Both credit card fraud and debit card fraud are huge threats to merchants. The good news is that this fraud can be prevented with the right approaches, technologies, tools, and awareness.
The key to preventing card fraud is understanding how it happens and then reviewing your business systems to identify your risk areas. Knowing this information allows you to both detect and prevent fraud, while strengthening your overall processes.
Card Fraud Schemes 
Fraudsters are incredibly savvy and have developed some intelligent methods of committing card fraud. These fraudsters also depend on merchants not knowing how card fraud is committed – making it easier for them to go undetected. As the first line of defense against card fraud, be on the look-out for these savvy fraud schemes:

  • Stolen credit card details. Fraudsters steal and then often sell credit card details on the Dark Web. These criminals attempt to make purchases with or acquire new credit cards with these details.
  • Card testing. This is how criminals test or verify their stolen credit card information. Starting with small purchases to validate the card data, the criminals then move on to large purchases.
  • Diverted delivery. Fraudsters have the delivery sent to an address that is not connected to the credit card. Because the address verification service (AVS) does not review the entire address, the address mismatch can be overlooked.
  • Online skimming. Criminals prey on security flaws in online payment solutions and hack customer data. Often, criminals can acquire complete customer details including passwords, phone numbers, address, and order history.
  • Fraudulent gift cards. Using stolen credit card details, fraudsters buy gift cards and then use them to make purchases or sell to other criminals.

These card fraud schemes are effective in breaking a the bond of trust between you and your customers. Your customers no longer trust your online payment solution or security measures. You no longer automatically trust new and long-time customers and have become suspicious of large orders, a change in address, or a new credit card number.
Preventing Card Fraud
Card fraud does happen but it doesn’t have to happen to you. Now that you understand how fraudsters are likely to commit fraud and theft, you can take action to protect your business and customers.
Knowing who you’re selling to, how you’re selling to them, and where your customers are shopping from can provide you what you need to prevent card fraud. Using a multilayered approach allows you to use the technologies that make sense for your business and customers. Contact us to learn more about these fraud detection and prevention technologies:

  • Geolocation. Verify the location of the customer with the actual location of the active card.
  • Biometric analysis. Compare the customer’s fingerprint with that of the cardholder.
  • Address verification service. The issuer compares the address provided during the transaction.
  • CVV. Additional credit card security code required during the final payment authorization.
  • IP Intelligence. Deep analysis of the IP address used for the transaction to monitor possible risks associated with this location.
  • Device intelligence. Deep packet inspection and proxy piercing capabilities to expose specific identifying details of the connected device submitting the transaction.
  • 3 Domain Secure. A cardholder authentication protocol for e-commerce transactions and CNP purchases.
  • Merchant co-op. New orders are compared against millions of orders taken by other merchants.
  • SSL. Secure encrypted communication protocols between devices and payment solutions.

Having a proven and tested card fraud prevention solution in place is a necessary component of running a successful business. Fraudsters are looking for merchants who are blasé about the threats of card fraud and will slowly but surely damage the business and its customers.
Learning More About Card Fraud Prevention
The following Verifi resources can help you learn more about card fraud prevention. Do visit our Resource Center and Knowledge Base to learn more about protecting your business from fraud. 

We are your trusted partner in fraud detection and prevention. You can contact us to learn more about preventing card fraud and protecting your business.
 

Card-not-present, or CNP, transactions represent a major component of nearly every merchant’s revenue stream. CNP transactions happen when a customer buys a product or service with a credit or debit card over the phone, online, or through the mail.
Today’s buyers like the ease of use that comes with entering their credit card data and clicking Buy Now. Merchants appreciate how easy it is to sell to anyone anywhere in the world who has a valid credit card.
Of course, nothing comes for free and the simplicity and freedom that come with these transactions also require heightened attention to CNP fraud protection measures.
It’s important that all merchants, regardless of sales volume and digital traffic, are up to date with the latest in CNP fraud protection. In this article, we’ll look at CNP fraud with explanations on how it happens, how you can prevent it, and provide you with further learning resources.
How Does CNP Fraud Happen?
You are the first line of defense against CNP fraud, making it imperative that you understand how these business crimes occur. It’s wise not to presume that because CNP fraud hasn’t happened to you that it won’t. Fraudsters are preying on this presumption and looking for merchants who do not have the best CNP fraud protection solutions in place.

  • Stolen credit cards. Fraudsters purchase stolen credit card details on the Dark Web and then make fraudulent purchases.
  • Card testing. Criminals make small purchases with their stolen credit card details; these small purchases help them test the viability of the credit card details. These small purchases often go unnoticed and can lead to larger purchases, hurting both the victim of credit card fraud and the merchant.
  • Diverted delivery. Taking advantage of vulnerability in the address verification service (AVS), criminals are able to divert deliveries to an address not connected to the credit card.
  • Online skimming. Online users who login to free and unsecured Wi-Fi networks are easy victims for fraudsters. These fraudsters hack these networks and steal customer data, including passwords, credit card details, phone numbers, and order history. This data is used to mimic the customer.
  • Fraudulent eGift cards. Using stolen credit card details, criminals buy eGift cards and then use these gift cards to make purchases or to sell these eGift cards in secondary marketplaces.

