Credit card fraud can be a nuisance and can indirectly damage your credit. Credit card issuing banks and organizations have developed security devices to prevent unauthorized use of credit cards. Not all banks support all security devices and not all payment processors or payment gateways support them. This help topic is not intended to be a comprehensive coverage of credit card fraud prevention, only some notes about what we have experienced and what works for us.
TeleSign Automated Telephone Call Verification
It seems that the security codes and address verfication (below) have inherent limitations. For instance, once the security code is given out, it is likely to be pirated along with the credit card number and expiration date. Address verification is not supported by all banks and fails often when PO boxes or ATM Visas are submitted. A new and very effective solution is TeleSign automated telephone call verification service.
CVV2 3-Digit Security Code
The 3-digit CVV2 security code can be found on the back of most US issued credit cards.
Requiring a security code match reduces exposure to fraud. The drawback is that most non-US issued credit cards don't support it. Depending on your business location and where your customers are, this may not be an option. For US merchants selling mostly to US customers, it is highly effective. An alternative payment option, such as the offline credit card processing option can be used in conjunction with the real time gateway in order to accommodate cards that do not support the security code.
Authorize.Net Security Code Settings
Login to the Authorize.Net merchant panel and click Settings on the left.
Under Security, click Card Code Verification
Check the boxes to activate code check conditions. Check all of them for the highest level of security. If you find that cards are rejected too often, look at the rejection code to evaluate how it is working and adjust accordingly for your customer base.
AVS Address Verification System
AVS is supported by most US credit cards and is not supported by non-US banks. As with the security code check, it may work for you or not depending on where your customers are located. For merchants who ship goods mostly within the US, the Address Verification System is a must have. Even within the US, there will be a small percentage AVS declines due to non-supporting banks and trouble with PO box addresses. In these cases, the offline credit card processing payment option may be used as an alternative.
Authorize.Net AVS Settings
Login to the Authorize.Net merchant panel and click Settings on the left.
Under Security, click Address Verification System (AVS)
Here are recommended settings for US merchants who ship hard goods within the US. If you find that a high number of legitimate orders are declined for AVS, look at the decline code to evaluate if the system needs to be changed.
