The Power of Dynamic CVV against Credit Card Fraud

Sep 09, 2016

Fraud is the biggest threat to the credit card payment industry. Credit card related fraud comes in various forms:

  • Outright physical card theft and Impersonation
  • Hacking
  • Forgery

In every case, the criminals always seem to be a few steps ahead of those who fight to eradicate fraud. They tend to use the same technology used to fight them to steal card data. They then use even more enhanced approaches to hack into information databases to get hold of card user information.

Some antifraud efforts have been more successful than others. Among the more successful antifraud measures in the contactless payment world is the use of Dynamic CVV codes.

Understanding the CVV technology

Card Verification Value, CVV is a 3- 4 digit number on a credit or debit card. It is often used for identification purposes in addition to the card’s embossed number on point of sale (POS) devices. The POS scanning device checks the encoded numbers within the card’s magnetic stripe, while the card verification value or CVV becomes particularly useful for Internet or telephone-based transactions where the user cannot swipe the card on a POS device to be read.

A user can often relay the card’s 3 to 4-digit CVV2 or CVC2 code printed on the back, in the card’s signature panel for the required identification. Notice that this method has allowed room for increased cases of card-not-present fraud.

So, with Near Field Communication (NFC) payments, major card brands have initiated the dynamic CVV as a measures to reduce the risk of fraud and sustain better consumer confidence in this new burgeoning payment technology.

How dynamic CVV technology works

The big brands that include Visa and MasterCard build dynamic CVV codes into the contactless cards. This security measure basically attaches a unique algorithm to a card. This way, a new security code is created after each contactless transaction.

Whoever obtains the card can therefore not use it for any kind of sham contactless transaction since it would be impossible for him or her to determine the card’s unique algorithm – the ever shifting security codes.

These dynamic CVVs however have no help against traditional point of sale transactions. If your business relies on a traditional POS and not an NFC technology then you may want to consider opening a high risk merchant account with a high risk ecommerce processing solutions provider like EMB.

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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