The cumulative impacts of these fraud attacks result in chargebacks, increased bank fees and penalties, lost merchandise, damage to your brand and reputation, and revenue loss. Read on to learn how you can stop CNP fraud with proven fraud prevention techniques.
How Can I Prevent CNP Fraud?
The good news is that the technology and solutions you need to prevent CNP fraud are easily available and accessible. The key is ensuring that you’re using the right technology at the right time in the right way. As you learned above, fraudsters have multiple methods of committing fraud – meaning you need multiple layers of detection and prevention.
You can contact us to learn more about multi-layered CNP fraud prevention solutions, including:

  • Geolocation. Verify the location of the customer with the actual location of the active card
  • Biometric analysis. Compare the customer’s fingerprint with that of the cardholder
  • Address verification service. The issuer compares the addresses provided during the transaction
  • CVV. Additional credit card security code required during the final payment authorization
  • IP Intelligence. Deep analysis of the IP address used for the transaction to monitor possible risks associated with this location
  • Device intelligence. Deep packet inspection and proxy piercing capabilities to expose specific identifying details of the connected device submitting the transaction
  • 3 Domain Secure. A cardholder authentication protocol for e-commerce transactions and CNP purchases
  • Merchant co-op. New orders are compared against millions of orders taken by other merchants
  • SSL. Secure encrypted communication protocols between devices and payment solutions

The even better news is that you have the power and support to stand up to fraudsters and put an end to CNP fraud. The more merchants who take action, the better. With the right technology, you can stay ahead of fraudsters and you do not need to accept CNP fraud and chargebacks as part of doing business.
Learning More About CNP Fraud
We’ve put together some key Verifi resources that can help you learn more about CNP fraud and how it can impact your business and customers. Remember to browse our Resource Center and Knowledge Base to learn more about chargebacks, payment solutions, and fraud risk.

Contact us to learn more about Verifi solutions and to talk to our experts – make sure your business and customers are protected. Remember, you are the first line of defense against CNP fraud.


The fraud landscape is a moving target, and this means that merchants must be ever vigilant against fraud threats. A great deal of merchant focus is on stopping friendly fraud, and while this is a key area of fraud traffic, other fraud methods should not be overlooked.
Card testing fraud is one such fraud method that is easily overlooked. Because of the nature of card testing fraud, it often goes undetected by merchant fraud detection solutions and is only detected when it’s too late. Card testing fraud is just as costly and damaging to merchants as friendly fraud and chargeback fraud.
A recent study conducted by Radial in the first quarter of 2017 reports that of the merchants surveyed, card testing fraud was up 200% in the first four months of the year, compared to the same time period in 2016.
Card Testing Fraud Tactics
Card testing happens when fraudsters test stolen credit card details by making small online purchases. The fraudsters need to check the validity of the credit card details, and once they confirm the credit card is valid they proceed with making larger fraudulent purchases. The small purchase testing tactic allows fraudsters to go mostly unnoticed by fraud detection solutions and by the innocent cardholder.
Typically, fraudsters use bots and scripts to test the credit card information, then target merchant sites that provide automated responses that provide decline details. With this information, fraudsters are able to adjust the credit card details in hopes of success. For example, when a merchant website indicates that the expiration date is incorrect, a savvy fraudster can use the Dark Web and other tactics to determine the correct expiration date.
The end goal for the fraudster is to find a valid credit card and then to make large purchases from the merchant site they already tested. This fraudster is now a recognized customer, so there’s a chance the order won’t be flagged.
There is no need for merchants to feel helpless in the face of this technically savvy fraud. Knowing the signs of card testing fraud allows merchants to make changes to payment solutions and fraud detection strategies.

  • Small transactions. Have a solution that sends alerts for repeated small transactions from the same credit card number or IP address.
  • Many purchases in a short duration. The bots and scripts used by fraudsters are programmed to make as many purchases as possible, as quickly possible. These purchases can be from the same credit card or with multiple cards.
  • A high rate of authorization failures. This can indicate that a fraudster is testing credit card details, looking for valid information.
  • Address Verification Service (AVS) alerts. A large number of AVS messages can indicate card testing and invalid credit card use.
  • Card Verification Value (CVV) errors. Often, the fraudster does not have the correct CVV information. Fraud detection solutions should be ready to detect orders that are missing this crucial confirmation number.

