Payment Authentication for Beginners

Women looking at computer screen in professional office

If you landed on this blog post because you’re terrified of payment fraud, you’re not alone. And unfortunately, you have good reason to be worried. In 2015, 5.65¢ of every $100 processed through card-based transactions were lost to fraud — a fraction that can have a huge impact when considering your total revenue for the year. As a business owner, you need to know how authentication tools can help keep your business protected.

Payment authentication is all about minimizing the risk of fraud in online payments — and thus the risk that you will be hit with chargebacks — by making sure your customers are who they say they are when making a purchase.

Remaining vigilant is important, but this doesn’t mean you need to be in a state of constant fear. If you want to make sure you have the necessary security measures in place, this checklist is a good place to start.

Confirm Your Customer’s Address

Do you want to verify the true identity of your customers? Require them to provide more than just a credit card number.

Address verification system (AVS) matches the address provided by a customer to the address they have on record with their credit card provider. AVS is supported by the major credit card companies like Visa and Mastercard, ensuring fast and efficient transactions for your customers — while keeping you protected.

Put Customer Authentication on the Credit Card Brand

Integrating with 3D Secure allows merchants to add an extra layer of security to their card transactions. 3D Secure will sends customers paying with digital wallets to a payment form hosted by Visa, Mastercard, or Amex, where they will be prompted to enter a passcode. This integration lowers merchants risks by making the card issuer responsible for authenticating the transaction.

While we typically don’t promote re-directing customers off-site, 3D Secure allows you to provide more seamless and secure authentication experiences to your consumers. This will ultimately drive conversions and increase sales, while providing your customers with greater peace of mind that their transactions are secure.

Ensure They Have the Card, Not Just the Number

If you want to make sure that customers without a credit card in hand aren’t making a fraudulent purchase, ask them for the Card Verification Value (CVV) — a number that appears only on the physical card.

The CVV provided by the customer is checked against the CVV on record with the credit card company. No match? No sale. This is a simple yet effective way to reduce your risk of chargebacks.

Beef Up Security with Extra Layers of Protection

Want to be extra careful when authenticating payments? When the stakes are high, you have various options for implementing advanced authentication.

For instance, using transaction filtering, you can block transactions from problem sources. This lowers your chances of being hit by the same fraudster twice by preventing specific IP addresses or card numbers from submitting transaction requests. Or you can validate your customers’ payment and shipping information at the point of checkout against Equifax data in real time.

These and other advanced tools can be customized to make sense for your business and reflect the level of fraud risk that you are facing.

Reduce Your Risk, Maintain Your Focus

The threat of fraud is real and pervasive. Payment authentication involves using tools to protect your business against fraud whenever customers make online purchases. Following the steps in this checklist is a good start to minimizing your exposure to fraud. Better yet, verified payment providers like Bambora can handle the heavy lifting with trusted security tools, so that you’re free to focus on doing what you do best: running your business.

If you’re eager to shut the door on fraud as quickly as possible, sign up with Bambora today to protect your business with our powerful Fraud Defence tools.

Photo: ESB Professional / Shutterstock Inc.

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