Basic notes
Online transactions are considered to be "non-face-to-face" (CNP - customer-non- present) transactions. Since there is no way of ascertaining the customer's identification, there is no way to be sure that the customer is the legitimate cardholder. Therefore, financial institutions are leery about the high potential for fraud.
Moreover, the major credit card companies offer their cardholders the right to contest charges on their statements that may be the result of theft, fraud or error. A contested charge is referred to as a chargeback. When a chargeback occurs, the merchant will end up paying the charge to the issuing bank, in addition to a chargeback fee. For example, if you sell a book for $20 through a credit card transaction, and the cardholder later contests the sale, internet shop will end up paying the bank $20 plus a chargeback fee of $10 to $30 dollars.

Basically, face-to-face sales (CP - customer-present) have a chargeback rate of 1% of all sales. When CNP transactions have a chargeback rate of 2% up to 10% depending on how risky is the business of the internet site. The potential for charge backs is greater when it is an online sale, so the risk to both bank and merchant increases.

How to improve it
When it is CP sales, a shop does its outmost to prevent possible fraud by the way of ascertaining the customer's identification if the card matches the cardholder in place. The cashier of the shop has a time to see the credit card and ask the shopper to produce his document identifying his personality.
CNP sales does not give this chance since the shopper non present at the counter. Therefore, even when you check the card you cannot be sure that it is the real cardholder in front of you.
To solve this problema ASSIST applies a special fraud monitoring methods based on many years fraud screening expertise. These methods are applicable for both CP where usually POS-authorization is used and NCP cases. The truth is you will have to replace your old fashioned POS with a new intellectual ASSIST-POS. See more details in ASSIST-Interactive POS section.

Enhanced fraud monitoring
In addition to a standard fraud monitoring offered under the contract with a bank of ASSIST system (as in case of Alfa-bank), enhanced fraud monitoring service is available. The service will be rendered under direct contract with ASSIST Ltd.

The enhanced monitoring will include:

- transactions screening to reveal possible fraud;
- generating the fraud presumption % and informing the shop in Financial Reports account section on ASSIST site;
- notifying the shop by e-mail concerning transactions having fraud presumption %;
- consulting delivered to an internet shop by e-mail. (requests to be sent at monitoring@assist.ru).

Using the enhanced fraud monitoring will allow the shop to make lower the fraud by 1 to 1.5 per cent of internet shop volume.

Each transaction is investigated by twenty parameters plus payment history of the credit card in ASSIST system is considered.

Enhanced fraud monitoring rates*

Average monthly volume (th.RUR) Rates (th.RUR) up to 100 600 between 100 and 200 1100 between 200 and 400 2000 higher than 400 to be agreed

* All rates without VAT.

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Assist®ID
It is considered that one of the most safe transaction protection from fraud is using a pin-code to identify the cardholder by the issuer bank of the card. Same way it is used in ATM. Looks like e-commerce payment using the pin but here the cashier is missing instead of the shopper.
Clear that using the pin will only increase the safety level of transactions.
Assist®ID is not just a code but a 16 digits combination built in a certain way plus 4-digit pin-code. It is presumed that same as in case of ATM transaction the card holder will keep the code in secret. Since the Assist®ID is "bound" to credit card data, you can make payment using Assist®ID and the pin-code, which will cut down the risk of using the stolen credit card number dramatically. Before thecardholder gets his/her Assist®ID and pin-code his/her card is checked at issuer bank and payment history records are checked as well as many other data. This will cut down on fraud risk in case of stolen credit card number or generated numbers.

See more information about Assist®ID here.

One more time about the fraud
The way of fighting with fraud described in section above has nothing to do with cases when a "descent" card holder refuses from transaction he/she done indeed. It happens from time to time in both CP and NCP situations. These cases are treated (and one needs to note that sometimes these guys are lucky) by Economic Crimes Prevention Institutions. The only thing is that in case of offline store it is some way easier (since the slip is printed and signed) and more difficult when it is online store. The truth is Assist®ID will have to cut down on that fraud because using Assist®ID psychologically the shopper will be more responsible when he pays.

The certainty of punishment is the truest security against crimes. --Fisher Ames.

You can get much more information on this issue at Economic Crimes Prevention Institutions. Some of them are here below:

9, Vedernikov, Moscow, 109029
Russia
???. +7 (095) 270 0033

3, Mytninskaja, St.Petersburg
Russia ???. +7 (812) 274-50-17

3D-secure from VISA
One of possible solutions to reduce number of cases when a "descent" cardholder refuses from transaction he/she made in internet is 3D-secure technology presented by VISA (ucaf in case of Europay). To tell the truth, the technology itself does not solve the whole problem. To operate full steam it will have to cover all parties such as cardholders, issuer banks, acquires and merchants. The foundation stone of the technology is that responsibility for chargeback in transaction under 3D-secure standard is shifted from the internet shop to issuer bank which in turn shifts it on card holder since the transaction is supposed to be completed according to 3D-secure standard with the help of secret code shared between the card holder and the issuer bank. See in more detail with www.visa.com.

3D-secure standard is supported by one of ASSIST member banks - Alfa Bank and can be used for online transactions through ASSIST.

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