While card testing does use technically advanced software and tactics, it is possible for merchants to detect and prevent card testing. Working with experts in payment solutions and fraud detection gives merchants the upper-hand in the fight against fraud.
Fraud Detection and Prevention
Detecting and preventing fraud must be a critical component of any merchant’s business strategy. Being aware of and ready to detect and prevent friendly fraud, chargeback fraud, card testing fraud, and other fraud methods, is key to business and customer satisfaction.
There are two principal victims of card testing fraud: the merchant and the innocent cardholder.
The merchant loses with chargeback fees/penalties, stolen merchandise that is never recovered, lost revenue from the fraudulent sale, and brand loyalty damage.
The innocent cardholder loses out with damage to their online history, time and energy spent on recovering from the fraud, the additional danger to personal security, and in trusting the innocent merchant.
Merchants can detect and prevent card testing fraud by ensuring their e-commerce solution is using the best-in-class of multi-layered fraud detection technology. This includes enforcing AVS and CVV checks and taking advantage of key fraud tools, such as geolocation, biometric analysis, merchant co-op, and 3D Secure protocols.
In addition, it’s important for merchants to have a secure e-commerce website and mobile apps that are in tune with card testing fraud methods. Merchants should update their e-commerce and m-commerce tools to adjust for the response messages that fraudsters rely on for card detail verification. Contact us to learn how to adjust credit card authorization response messages to circumvent card testing fraud.
We want you to be protected from all types of fraud – including card testing fraud, friendly fraud, chargeback fraud, account takeover, eGift fraud, and more. Using the best-in-class payment and fraud detection solutions allows you to be protected from all angles at all times.


Shoppers, particularly holiday shoppers, love eGift cards. Everything about eGift cards points to easy: easy to buy, easy to gift, and easy to redeem. For merchants, this all adds up to booming eGift card sales during holidays and special occasions such as Mother’s Day. However, for both merchants and shoppers, eGift cards can lead to an unexpected path of fraud, chargebacks, and loss.
According to ACI Worldwide, of all products sold by the merchants surveyed, eGift cards were the largest target of fraud between Black Friday and Christmas in 2015. ACI Worldwide reports that 9.5% of all fraud attempts during this period were on eGift cards.
Couple this statistic with recent research that points to the popularity of eGift cards, and merchants need to start paying attention to this commonly overlooked fraud scheme. Survey research done by CardCash, a gift card retailer, highlights that 73% of surveyed consumers plan to purchase a gift card during the holiday season. In addition, the same survey highlights that eGift cards sales are expected to reach $14 billion in 2017.
On one hand, this adds up to a very profitable time for merchants, but on the flipside, it heightens the need for merchant attention to eGift card fraud. It’s critical that merchants do not overlook the hidden impacts and costs of eGift card fraud.
The Costs of eGift Card Fraud
Merchants should remember these eGift card fraud costs when planning for a successful holiday sales season:

  • Chargebacks. Every dollar lost through chargebacks can cost merchants up to $2.82 in lost time, merchandise, and fees/penalties. These chargebacks can result in higher processing fees and risk of enrollment in credit card chargeback monitoring programs.
  • Stolen merchandise. Innocent customers purchase fraudulent eGift cards and then use them to legitimately purchase merchandise. This is, in effect, stolen merchandise for which the merchant has no salvage method.
  • Resource and time costs. Without the right solutions in place, merchants must spend time and resources on manual review of eGift card purchases, and in dealing with customer complaints from innocent victims.
  • Brand reputation. Brand image and reputation is absolutely critical, particularly in the crowded CNP marketplace. Merchants whose customers are innocent victims of eGift card fraud are at high risk of brand damage and customer loyalty issues.

These costs cannot be ignored – think of the busy holiday sales season and how much success depends on these sales numbers. For customers who have been innocent victims of eGift card fraud, there is a reluctance to return to an honest merchant. For merchants who have been burned in the past by eGift card fraud, there is unease with selling eGift cards that can result in a higher decline rate of honest customers.
How eGift Card Fraud Happens
The extra twist to eGift card fraud is within the secondary marketplaces for eGift cards. These secondary marketplaces allow customers to buy eGift cards from a wide range of merchants, and for customers to sell their unwanted eGift cards. Hackers love these websites and make them a primary target during the busy eGift card season.
Using data from these secondary marketplaces and other fraud tactics allows fraudsters to turn eGift cards into lucrative money-making schemes.

  • Secondary marketplace theft. Fraudsters use stolen credit card details to purchase eGift cards. These eGift cards are then resold on secondary marketplace websites to innocent shoppers. This is the multiple whammy effect of eGift card fraud that makes it so costly for merchants. Credit card holders are defrauded, shoppers are defrauded, merchants are defrauded, and the eGift card recipient is defrauded.
  • System overload. The holiday sales season means merchant websites and apps can be overloaded with traffic. This makes it easy for fraudsters to expose system vulnerabilities and to slip through the cracks. Fraudsters wait for busy sales periods to attack merchant websites – often never being detected.
  • Card testing. This is a common tactic that is particularly effective for eGift card fraud. Fraudsters buy stolen credit card details on the Dark Web and then test these details with small eGift card purchases. The cumulative costs of these small purchases add up when a merchant is repeatedly attacked.

