Get What’s Coming to You

Address verification is based on the numbers in a customer’s billing address. Here’s how it works: After the data are collected, they’re submitted for authorization. The information then is compared to data on file with the issuing bank for that user. You get one of the following responses: match, no match or partial match.

The best part to address verification is there are no added processing costs. However, address verification can be subject to false positives, which in turn can result in lost sales.

(Note: Address verification is a highly effective tool in the United States, but still is in its infancy in the United Kingdom and Canada.)

Card security verification is available from the major credit card companies. Visa offers CVV2; MasterCard’s is CVC2; and Amex and Discover have CID. Employing these requires an extra step from your cardholder, and it also requires a change in your order-acceptance procedures. However, card verification is extremely effective, and doesn’t add to your processing costs.

Visa and MasterCard have taken steps to ensure that issuers use card verification tools. In fact, Visa dictates that U.S. issuers must support CVV2 to maintain chargeback rights for fraud. As of April 2005, that will apply to international issuers as well. Currently, both U.S. and international issuers are subject to that rule under MasterCard.

Verified by Visa (VbV) and MasterCard SecureCode are services that allow issuers to authenticate the cardholder at the time of purchase for Internet-based transactions. The cardholder registers his or her card with the issuer, adding a personal password to the account to enter at checkout.

When using VbV or Secure-Code, the merchant collects the authentication data, which then are submitted to the processor during authorization. The processor in turn passes the authentication to the card association. To use these, the merchant must integrate plug-in software that communicates to each card association’s central server to get issuer authentication at the time of purchase.