Verified by Visa is a new type of credit card fraud detection system that helps to reduce the risks of online credit card fraud significantly. It is being used all over the world today. Why? Because it offers merchants another layer of security when processing credit card payments online. This can mean the difference between paying out less in fraudulent charges or receiving the proceeds from sales with no problem at all.
There are two main versions of VUL, the first is the global versions. The international version is more comprehensive than the national one because it requires all merchants and institutions processing credit card details to comply with the rules of Visa. The other major difference is in the collection of identity information. The national version requires only the business itself to collect and keep the required information, which is not needed by merchants and institutions that process credit card details. This is why VUL is often more effective than the national option when it comes to identifying fraudulent transactions and identifying identity thieves.
One problem that merchants face is that they may not have the right processes in place in order to verify a cardholder's identity before approving a credit or debit card for online transactions. They may also not have the right infrastructure in place in order to verify cardholders. Either way, it makes it a challenge for merchants and online processors alike to determine whether the cardholder is authorized to make the purchase in question. VUL has solutions for both issues. The following sections describe how VUL works and what to do if your processing company does not implement VUL for all of its cardholders.
When a transaction is verified by Visa, the VUL system will provide additional security to the customer. It does this by flagging any unauthorized transactions that were made. When an unauthorized transaction is made, the system will notify the cardholder and the bank, which may decide to investigate the matter further or let the cardholder continue with the purchase. The additional security provided by VUL is referred to as “Extended Validation” or eValidation. The system flags authorization failure as inaccurate or incomplete, so that the customer can dispute the transaction before the cardholder's card is authorized for use. In addition, eValidation can determine whether there are any other factors that might cause the transaction to fail such as insufficient funds or an incorrect PIN.
This is the second part of VUL and is essentially the same as version 1. The primary difference between version 2.0 and version 1.0 is that merchants will be able to choose between using eValidation or using the more traditional authentication method, which is done with the traditional Visa or MasterCard that is embedded in the plastic card. With version 2.0, merchants are also able to choose between using short-term or long-term authentication, although the system will always use the most secure method that was determined by Visa or MasterCard.
The next step is for a customer to validate the card information being used for the purchase with a Verified by Visa or MasterCard machine. In essence, this step verifies that the customer has indeed authorized the purchase. The customer will need to enter their credit card details on the screen, which will then be sent to a secure server for processing. Once processed, this information is converted into an encryption code, which is transferred to a destination payment processor such as PayPal or MoneyBooker, and then the transaction is completed.
As mentioned previously, VUL technology helps prevent fraudulent transactions, by flagging unauthorized transactions and allowing the financial institutions to investigate the matter. If an online merchant is using VUL for all of their transactions, they are required to acquire an International Verification System (IVS) PIN. These PINs are issued by the international banks that the online merchant uses to process credit card payments. It is important for e-commerce merchants to always carry a copy of the IVS PIN when processing any card payments, so that if a customer is unable to provide their authentic banking information after the sale, they can report the fraudulent activity to the appropriate authorities.
Currently, the most popular VUL verification method used by online merchants is the VASA format, which is also known as the Verified by Visa and MasterCard format. This format requires two-step authentication, as it requires the use of an International Verification System (IVS) PIN that must be provided by the customer during the shopping process. This option is considered more secure than the previous versions, but not as robust when it comes to preventing unauthorized online purchases.