Recently we posted a blog about a days-long search to find any good news regarding the war on fraud in internet credit card processing and protecting one’s personal data. We found a few positive things –how consumers and merchants are more aware than ever, how counterfeiting is down, and how incidents and monetary losses have decreased in certain verticals.
We found news about how 19 different fraud detection and prevention tools – customer histories, negative lists, verification address checks – were increasingly being used. Additionally, we had previously written about how several issuing banks are in the testing stages of offering credit cards with dynamic CVV codes, though it could be 18 months to two years away.
Not that we expected any good news that was earth-shattering, but it was honestly one of the most difficult pieces we’ve endured because, considering the current climate, good news about credit card fraud is rather sparse.
Alas, we may have blogged too soon. MasterCard released a significant news item in mid-October how it hopes to arm every credit card on the planet with tokenization services. That was very welcome news as tokenization is regarded as one of the best fraud prevention tools in play today.
What is tokenization and how does it work with internet credit card processing?
The very theory of tokens, to use in place of something that has value, is ideal for the payments industry, where masking and/or securing sensitive information is absolutely vital. In terms of internet credit card processing, MasterCard’s use of tokens will enable consumers to store their credit card information with online retailers without exposing the sensitive details such as the 16-digit number, CVV code and other valuable data associated like passwords and e-mail addresses.
An additional benefit from MasterCard
Does this sound familiar?
A bill, for which you have arranged for automatic payments or a subscription, arrives in the mail claiming it was unable to process last month’s payment. Perhaps it’s the electric or gas provider, highway tolls or a magazine subscription. The snafu is usually an expired credit card that the consumer forgot to update with whatever service provider.
This is where MasterCard’s other added benefit comes in: the automatic updating of credit card details that change in the events of card expiration or cards lost and stolen, saving forgetful consumers that step.
Looking forward: how will this impact internet credit card processing?
We’re just thinking a few years in advance here…or allowing our collective imagination to run amok (maybe both), and there are two things we’re curious about.
- Will cyber thieves react and counter? Securing credit card information from hackers and other cyber thieves has been a contest of reaction and ‘one-upsmanship.’ The good guys find a solution to foil the bad actors, who then find ways to work around the solution. If there is one thing we believe about hackers and cyber thieves, they are very much students of their craft. Will they find a way to bypass tokenization by 2020?
- Impact on high risk businesses: We’re also curious as to what impact MasterCard’s strategy will have on high risk businesses. MasterCard has claimed that tokenization will improve authentication as well as negate chargebacks, instances of false positives and shopping cart abandonment – all great and welcome qualities. There are several industries that are high risk directly because of chargeback frequency. Were very, very curious to see if acquiring and issuing banks will feel increasingly comfortable dealing with high risk industries as a result of tokenization.
Internet credit card processing: Security is (desperately) needed
As Instabill is a provider of internet credit card processing services, we care deeply about our merchant partners’ ability to offer secure payment services such as tokenization, encryption and 3D secure (which is a far more consumer-friendly tool than its inception), to maintain customer confidence.
Instabill is partnered with banks and other high risk industry pros which offer fraud detection and mitigation and chargeback prevention. We’re also big on one-on-one conversation about your internet credit card processing needs, and encourage prospective merchants to contact us about the possibilities.
We’re available Monday through Friday, 8 a.m. until 6 p.m. (US eastern time) at 1-800-530-2444.