Merchant Credit Card Check

It is important for acquirers to review their merchant contracts to make sure that they have properly indicated the potential risks and liabilities of maintaining cardholder data because there are plenty of Internet hackers who are up to gaining access to databases containing card data. This poses one of the biggest fraud threats. More specifically, contracts should point out that merchants are responsible for the security of the cardholder information that is in their possession.

Merchants reserve the right to ensure that they are doing business with a legitimate cardholder. They have the right to verify the cardholder's signature to make sure that it corresponds with the name embossed on the card. If it does not, merchants can request another credit card or some form of identification as a way to protect themselves.

Merchants can call up the customer by the name on the card. If no response is received from the cardholder, the merchant should ask for another credit card or additional identification. Merchants can request an authorization number by calling the code number provided by their ISO in order to validate the sale. This automated system guides merchants through the code call by asking them to enter the customer's card number and the transaction information.

Merchant acquirers may also want to provide fraud prevention services to their merchants, such as address verification, which matches a cardholder’s street address information with the bank before shipping the merchandise. If the two doesn’t match, the merchant can discuss the matter with the customer and resolve the issue before shipping out products. Merchants who have access to these types of services should take full advantage of them to protect themselves to the fullest. Using common sense and obtaining extra information from the customer can go a long way toward reducing charge backs and protecting the merchant, the ISO and the acquiring bank.

Merchant acquirers, of course, should also feel free to call the merchant to verify any transaction. Merchants often do not understand that the transaction authorization code verifies only that a cardholder has funds available for that particular inquiry. The transaction authorization code does not guarantee that security work has been done to confirm the sale with the legal cardholder. Merchant acquirers can protect themselves by requiring invoices or shipping documents to verify that a charge is legitimate.

Merchants should be encouraged to check out the security features on every credit card, including holograms that change color in the light and non-erasable signature lines. They should also be encouraged to call the ISO with any concerns regarding transactions that seem out of the ordinary.