Do these authentication methods protect merchants with recurring billing?
Currenlty the programs do not apply to recurring billing. Visa anounced at the MRC conference this year that VbV will be aplicable to recurring billing at sometime this year, but they have yet to provide any additional information since then.
that’s exactly what happened to me more than once. I ended up paying by cc on sites that would allow it. I know of a two vendors who used verifiedbyvisa but they changed after they almost went broke. great idea and everything but in reality its pretty useless. i am right now looking at gateways myself to set up cc payments for subscription and i want to make sure my business is not crippled with vbv so i’ll get one that will not block someone trying to pay by credit card if they haven’t gone through all the motions of registering for it.
but the hole thing about fraud and charge backs is pretty scary.
I have the following questions:
We run a donation website and we accept donations online.
Our acquiring bank is Unibanka, is it located at Latvia. Our Acquiring Bank and Payment Gateway both support 3D-Secure.
Could you tell me please, if the customer makes a donation on our website with a 3D-Secure authentication, will he be able to make a chargeback on this transaction? Also, how the geolocation of customer can change the things in chargeback rights? I mean, if the customer from US, can he make the chargeback on his Visa 3D-Secure authenticated transaction? And what about if the customer located at Europe or UK?
Thanks for your replies in advance!
Alex
- Could you tell me please, if the customer makes a donation on our website with a 3D-Secure authentication, will he be able to make a chargeback on this transaction?
-Yes he will, but his bank will assume liability and not you the merchant.
2)Also, how the geolocation of customer can change the things in chargeback rights?
-No.
3)I mean, if the customer from US, can he make the chargeback on his Visa 3D-Secure authenticated transaction? And what about if the customer located at Europe or UK?
-Location is not an issue. These are international programs and so is the coverage.
Thanks for your reply.
So, please, clarify me the following:
For example, we have received 100 transactions from customers, which donated their money to our charity and 2 of them went to bank and began the charge-back procedure. I understood, that if the transaction went with a 3D-Secure, our acquiring bank shifts the liability to issuing bank, but will these chargebacks be calculated into our total chargebacl ratio? Will it meen, that we will have a chargeback ratio of 2% even if all donations came to us with 3D-Secure?
Thank you for your answer in advance !
Alex
You really need to ask your acquirer that question, but from what we understand merchants who participate in these programs come under a different distinction than a regular merchant.
If a merchant’s chargeback rate explodes after participating in these programs then its a direct indiciation that they may be abusing the benefits of the service by blatantly accepting fraudulent transactions.
Thanks for your reply! But how chargeback rate could explode?If cardholder
disputes the transaction with a reason code marked as “fraud transaction or cardholder couldn’t recognize the transaction” - the issuing bank simply will be unable to make a dispute with this reason code, as the transaction passed the 3d-secure authentication and issuer cant initiate a dispute process on this. Please, tell me if i am wrong? I am looking forward for your reply. Thanks in advance!
And another question:
If the cardholder makes a chargeback with a reason code marked as " Didn’t receive goods", how can we dispute this chargeback? Is it enough to provide our acquiring bank with an invoice and shipment reference with a Tradking ID number?The bank could simply enter the tracking number on a Courier’s website and verify, that the cardholder had signed the receipt and that the goods were delivered. Please, clarify this also 
Verified by Visa: In the US merchants are granted what’s called chargeback blocking on all Visa transactions from US cardholders. If a US cardholder initiates a chargeback for fraud or “not recognized” the trasnaction will be blocked at the issuer. International transactions that are chargedback for fraud or “not recognized” must be represented to the acquirer for reversal.
These chargebacks are usually winnable.
Thanks for your reply, but if the acquiring bank is located in Germany and merchant process payments of US cardholders? Will the chargeback be blocked at issuing bank?
Winnable by merchants or cardholders?
no
merchants
Hi,
I found the sitepoint forum during some google inquiries about “3D secure authentication” as I am wondering if 3DS will become mandatory in the near future. I am asking this from a merchants perspective. As far as I know some clearing providers in the UK (like ePDQ and ProtX) are forcing their customers to implement 3DS in course of the conversion from Switch/Solo Cards to Maestro.
Does anybody of you have more information about that issue available? That would really, really be appriciated.
Thx in advance,
MaBa
There is no indication that this will be mandatory any time soon or ever at all. Now if a processing banks wants all of their merchants to use it they certainly can do that if they want to. But Visa and MasterCard are not going to make it mandatory.
MasterCard has made SecureCode mandatory for all Maestro/Switch/Solo cards. Processors and Acquirers must have certain percentages of their portfolio up and running by the end of the year. In 2008 you will not be able to authorize a Maestro/Switch/Solo card without SecureCode.
MasterCard has also mandated issuer participation. Issuers who do not implement SecureCode and begin enrolling cardholders are subject to fines. MasterCard is the only association that is issuing mandates at this point.
Thank you very much for your help and the information which is really usefull for me.
An interesting thread and some good information I’ve not been able to find elsewhere - particularly from my payment gateway provider Protx in the UK.
The way Protx have put this across to us over the past few months is that you must have 3-D Secure in place or else certain cards won’t be accepted. Now that the deadlines have passed and we haven’t implemented it all our sites are still happily taking all cards. To be fair to Protx, I’m not sure the banks/card issuers have been consistent with the information they have given them. I even heard from one source that Protx simply don’t know what’s happening with this.
The main reason we haven’t set up 3-D Secure is we see a lot of development time to do it. You then think “well, we don’t have to do it” and “cardholders aren’t signed up anyway - so will we lose out through abandoned sales?” and there just seems little point. Obviously shift of liability is a factor but we don’t suffer many chargebacks anyway. [Please note: I’m simplifying things massively in this paragraph]
I personally have Switch, Mastercard, Visa and Visa Debit cards with several banks for business and personal accounts. Not one of these banks has ever contacted me as a customer to try to get me to sign up to 3-D Secure. Perhaps this will change and they’ll start trying to ‘sell’ it?