Along with awareness of these specialized eGift card fraud tactics, merchants need to be ready for common fraud tactics, including phishing, account takeover, database hacking, brute force attacks, device switching, and bot attacks.
Winning the Holiday Sales Season
Merchants should not stop selling eGift cards out of fear of fraud and chargebacks. Also, be guarded about becoming overly rigid with your approval and authorization of eGift card purchases. You’ll end up losing customers to your competitors, or worse, to secondary marketplaces which can result in even more risk to you.
The smart approach to protecting yourself and your customers from eGift card fraud is with a multi-layered fraud detection and prevention strategy. Just as the criminals use multiple tactics to steal from you, you need to use multiple tactics to stop and prevent this theft.
This cannot be left to chance or to next year. If anything, we want you to understand how prevalent and damaging eGift card fraud can be. Please contact us to learn more about our solutions, such as Global Payment Gateway, and how we can get you ready for the holiday sales season. Don’t delay – the busy sales period is right around the corner.


The busiest time of the year is here, and there is nothing quite like the holiday shopping season for merchants. The boon in sales during November and December is vital for most merchants in logging a successful year in targeted revenue. However, along with the fun and frivolity of the holiday season comes the post-holiday blues.
For merchants, these post-holiday blues come in a frightful little package gift-wrapped as fraud. There is the out-and-out deliberate friendly fraud and the obvious chargeback fraud. And there are the less obvious methods of fraud, including gift card fraud, identity theft, fake e-commerce sites, and more. It’s important for merchants to be prepared for both the volume of sales and the threat of fraud that comes with these sales.
Consider the recent investigations by Digital Shadows that uncovered an online school for fraudsters, and how this can impact merchant holiday fraud numbers. The Digital Shadows investigation revealed that criminals can pay RUB 45,000 ($745 plus $200 for course materials) to attend six-week courses with 20 lectures that provide education on how to commit online fraud and theft. With the prime focus being on how to steal crucial customer credit card data.
This simply speaks to the need for merchant vigilance at this time of the year. Take the time to learn how fraudsters win during the holiday season and what merchants can do to protect themselves, while still ensuring that the valid sales and customers are supported.
How Fraud Happens
A recent survey conducted by ACI Worldwide, which reviewed millions of global transactions during the 2015-2016 holiday shopping season (Thanksgiving through December 31), reinforces the need for merchant attention.
Most importantly, merchants should remember these two key survey findings when preparing for the holiday sales season:

  • In 2016, 1 in every 97 transactions was a fraud attempt
  • In2015, 1 in every 109 transactions was a fraud attempt

It will take time for the 2017 fraud attempt statistics to be revealed, and in the meantime it’s in a merchant’s best interests to make sure they’re not part of this statistic. Merchants, don’t let the fraudsters win with these holiday fraud tactics:

  • Buy online and pick up in store. Because merchants are acting quickly to fulfill an in-store pick-up, there is little time for order and customer review. This allows fraudsters to sneak through the authorization process with stolen credit card details.
  • Package tracking phishing. Fraudsters use package tracking alert phishing emails that trick customers into clicking a tracking link, which redirects the alert information to the fraudster. The fraudster then arrives just in time to scoop the package from the front door without the customer knowing of the delivery or theft.
  • Fake e-commerce stores. Fraudsters create fake e-commerce stores on legitimate sales sites, such as Amazon or eBay. When a customer purchases a product from the fake store, the fraudsters steal this credit card data (including the person’s correct mailing address, phone number, and email address). This information is then sold on the Dark Web or used to make fraudulent purchases from legitimate CNP merchants.
  • Account takeover. This tactic preys on the customer’s lack of attention to credit card activity. Customers lose track of how and where they’ve used their credit cards during the holidays, making it easy for fraudsters to make purchases that get noticed too late to be stopped.

The holiday sales season is the ideal melting pot of chaos: merchants and customer service team members are over-stretched, the IT team is trying to keep overly busy servers from crashing, and the new temporary holiday staff haven’t been sufficiently trained. Altogether, these factors make it easy for criminals to slip through the cracks and exploit flaws in websites, databases, payment solutions, and authentication/authorization processes.
Stopping Holiday Fraud
These kinds of fraud can have many painful impacts on merchants – lost merchandise, loss of customer trust, jeopardized database, threat of chargeback fraud, and the legitimate chargeback from the duped customer.
Merchants must take advantage of the best in fraud detection and prevention technology to stop holiday fraud. A multi-layered approach is one of the best ways merchants can be ready to defend against fraud attacks.
Make sure your e-commerce solution is taking advantage of technologies such as geolocation, biometric analysis, AVS, IP and device intelligence, 3D secure, and merchant co-op access.
The Extra Steps Count
Sometimes it’s the small changes that make the biggest differences when it comes to stopping chargeback fraud from happening. Merchants should look to their websites for errors and room for improvement. For example, update your return/refund policy for the holiday season and verify all product descriptions. And don’t forget to remind your customer service team members to be extra-attentive this holiday season.
Remember, Verifi is on your side and we want to see an end to the holiday fraud season. Please contact us to learn more about Order Insight and how it can give you the extra edge this holiday season.

