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Frequently Asked Questions
How widespread is online credit card fraud?Internet credit card fraud is a growing concern, although it is normally underestimated. Statistics from the National Consumers League's Internet Fraud Watch survey show that in 1999, consumers lost over $3.2 million to Internet fraud.
Credit card companies are tracking fraud rates that are up to 50% higher online than with in-person transactions (www.epaynews.com). But merchants are often concerned that reporting fraud incidents will make their site appear unsecured to customers or more accessible to hackers. Additionally, 29% of Internet merchants mentioned the loss of customer goodwill as a significant negative business impact related to fraud (www.epaynews.com).
What types of online merchants are victims to fraud?
While the percentage of fraudulent transactions that a web-store experiences depends on its product categories, brands, site hits, and delivery methods, most online merchants report at least some level of credit card fraud. Sites selling soft goods such as software, music, videos, graphics, games and information are at a higher risk because there is a greater amount of anonymity. Sites that sell soft goods have reported on average an estimated 30 percent of total sales being fraudulent.
What is a chargeback?
A chargeback occurs when a credit card holder "charges back" a given charge on his monthly statement. If the cardholder can show that the charge is bogus, the card issuing bank is legally obligated to credit him the full amount. If the charge is related to an Internet transaction, the internet merchant is responsible for supplying the issuer with 100% of this total cost. Issuing banks charge online merchants a fine for such chargeback. If an online site is the victim of too many chargeback, banks will stop handling the merchant's sales entirely.
Does online credit card fraud differ from physical world fraud?
Yes. The assignment of liability is one of the major differences between the internet and the physical world. For internet transactions, merchants shoulder almost all of the liability related to fraud because internet purchases are classified as "card-not-present" transactions. In person-to-person transactions, as long as the merchant follows the standard rules of checking the customer's signature and verifying codes on the card, the issuing bank is responsible for all chargeback reimbursements to the cardholder. Because card-not-present transactions are anonymous and lack a material card, merchants must supply the issuer with 100% of any chargeback costs.
While the same "card-not-present" rules apply to mail order and telephone order (MOTO) purchases, technological advances allow internet fraud to be perpetrated in ways and at speeds unattainable via MOTO. Furthermore, online transactions require no human interaction, and feature less ways to verify the identity of the customer.
How are Internet merchants affected by credit card fraud?
Online merchants' profitability has fallen victim to credit card fraud in a number of ways, like: Loss of the product, shipping and handling fees, loss of the product price, bank fees and lost work hours spent handling chargeback and false claims. Cash management problems may also arise due to frequent and recurring chargeback. Merchants with high levels of fraud may be charged a higher discount rate by issuing banks, and could face loss of accounts if fraudulent sales exceed the percentage rate of their total monthly revenue.
Can merchants use standard fraud detection systems?
To reduce the risk of fraud, most merchants depend upon credit card authorization and Address Verification Services (AVS). Credit card authorization confirms the validity of the credit card and the availability of funds for payment. AVS ensures that the address/contact information entered by the buyer is the same as the issuing bank's records, and is also available for MOTO purchases. At this point, neither of these two tests measures the true risk of fraud of a transaction. To perform transaction risk management in a successful and efficient way, online merchants need to increase their present security with comprehensive fraud screening systems such as ECS World's. Additionally ECS World has adopted the latest in credit card authentication standards known as Verified By Visa (VBV) and MasterCard SecureCode.
Does a merchant need additional fraud detection and prevention if all orders are already reviewed?
Yes! Using human fraud investigation is both inefficient and tedious. It is also very difficult to guarantee accurate results. To effectively scale and maximize profits, merchants need to automate their order acceptance as much as possible. The ECS World system uses sophisticated algorithms to detect suspicious orders, and gives the online merchant the ability to easily review its results for each transaction.
What does ECS World offer that is unique?
ECS World is a highly scalable fraud prevention solution. It is unique in that it provides a total solution, combining both rules-based expert system modeling and neural network decision systems. Furthermore, the ECS World system can be fully customized based on the demands of specific e-merchant services and products.
What is 3D Secure?
3D Secure (Verify by Visa and MasterCard Secure) is the latest in credit card authentication standards and authentication. 3D Secure method to allow Merchants / Issuers / Acquires and cardholders identify / authenticates themselves in the Internet world for on line card not present payments. 3D Secure is the architecture which allows a merchant to authenticate the Cardholder with the issuer / association.
How can ECS World be customized for a merchant's online business?
The ECS World Rules Engine makes decisions based on a specific set of business and risk management rules unique to the client. All ECS World products come with a basic set of rules, while merchants are given an easy-to-use toolset that enables them to add, remove or modify rules according to their business needs. Additionally, the online merchant can upgrade the basic product with specific scoring services tailored to its business.
How long will it take to open up a merchant account?
Thanks to ECS World's excellent relationship with its global acquirer, it only takes a few working days from the moment the application documentation has been completed and forwarded to the bank to open up a direct merchant account or a third party merchant account.
What credit cards can merchants accept?
Currently all major internationally accepted credit cards may be accepted as well as local debit cards. Merchants with additional enquiries for payment alternatives may approach ECS World.
My business is considered high-risk will ECS World be able to help me in acquiring a merchant account?
Not only will ECS World be able to help you but you will be glad to know that the high risk merchant accounts are our field of expertise. With its state-of-the-art fraud screening technology ECS World has proven experience in reducing a merchant's risk and bringing it down to a minimum level. ECS World considers high-risk accounts an appealing challenge to create a complete set of fraud screening tools which are unique to a merchant's business nature.
Support and Training
Does ECS World provide training and support?
A new merchant receives special training to learn and understand the usage of the ECS World gateway, the fraud technology, including all reporting tools of the risk management. Every merchant is accompanied by an account manager fully dedicated to the merchant in all matters concerning his/her account. Our 24/7 customer care and technical support offers an additional advantage to all our merchants.
What are the working hours of ECS World's customer support department?
Monday-Friday 08:00 - 18:00 GMT