks own Visa, they block the liability shifts from being implemented.
Stinks, doesn't it?
18 October 2002, 11:15 AM
#32
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Totally.
Be careful of Paypal/Nochex/Billpoint etc. Billpoint doesn't take ownership of chargebacks so I suspect that Paypal and Nochex don't either.
Group buy on www.192.com searches?
Be careful of Paypal/Nochex/Billpoint etc. Billpoint doesn't take ownership of chargebacks so I suspect that Paypal and Nochex don't either.
Group buy on www.192.com searches?
18 October 2002, 11:21 AM
#34
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Can't remeber who does it, think its Insight, but they will only deliver your first order to the registered address for the card. Subsequent orders can be sent anywhere you request eg at work.
Not a bad idea really.
Not a bad idea really.
18 October 2002, 11:21 AM
#35
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Paul...
You're paying too much and waiting too long. We just sacked BMS (1.7% and 30 days) and have moved to Lloyds (1.59% and 4-5 days). The biz is only 6 months old. I think that there are deals out there. In my experience, BMS are solid but inflexible, Streamline are deaf and Lloyds seem keen. I take a dim view of the rates charged by Worldpay, Datacash, etc. FYI, we pay £0.05/transaction to our PSP.
Cheers
Lee.
You're paying too much and waiting too long. We just sacked BMS (1.7% and 30 days) and have moved to Lloyds (1.59% and 4-5 days). The biz is only 6 months old. I think that there are deals out there. In my experience, BMS are solid but inflexible, Streamline are deaf and Lloyds seem keen. I take a dim view of the rates charged by Worldpay, Datacash, etc. FYI, we pay £0.05/transaction to our PSP.
Cheers
Lee.
18 October 2002, 11:22 AM
#36
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...and I'd recommend that anyone taking CNP transactions in the UK joins http://www.early-warning.org.uk. Not perfect but better than nothing and the more members, the better.
[Edited by 12LEE - 10/18/2002 11:23:14 AM]
[Edited by 12LEE - 10/18/2002 11:23:14 AM]
18 October 2002, 11:24 AM
#37
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Pressurise your merchant acquirer for Verified by Visa support, and for the shift in liability. If you do everything right with this process, you are indemnified from fraud. Will try to find the details, but IIRC the scheme is...
cardholder shops as normal
goes to checkout
says that they want to pay by card
shop uses VbV plug-in to query VbV directory for participation
reply comes back, along with "card supports verified by visa" flag
shop sends redirect to users browser which prompts user to authenticate themselves against their card issuer
message comes back to shop saying "authenticated ok"
authorisation for txn goes on as normal
authentication confirmation data is passed back in batch at EOD.
Simple, really simple, tiny impact on merchant processing systems, tiny impact on everyone, but makes scheme wonderfully secure and much better for merchants because the burden of authenticating the cardholder is shifted to the only party with the data allowing them to do this effectively - the card issuer.
nick.
[Edited by chiark - 10/18/2002 11:30:29 AM]
cardholder shops as normal
goes to checkout
says that they want to pay by card
shop uses VbV plug-in to query VbV directory for participation
reply comes back, along with "card supports verified by visa" flag
shop sends redirect to users browser which prompts user to authenticate themselves against their card issuer
message comes back to shop saying "authenticated ok"
authorisation for txn goes on as normal
authentication confirmation data is passed back in batch at EOD.
Simple, really simple, tiny impact on merchant processing systems, tiny impact on everyone, but makes scheme wonderfully secure and much better for merchants because the burden of authenticating the cardholder is shifted to the only party with the data allowing them to do this effectively - the card issuer.
nick.
[Edited by chiark - 10/18/2002 11:30:29 AM]
18 October 2002, 11:49 AM
#41
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Lee -
Got a contact/web site for Lloyds ? Interested, although the last time I tried to go through this procedure with one of the High Street banks (Barclays), took them 6 weeks to handle the forms, only to be told "thanks, but no thanks". We're only 6 months old as well, although I suspect your punting through more transactions than us at the moment.
Chiark -
Keep the info coming, considering programming my web shop at the moment, so looking into what I need to include.
Got a contact/web site for Lloyds ? Interested, although the last time I tried to go through this procedure with one of the High Street banks (Barclays), took them 6 weeks to handle the forms, only to be told "thanks, but no thanks". We're only 6 months old as well, although I suspect your punting through more transactions than us at the moment.
Chiark -
Keep the info coming, considering programming my web shop at the moment, so looking into what I need to include.
18 October 2002, 12:03 PM
#43
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will try and find out the latest on this, as it's been about 8 months since I was last seriously involved... Arcot systems (a partner) were doing some work with, ah, "an important player" in this area.
18 October 2002, 06:01 PM
#46
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Excellent Merchant rates and other benefits offered e.g. parcel delivery at CardSave. www.cardsave.net tel: 08700 100 778
DL. Not connected but use 'em.
DL. Not connected but use 'em.
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