For many merchants, the chargeback process is overwhelming, exhausting, and simply impossible to understand.
However, this doesn’t need to be your reality. In this article, we dig into the chargeback process, looking at who is involved, how the process works, and some thoughts on how to improve the chargeback process. At the end of this article, we’ve put together a list of chargeback resources that we urge you to read.
The Chargeback Process: The Players
Knowing who is involved in the chargeback process is integral in understanding why we need to work together to improve the chargeback process.

  • The Cardholder vs. The Customer. The cardholder is the person who is specifically associated with the credit card by the card-issuer and is responsible for the card use. The customer is the person who used the credit card to make a purchase – this can be the cardholder, a family member, or a thief.
  • The Merchant. The business or person who sells products or services to the cardholder. The merchant is responsible for following the guidelines provided to them by the credit cards they support. Merchants are responsible for providing a secure website or mobile sales channel that supports secure authorization and processing for the cardholder.
  • The Issuing Bank. Makes association-branded credit cards available to their customers – the cardholder. The issuing bank is distinct from the credit card company.
  • The Acquiring Bank. Enforces credit card company regulations and is the link between the merchant and the credit card company. The acquiring bank enables merchants to accept payments, issues refunds, establishes merchant credit, and holds merchants accountable to regulation compliance.
  • The Credit Card Company. The credit card company allows the issuing bank to brand and provide their credit card to cardholders. Additionally, the credit card company through the acquiring bank, allows merchants to accept their card as a payment method. The credit card company has clear best practices and chargebacks regulations that merchants must adhere to.

The list of five below are connected by a tenuous, blurry line – the chargeback process. We want to put an end to the blurriness and provide you with a clear and easy way to connect and communicate with everyone involved in chargebacks.
The Chargeback Process: How It Works
Chargebacks developed out of the need to provide cardholders with protection against credit card fraud and theft. Over the years, this has been taken advantage of by fraudsters and often inadvertently by honest cardholders.
The easy option for cardholders is to click Dispute Transaction for any charge they don’t recognize on their credit card statement. This starts the chargeback process, and once it’s started it’s very hard for the merchant to communicate directly with the cardholder.
The best option for cardholders is to contact the merchant to enquire about the charge, ask about a refund or return, or a service subscription cancellation. Doing this allows the merchant to solve the cardholder’s problems and to continue to build a strong relationship with the cardholder.
Instead the cardholder takes the obvious and easy option and starts the chargeback process.

  1. The cardholder clicks Dispute Transaction and fills out the accompanying form detailing the issue.
  2. The issuing bank receives and reviews the dispute. Typically, the issuing bank automatically refunds the cardholder and then debits the merchant.
  3. The acquiring bank is notified and begins reviewing the chargeback.
  4. The merchant is notified by the acquiring bank of the chargeback dispute. The merchant has a limited amount of time to dispute this claim.
  5. The merchant chooses to proceed with chargeback representment or accept the chargeback claim. Often, merchants decide not to pursue representment due to lack of time, understanding, or access to compelling evidence.

In the event the merchant proceeds with chargeback representment and wins, the refund given to the cardholder is reversed and the merchant is refunded. However, the merchant is still out-of-pocket for the costs of representment, the time and resources spent working with the acquiring bank to solve the problem, and recovering tangential costs lost to the chargeback.
As you can see, the easy option is definitely not the best option – not for any of the five involved. Instead, we want to see the blurry lines of the chargeback process fixed with clear and open communication. By giving cardholders a chance to click Contact Merchant instead of Dispute Transaction, the problem can be solved quickly and with minimal time and cost.
The goal is to redirect the chargeback process from the issuing bank to the merchant, allowing merchants to resolve cardholder problems before they become chargebacks.
Learning More About the Chargeback Process
Use this list of articles, whitepapers, and other resources to learn more about the chargeback process. Do browse our Resource Center and Knowledge Base to continue your learning.

You can contact us to discuss your chargeback protection options and to ask any questions you have.


Debit card fraud is real and it’s going on all the time. While EMV technology and consumer preference of credit cards over their debit cards is contributing to lower fraud numbers, the reality is that debit card fraud is still a real threat.
With a focus on digital security threats, hacking, and credit card security, it’s actually easier now for debit card fraudsters to slip through the cracks unnoticed. Customers have become nonchalant about how they protect their PIN and handle their debit cards in general, making them ripe for savvy fraudsters.
For merchants, this debit card fraud is often committed in their brick-and-mortar stores or online without them ever knowing about it. Often, it takes a customer noticing a drop in their bank account statement before the fraud is noticed, and by that time the fraudster may have moved on to another merchant.
Debit Card Fraud Damage to Merchants
While most merchants don’t list the threat of debit card fraud high on their list of concerns, it’s important to not overlook the potential effects of this fraud. The damaging impacts of debit card fraud may at first appear minimal; however, the trickle-down effects can be just as much of a detriment as that of credit card fraud or a database security hack.
Consider this scenario and its lasting impacts:

