Verified By Visa-MasterCard Secure Code-Things You Should Know
Verified By Visa (VBV) and MasterCard Secure Code (MSC) are two standards that Visa
and MasterCard developed to protect transactions in a card-not-present (CNP) environment.
Two benefits that Visa and MasterCard boast:
- You are not liable for fraud resulting from the unauthorized use of Visa
cards.
- Fraud on your site is reduced.
However, there are things that you should know re: VBV / MSC before implementing
them on your web site. They might not reduce the fraud as one would expect.
Yes, they do help with the "I didn't do it" chargeback: it could be the reason code:
75 - Cardholder Does Not Recognize Transaction
However, if you do a lot of recurring billing, VBV / MSC will not help you with
these usual chargeback:
41 - Cancelled Recurring Transaction
The reason is simple - VBV / MSC require the cardholder's authentication.
And authentication is only done on the initial charge. All recurring charges
are usually completed by the
electronic payment
gateway and therefore, no cardholder authorization.
You also might run into problems in which the transaction has to be re-authorized.
Some merchants pre-authorize a credit card transaction for a certain amount until
they are ready to ship the merchandise. When they are ready to ship, they
do a post-authorization / sale transaction in their virtual terminal. Usually
this pre-authorization only lasts a few days, depending on the issuing bank.
So if this pre-authorization has passed, you might need to re-do the transaction.
Usually the gateway does this without you even knowing the pre-authorization has
passed. And at this point, you are not protected.
If, by chance, the transaction failed to authenticate, you are not covered.
Sales that use the "one-click buy" technologies are usually not protected either.
Now what you need to really know is this: If the credit card is Visa, and the cardholder
is not enrolled in VBV, you can still be protected (as long as the transaction is
not one of the above). However, if the cardholder is in the United States
with a MasterCard and not enrolled, you are not protected. The MasterCard
cardholder in The United has to be enrolled and authenticated for you to be protected.
Some high risk accounts like adult entertainment and gambling might not be covered.
These rules vary actually per card association, so you would be best to contact
your VBV / MSC vendor (not your merchant account provider / electronic payment gateway.)
Comments
There have been a lot of improvements for consumers and merchants using Verified by Visa and MasterCard SecureCode in the last two years. You have many major merchants using the programs, like Wal-Mart, Continental Airlines, Buy.com, Newegg, TigerDirect, Orbitz, etc. These merchants are receiving chargeback protection, lower bank interchange and making it safer for consumers to shop on line. Lots of small merchants use the programs too!