Credit Card Fraud Technologies

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Credit Card Fraud Technologies

Hi Friends, 

You can see fraud technology for credit card.Fraud detection technologies enable merchants and banks to perform highly automated and sophisticated screenings of incoming transactions and flagging suspicious transactions.While fraudsters are using sophisticated methods to gain access to credit card information and perpetrate fraud, new technologies are available to help merchants to detect and prevent fraudulent transactions. 


This method consists of reviewing every transaction manually for signs of fraudulent activity and involves a exceedingly high level of human intervention. This can prove to be very expensive, as well as time consuming. Moreover, manual review is unable to detect some of the more prevalent patterns of fraud, such as use of a single credit card multiple times on multiple locations (physical or web sites) in a short span.


This technique is applicable in card-not-present scenarios. Address Verification System (AVS) matches the first few digits of the street address and the ZIP code information given for delivering/billing the purchase to the corresponding information on record with the card issuers. A code representing the level of match between these addresses is returned to the merchant. AVS is not much useful in case of international transactions.


The Card Verification Method3 (CVM) consists of a 3- or 4-digit numeric code printed on the card but is not embossed on the card and is not available in the magnetic stripe. The merchant can request the cardholder to provide this numeric code in case of card-not present transaction and submit it with authorization. The purpose of CVM is to ensure that the person submitting the transaction is in possession of the actual card, since the code cannot be copied from receipts or skimmed from magnetic stripe. Although CVM provides some protection for the merchant, it doesn’t protect them from transactions placed on physically stolen cards. Furthermore, fraudsters who have temporary possession of a card could, in principle, read and copy the CVM code.


A negative list is a database used to identify high-risk transactions based on specific data fields. An example of a negative list would be a file containing all the card numbers that have produced chargebacks in the past, used to avoid further fraud from repeat offenders. Similarly a merchant can build negative lists based on billing names, street addresses, emails and internet protocols (IPs) that have resulted in fraud or attempted fraud, effectively blocking any further attempts. A merchant/acquirer could create and maintain a list of high-risk countries and decide to review or restrict orders originating from those countries. Another popular example of negative list is the SAFE file distributed by MasterCard to merchants and member banks. This list contains card numbers, which could be potentially used by fraudsters, e.g., cards that have been reported as lost or stolen in the immediate recent past. Positive files are typically used to recognize trusted customers, perhaps by their card number or email address, and therefore bypass certain checks. Positive files represent an important tool to prevent unnecessary delays in processing valid orders.


Payer authentication is an emerging technology that promises to bring in a new level of security to business-to-consumer internet commerce. The first implementation of this type of service is the Verified by Visa (VbV) or Visa Payer Authentication Service (VPAS) program, launched worldwide by Visa in 2002. 

The program is based on a Personal Identification Number (PIN) associated with the card, similar to those used with ATM cards, and a secure direct authentication channel between the consumer and the issuing bank. The PIN is issued by the bank when the cardholder enrolls the card with the program and will be used exclusively to authorize online transactions. When registered cardholders check out at a participating merchant’s site, they will be prompted by their issuing bank to provide their password. Once the password is verified, the merchant may complete the transaction and send the verification information on to their acquirer.

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