How to Detect CNP Fraud in this fast-changing technology scenario?

Following are some of the ways to deal with CNP frauds.

3D Secure

This form of security is being used by many banks, but the leaders are MasterCard’s Secure Code and Visa’s Verified by Visa. This refers to the model which consists of: the merchant, the bank and the technology being used for the communication between the acquirer and issuer domains.

This system provides enhanced security during the checkout. The service makes use of a plug-in system to recognize the cards from participating banks and when it is able to find it, it asks the customer to verify the identity by entering the pre-set password.

Now this makes it difficult for the fraudster to do the fraud as he needs to know this information to charge the card. Moreover, the bank can figure if the user is using proxy while the pop-up window is being opened.

The reason this technology is not so popular and has even faced a lot of criticism is due to the inconvenience of creating passwords every time the customer just wants to buy stuff, an easy way to change forgotten passwords, violation of the user’s privacy as it allows third parties to see the transactions and many more.

CAP/DPA

MasterCard’s Chip Authentication Program (CAP) and Visa’s Dynamic Passcode Authentication (DPA) programs are a way to enhance security of the 3D system. CAP/DPA is fundamentally EMV for the online transactions where card is not present.

The idea behind this security system is that the banks will issue its customers a hand-held EMV terminal called a CAP reader which will ask the customer to use their chip card and pin to prove their identity. This will be followed by generation of one-use password by the reader.

Earlier this was being designed only for banking but now this may be used in conjunction with 3D secure pop-up service.

But the problem is that there are no chip-and-PIN cards in use in America which means there are no means to verify the identity of the user. But the main purpose is to combine EMV technology to CNP transactions to curb fraud online.