Chargeback Changes for CVV2 Mismatch

Change in Visa Chargeback rules in case of a CVV2 mismatch

Effective April 14, 2018, Visa card issuers are no longer able to chargeback a transaction if the original authorization was approved but included a CVV2 mismatch response. Let’s look at this in simple terms and understand its implications on merchants and issuer banks.

The CVV2 or Card Verification Value is a 3 digit number located at the back of a Visa card and is separate from the main credit card number itself. It is a secure number that protects merchants from fraudulent transactions in card-not-present situations, including over the phone (MOTO) or online. It serves as proof of possession of the card by the customer, especially since Visa strictly prohibits merchants from storing CVV2 numbers as a part of the customer’s data.

CVV2 numbers come into play when the customer first enters their credit card details. The issuer bank verifies the card details and ensures the customer’s account has the amount needed to make the purchase. Once the verification is completed, the issuing bank ‘authorizes’ the transaction.

Next, the authorization (along with the CVV2 code) are sent to the payment gateway. At this point, the CVV2 code entered by the customer is “matched” with the correct CVV2 code and a response is generated.

These are the response codes:

M – If the codes match

N – No match

P – Not processed; the code was not validated.

S – Should be on card but not indicated; customer left the field blank

U – Issuer does not participate in the CVV2 program

The payment is captured by the gateway if the codes match.

Now, imagine a situation in which the customer complains they have been billed for a transaction that wasn’t done by them. The merchant checks their records and notices that the same transaction was declined at their end. This essentially means that the transaction was ‘authorized’ by the issuer bank but was ultimately declined once there was a CVV2 code mismatch.

Regardless, a chargeback is issued to the merchant. The merchant then looks at the response code to determine whether the customer was in possession of the card for this transaction. If the response received is ‘N’ or a ‘No match’, the merchant seeks protection from the chargeback.

With the new rules implemented by Visa, the issuer can no longer issue a chargeback to the merchant in a situation where the payment has been authorised but the CVV2 code has mismatched.

Key takeaway: As a result, this change will likely lead to an increase in the number of authorization rejections when the CVV2 provided is incorrect, as issuers will take more measures to protect themselves.

If you’re a merchant, please be reminded that the CVV2 should always be used as part of your fraud prevention measures for one-time, card-not-present transactions and continue to capture the correct CVV2 to help ensure that the used card is in the cardholder’s possession.

 

Learn more about Payscout’s e-commerce solutions and how we help keep our merchants safe and secure: www.payscout.com/eCommerce

 

 

 

Register for VRLA – in Virtual Reality

Payscout has partnered with VRLA, the world’s largest immersive and transformative technology expo, to create a VR registration app that enables users to register for the event – and pay for their tickets – in virtual reality.

The VRLA registration app is available now through April 30 on the Google Play app store. Download the app today!

The experience is worth having whether you’re attending VRLA or not, but if you’re planning to attend and have not yet registered… this is your chance to make history.

Here are a few simple steps to complete your registration.

What do you need?

An Android mobile device and VR cardboard glasses

Step 1:

Find the ‘Payscout VRLA Registration 2018’ app on Google Play store and download it.

Step 2:

Fill in basic registration details on your app.

Step 3:

Log into your existing Visa Checkout account or create a new one (don’t worry – this doesn’t take much time at all!)

Step 4:

Once you have confirmed your registration, the app will prompt you to switch to VR. At this point, place your phone in your cardboard VR headset.

Step 5:

Turn on the volume, sit back, and enjoy the short video clip.

Step 6:

Next, you’ll be transported to outer space. Everything is different when there’s no gravity. Do you have what it takes to avoid the obstacles and make it to the VRLA registration booth?

Step 7:

Phew! That asteroid almost got you, but at least you made it to the VRLA registration booth! Now, pick the pass that best suits your needs (your head movement guides the cursor!) and select your option. Pssst.. there’s a special discount on the two-day pass for avoiding that asteroid like a boss!

Step 8:

Follow the instructions on the screen and complete your transaction by selecting the Visa Checkout button. You’ll receive a confirmation of your registration in 1-2 business days. What’s more, use your confirmation mail to score a free t-shirt at the Payscout booth at VRLA!

Hope you had fun registering in virtual reality! We’ll see you in the real world at VRLA on May 4-5!

Live from TRANSACT: Sionic Mobile and Payscout Announce Strategic Alliance

Today at TRANSACT, Payscout and Sionic Mobile, a leading provider of cloud-based connected commerce and loyalty currency gateway services, announced they have entered into a strategic alliance to provide enhanced mobile payments and loyalty solution helping merchants connect with and more effectively engage millions of consumers nationwide through their favorite mobile app.

Book time to learn more about this mobile payments and loyalty solution!

Sionic Mobile’s award-winning ION Commerce Engine® (ICE) and Mobile Rewards Marketplace® will supplement Payscout’s innovative payment products, including Virtual Reality (VR) Commerce, a finalist for the Electronic Transactions Association (ETA) Star Award, “Technology Innovation of the Year,” which will be awarded during TRANSACT.

“Through the Sionic Mobile partner alliance, merchants will be able to quickly and easily deploy a sophisticated mobile strategy,” said Payscout’s Co-Founder and President, Manpreet Singh. “Building consumer loyalty in today’s increasingly competitive market is crucial to the future success of merchants. The Marketplace not only enables the convenience of mobile payments, but also delivers an exceptional end-user experience that attracts new customers, while encouraging repeat business.”

Yahoo! Finance: Sionic Mobile and Payscout Announce Strategic Alliance

Ronald Herman, CEO and founder of Sionic Mobile, said, “Like Payscout, we are focused on providing innovative, yet intuitive commerce solutions that simplify and streamline the payments process, while providing a richer customer experience. Through this integration, Payscout’s merchants will be able to quickly and easily reach millions of consumers through an app already on their mobile device, providing innovative services to merchants of all sizes with little to no upfront investment.”

 

VR Commerce: Technology Innovation of the Year Finalist

Payscout’s Virtual Reality (VR) Commerce solution is a finalist for the Technology Innovation of the Year award from the Electronic Transactions Association (ETA). The award winner will be announced at ETA’s TRANSACT 2018 in Las Vegas, Nevada. 

The ETA Star Awards honor individuals and companies that have made a significant difference in the payments industry through innovation, business practices, or contributions to the association.

In June 2017, Payscout became the first company in the world to integrate frictionless payments tied to the fulfillment of physical goods in virtual reality.

Bloomberg TV: Juan Sotelo, Payscout COO, says VR will change retail.

VR Commerce enables the user to have an immersive, emotional 360-degree experience before being transported to a virtual store where they can interact with products and make a frictionless payment without having to remove their headset. 

If you’re attending TRANSACT, you can experience this ground-breaking technology in a one-on-one demo and learn more about Payscout’s global suite of innovative payment processing solutions. 

Click here to book a meeting for a one-on-one VR commerce demo at TRANSACT!