Battles being won in the anti-fraud card war.

Yesterday the UK Cards Association reported a drop in card fraud losses of 28% in 2009.  Transactions where card holders are not present (phone, internet and mail order) continue to be the main area of losses at 60% of the total, but even this area reduced significantly.

Some retail clients have been wary of 3D-Secure (MasterCard SecureCode and Verified by Visa) believing that business has been lost as card users continue to be nervous of the system. In the last 2 years we have witnessed a marked increased take up, driven both by the opportunity to reduce costs, as most acquirers charge a premium for non-secure transactions, and the desire to reduce the costs and reputational damage resulting from fraud.

So what cost reduction opportunities are there for your organisation? Take a few minutes to look in to the following simple questions and you may just be able to boost your profit margin by cutting your transaction costs:
1. When payments are accepted over the phone or by mail order, do you require the provision and keying of the 3-digit security code (it’s surprising how often we find that staff choose not to key the code).
2. Has the decision on whether to operate 3D-Secure systems on your website been reviewed in the last 12 months?
3. What is the level on ‘non-secure transactions’ on your merchant card statements, and how has this changed in the past 6 months? As with all processes, good practice can slip if not monitored, so a quick check can make sure that you keep this cost on line.

Quite apart from the business expense of sorting out fraud claims and chargebacks, using the systems provided by the acquirers will reduce non-secure transaction fees which we have seen ranging from 10p per transaction to 0.85% of the transaction value. At a time when profit margins are under pressure, these cost saving ideas can be easy to manage and give benefit straight to your profit and loss.