Know your global e-commerce environment

Joseph Vukasovic -
Your Focus
- 18 Sep 2008 ( #378 )
4 min read
Joseph Vukasovic is director, payment systems integrity, Australasia, for MasterCard Worldwide. He offers some sound advice to successfully trade online and identify and avoid payment card fraud.
Operating a business online can open up a world of new opportunities for your organisation, allowing you to attract more customers and sell more products or services through a completely new channel.

The acceptance of payment cards is the most efficient way to make online sales, which usually involves card-not-present (CNP) transactions. Whilst accepting payment online can be efficient for you and attractive to your customers, it does require vigilance against card-not-present fraud. However, taking the proper precautions can minimise the risk involved in trading online, and mean a more secure environment for you and your customers.

Taking the proper precautions can minimise the risk involved in trading online.
Taking the proper precautions can minimise the risk involved in trading online.
MasterCard is dedicated to working with online merchants to provide secure online payment services, allowing consumers to feel safe in making their transactions, and merchants to be safe in the knowledge that they are doing everything they can to minimise the risk of fraud.

If you are aware of the appropriate precautions to take in the day-to-day running of your business, and are armed with the knowledge of what kind of 'scams' are out there, you are better placed to protect your business and customers.

To ensure your e-payments are made safely and securely, MasterCard recommends taking the following steps to avoid becoming a victim of fraud and protect your business's finances and reputation.

* Prior to shipping merchandise, call the telephone number the customer has provided to verify the transaction information. Often, fraudsters are unable to verify the information they originally provided since they order at random and rarely keep records of requests.
* Be sensitive to priority shipments for fraud-prone merchandise such as those with high resale value, which may indicate a fraudulent transaction.
* Be aware of any orders from past customers that deviate from their usual purchasing patterns.
* Avoid accepting payment for goods on multiple credit cards as this can suggest fraudulently obtained credit cards, particularly when involving shipment to a single address.
* Avoid overpayment on goods where you may be requested to transfer the excess funds to an unknown account.

Protecting cardholders and merchants, preventing fraud, and safeguarding financial information are top priorities at MasterCard.

MasterCard continually works with financial institutions and the payments industry to combat fraud, including card-not-present fraud, through a multifaceted suite of security programs. Securing online transactions with MasterCard SecureCode, the use of fraud monitoring software by financial institutions, the PCI DSS merchant education program and a cardholder Zero Liability policy all work together to ensure that cardholders and merchants can use their MasterCard cards online as securely as possible.

There are a number of MasterCard Solutions which have been specifically designed to allow e-commerce merchants to conduct business activities with the greatest level of confidence and security, including:

MasterCard SecureCode makes online shopping more secure for retailers and their customers by providing cardholders with a unique personal code for their transactions. In addition to helping prevent chargebacks and fraud, MasterCard SecureCode can give customers greater peace of mind and allow electronic retailers to ship orders with confidence. It's a simple, cost-effective way to encourage e-commerce while reducing risk.

Card Validation Code 2 (CVC 2) is a three-digit code indent printed on the signature panel of MasterCard cards. This added security measure enables a merchant to verify that the buyer has the actual card in hand during a card-not-present transaction. MasterCard strongly recommends that businesses ask each consumer for the Card Validation Code when conducting a transaction on the Internet or by phone. Like mag-stripe data, merchants should never store CVC 2 codes.

Address Verification Service (AVS) helps reduce the risk of fraudulent use of account numbers in card-not-present transactions. When a customer provides an address with an order, AVS automatically compares it to the billing address on file with the card issuer. This risk reduction measure is especially helpful to merchants conducting business on the internet. If the billing address and the card address on file do not match, you will receive a response code indicating this during transaction processing. You can then choose to either deny or proceed with the transaction. This service is only available in the US.

Payment Card Fraud Prevention Training Online is also another way MasterCard Worldwide is helping merchants to equip themselves with the right skills to manage and prevent fraud. The training is designed to familiarise merchants with the security features of MasterCard cards and enable them to learn how to identify fraudulent cards and the appropriate actions to take if fraud is suspected.

If you suspect you have been a victim of a fraudulent online scam, you should immediately contact the financial institution that issued your card, or provides your payment facility.

To learn more about card-not-present transactions and merchant security solutions visit Mastercard's website.
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