  •  Customer pays for a purchase in-store at their local bookstore with their debit card.
  •  A few days later, the customer notices unexpected withdrawals from their bank account. The last known use of their debit card was at the local bookstore.
  •  The customer contacts their bank to alert them to the problem. In the meantime, more bookstore customers are reporting similar bank account discrepancies.
  •  The local bookstore owner notices a drop in sales and is alerted to negative posts and reviews online.
  •  Finally, the local bookstore owner is contacted by the police and alerted to the debit card fraud. The source of the fraud is traced to an illegal PIN terminal and is suspected to be part of an organized crime set-up and a temporary employee hired during the busy holiday season.
  •  The local bookstore owner struggles to rebound from the debit card fraud.

So, yes, debit card fraud is a real and present threat. Just as with chargeback fraud and online payment fraud, the more that merchants and customers understand how debit card fraud is committed, the better.
Debit Card Fraud: Need to Know
When it comes to preventing debit card fraud, merchants should follow the advice and tips typically provided to customers about fraud awareness. Knowing how debit card fraud is committed helps reinforce why it’s important to remain vigilant and limit risk.
Merchants and their customers need to know the facts on how easily debit card fraud occurs.

  • Beware of free public Wi-Fi. Hackers can use key logging software to capture online banking details, debit card information including the PIN, and customer details on open and unsecured networks. Merchants should only provide password-enabled Wi-Fi, and remember to regularly change the password.
  • Phishing emails. Merchants can become unknown victims of debit card fraud when fraudsters use a stolen customer database to email customers, mimicking the merchant. Often, these emails ask customers to update their digital details or to provide their PIN for verification. While it appears obvious that this is dishonest, because the email is such a good copy of the merchant, many customers do provide the requested information.
  • PIN theft. Because many customers are not concerned about debit card fraud, they fail to pay attention to who is standing behind them in line. Spying and then distraction that causes the customer to forget or drop their card or opens them to wallet theft is one of the most popular methods of debit card fraud. Merchants must remind customers to give one another space when in line and be aware of any suspicious behavior.
  • Fake PIN terminals. The merchant and customer believe the PIN terminal to valid and secure. When in reality, this terminal is fake and rather than transmitting details to the bank, it is copying the customer’s card and PIN. This information is then sold on the Dark Web to fraudsters who use it to create fake debit cards.

These examples highlight why it’s important that merchants stop neglecting the lingering threats of debit card fraud. For CNP merchants, debit card fraud is still a threat – many customers have debit cards that support online purchases. For CNP merchants who accept such payments, they must have the payment solution security in place to secure these transactions.
Preventing Debit Card Fraud
Just as the case with most fraud prevention recommendations, there is no one-size fits all approach to preventing debit card fraud. However, merchants should use chip-activated terminals to protect themselves and their customers. Most debit cards are chip-enabled, allowing customers to tap or hover their card or smartwatch for secure token-protected payment.
In addition, merchants must comply with all recommendations provided to them by their terminal provider. This includes updating to the latest version, securely stowing the terminal when the store is closed, and being aware of any suspicious problems with the terminal.
Having the right solutions in place to secure customer data and fraud risk are key in ensuring that you do not become a victim of fraud. Knowing the risk factors and having a solution in place that allows for easy communication with your customers when fraud is suspected goes a long way to ensuring good customer relationships and limiting fraud risk.

Many companies would like you to believe that chargeback management is a complicated and onerous process. We’re not like other companies. We want you to know what we know about chargeback management so you can make smart, informed decisions about protecting your revenue.
Feel confident knowing that you have the knowledge to make informed decisions about best practices for chargeback management. This article takes the confusion and mystery out of chargebacks and gives you the information, access to tools and technology, and expert advice to detect, prevent, and respond to chargebacks.
Chargeback Management First Steps
It’s important that you don’t just accept chargebacks as a cost of doing business. Chargebacks often indicate that there are ways you can improve your business and customer communication processes.
A proactive response to a chargeback allows you to respond quickly and make adjustments that can prevent future chargebacks from happening. Use the following plan as a guideline when formulating your own chargeback response plan.

  1. Why was the chargeback filed? Review the reason code and chargeback notification details. Collect as many details as you can about the disputed transaction.
  2. Is this a valid chargeback? Is this a case of fraud, or is it a valid customer complaint? Knowing this is key in deciding whether to accept or dispute the chargeback.
  3. Review your customer service. Look for ways you can prevent future chargebacks. Often, merchants overlook key details such as billing descriptors, email confirmations, clear refund/return policy, and customer information management.
  4. Get expert help. You may not be an expert in chargebacks, so you can’t be expected to solve this problem alone. Rely on a team of chargeback experts to review your sales and payment processes to identify any areas for improvement.

Whatever you do, don’t ignore the chargeback and pretend it didn’t happen. Get the answers to these questions so you can make an informed decision about your next steps.
Merchants should remember to review the documentation provided to them by their issuer. Each major credit card company has detailed guidelines and best practices to help you prevent and manage chargebacks.

For example, Visa recommends in their Chargeback Management Guidelines for Visa Merchants, that merchants do the following to monitor chargebacks:

  • Track chargebacks based on reason codes
  • Track chargeback activity as part of the overall sales
  • Track card-present and card-not-present chargeback data separately

Having a solution in place that allows for the monitoring and tracking of customer data, sales statistics measurement, and which supports chargeback representment can take the stress and worry out of chargeback management.
Understanding the Chargeback Representment Process
The chargeback representment process allows merchants to dispute invalid chargebacks. To do so effectively, you must provide evidence that clearly proves the transaction was completed properly and was approved by the cardholder.
The evidence required for a successful chargeback representment case is based on the chargeback reason code. In general, however, merchants are expected to submit a chargeback rebuttal letter that summarizes the evidence proving the transaction is valid. Typically, you must provide evidence that shows the cardholder approved the transaction, your refund/return policy, a description of the product or service from your website, and tracking numbers to prove the item was delivered.
To help you succeed in your chargeback representment, do the following:

  • Respond quickly
  • Know the chargeback representment process rules
  • Collect compelling evidence
  • Know the specific reason code
  • Review customer data
  • Ask for help

You can win a chargeback representment case; however, it’s much easier and more cost-effective to do so when you rely on expert solutions and advice. Having the right solutions in place that make it easy to collect compelling evidence and to understand your customers can make the difference between representment success or failure. 
Learning More About Chargeback Management
We’ve put together a short list of resources that can help you learn more about chargeback management. Please contact us with any questions about chargeback prevention solutions, chargeback representment, and best practices for chargeback management.

Browse the entire Verifi website to learn more about chargebacks.


For many people, their understanding of class action lawsuits comes from movies. The victories of the small-town community that rallied together under the fearless advice of their lawyer is both inspirational and encouraging.
However, no one in the payments industry wants to be involved in a class action lawsuit – issuers, merchants, or customers. The cost, stress, and unpredictable outcome can often be more troublesome than the basis for the lawsuit. Successful or not, class action lawsuits change how issuers, merchants, and customers interact and communicate.
Many believe that the threat of a class action lawsuit on behalf of consumers against card-issuing banks is the only right to protection customers have against big banks. While arbitration is always an option, some believe that class action lawsuits are more powerful and effective.
A recent Congressional ruling has turned the tables on how customers can settle disputes with issuing banks. This October 2017 ruling has removed the right of customers to file class action lawsuits against issuers – meaning that customers may be left with arbitration as their only form of recourse in settling a transaction dispute to their satisfaction.
While there are pros and cons to both sides of this decision, one thing is clear: this ruling does not solve the problems plaguing the payments industry. The chargeback process continues to be a remedy for consumers and merchants in need of improvement and updates.
Arbitration for the Issuer, Merchant, and Customer 
It’s important to take a high-level look at how the ruling against class action lawsuits really does impact issuers, merchants, and customers. The reality is that no party involved in payments wins with this ruling.
For issuers, while the threat of costly class action lawsuits is no longer a threat, the costs of arbitration cannot be overlooked. Although arbitration may lead to faster settlements and less of a long-term drain, issuers must still deal with arbitration costs and resource demands.
For merchants, now that customers have lost their right to file lawsuit disputes against issuers, the threat of secondary chargebacks might be heightened. Secondary chargebacks are often a forgotten threat for many merchants, who incorrectly assume that once a chargeback is resolved that the issue is closed.
For consumers, the right to file a class action lawsuit against a bank was one that provided them a wider avenue of choice in resolving transaction disputes. With this right dismissed, customers may be forced to rely on arbitration as their sole recourse for protection and recovery – typically resulting in much lower settlements.
When thrown in a pot and brought to a boil, the collective impacts of the Congressional ruling mean that everyone in payments may be subject to entering an antagonistic relationship. Customers, more than ever, are now more likely to turn to chargebacks. Merchants are at the mercy of increased chargeback threats and the fees that come with chargebacks. Issuers are left with an even greater tarnished public image, making it hard to ensure customer loyalty.
The obvious solution to this is communication and collaboration. Open collaboration between issuers, merchants, and customers can mitigate the chargeback problems plaguing the payments industry.
The Broken Chargeback Process
The chargeback process could be better. In fact, it could be a lot better – all it takes is getting the right people talking and working together. This, as merchants and issuers know, is easier said than done.
No one wants to be involved in a chargeback: the customer simply wants their problem fixed, the merchant wants to help the customer, and the issuer wants to support the customer, ensuring a good experience.  With merchant-customer communication and issuer-merchant collaboration, the pain points of the chargeback process can be eliminated:

  • Cardholder confusion. The cardholder doesn’t recognize a charge or doesn’t know who to contact with their problem. Their only recourse is to initiate a chargeback with their issuer.
  • Issuer lacks knowledge. The issuer doesn’t know the customer’s history or the real reason for the chargeback. The issuer has no way to easily identify fraud.
  • Merchant is left out. The merchant learns of the chargeback only when it’s too late to solve the problem with the customer. Now the chargeback process has started and it can’t be stopped.

Verifi’s Cardholder Dispute Resolution Network (CDRN) was designed with collaboration and communication as the focus. With this payment solution, Verifi is able to offer merchants, issues, and customers the support and communication avenues they need to solve their problems outside of the chargeback process.
Doing so restores the trust and understanding among everyone involved, and provides an opportunity to better prevent future chargeback and fraud risks. Rather than pitting the customer against the merchant and issuer, or the merchant against the issuer, solutions such as CDRN work to solve the broken chargeback process and improve customer experience.

A hover of the smartwatch and the payment is done. A quick tap on the mobile app and the purchase is authorized. An instant sync and customer loyalty points are up-to-date and ready to use. Digital gift cards, plane tickets, passports, and access keys….
This is mobile wallet technology in action. What started as an early-adopter technology in 2015 has boomed into the de facto payment and e-commerce standard. Customers crave the simplicity and convenience. Merchants appreciate how easy it is for customers to pay without ever tapping on a keyboard.
Mobile wallets are here to stay. Now is the time to learn the facts on mobile wallets and get ready for the next big wave in omnichannel payments.
What is a mobile wallet?
A mobile wallet allows customers to make purchases without ever taking their credit or debit card out of their physical wallet. Using an app on their smartphone, tablet, or smartwatch, customers have the freedom to pay in digital form.
To make in-store purchases, customers hover their smart device over the payment terminal and the payment is authenticated and authorized. Customers can make in-app purchases without entering their payment details. Additionally, customers can receive brand and store offers and loyalty points directly to their digital devices.
Customers are drawn to mobile wallets for one primary reason: convenience. The key for merchants is in delivering on this convenience when customers are ready to pay. This means supporting a wide range of mobile wallet options and paying attention to customer demand for mobile wallet options.
Some of the most popular mobile wallets include: PayPal, Apple Pay, Samsung Pay, and Android Pay. However, merchants are wise to pay attention to mobile wallet trends and monitor which mobile wallets are rising in popularity.
It’s important to remember that mobile wallets also include: digital coupons, gift cards, digital tickets (for events or transportation), identity cards such as digital passports, and digital access keys for buildings and homes.
How can merchants leverage use of mobile wallets?
Merchants who support mobile wallets are able to position themselves strongly in the m-commerce and CNP markets. Customers want seamless, frictionless payment options – this is easily delivered with mobile wallet provider support.
Along with providing customers the ease-of-use they want, overall fraud risk is reduced with the inherent technologies within mobile wallets. This all adds up to big pluses for customers who have to choose between a merchant who does accept mobile wallet payment and one that doesn’t – ease-of-use and security are huge factors in decision-making.
One of the best ways that merchants can take advantage of the benefits of mobile wallets is by providing a consistent omnichannel m-commerce experience. By providing an app and website that has the same look-and-feel, customers automatically feel comfortable with the payment process.
Merchants would be wise to take advantage of the built-in convenience this payment technology provides them – allowing them to easily connect mobile wallets, apps, digital gift cards, and loyalty programs. This allows customers to take advantage of smart device payment options, and enables them continue to benefit from merchant loyalty programs and sales.
The easier it is for your customers to spend their money in your store (brick-and-mortar or digital), the more money yours customers will spend. Customers have come to experience a note of inconvenience when getting to the final checkout step and discovering that the merchant does not accept their preferred payment method.
Merchants should remember the value of having a payment gateway that allows you to leverage customer insights and additional engagement opportunities that can lead to long-term revenue increases.
What should merchants do to prevent mobile wallet fraud?
Mobile wallet technology is inherently more secure than other payment options. This security comes from the built-in tokenization that supports instant authorization and authentication in milliseconds.
Tokenization replaces sensitive account and card information with a non-sensitive token or placeholder. This token is used as an identifier during the payment process. This token can only be traced back to the original account or card data with a master key as part of the tokenization system.
These tokens are created by a Token Service and are issued to the customer’s device by the Token Issuance process. This keeps the entire tokenization process secure and impossible to reverse engineer.
Tokenization is used to secure mobile wallet and m-commerce payments and to secure Tap & Go payments, in-app purchases, and in-app virtual purchases.
While tokenization does not guarantee merchants will be protected from security breaches, it does guarantee that vital customer data is protected in the event of security breach.
It is still important that merchants implement a multi-layered fraud protection solution that provides them extended protection that tokenization cannot provide. Contact us to learn more about device authentication, 2-factor authentication, and geolocation.
How can I learn more about mobile wallets?
For many merchants, mobile wallets technology can seem overwhelming, but the good news is that the benefits to mobile wallets outweigh the barrier to entry. Use the following Verifi resources to learn more about mobile wallets:

Browse the Resources section to learn more about mobile wallets, fraud prevention, and omnichannel sales.