When a shopper uses a card in person, checks can be carried out at the point of sale (for example, with a signature check), and the card scheme rules ordinarily require that the issuer is to bear losses.
With online transactions, there is usually no written evidence that the cardholder used the card or that they received the goods or services. The liability for losses related to online transactions therefore lies with you. Although you might not be able to avoid fraud-related chargebacks completely, you can reduce your losses by adopting appropriate procedures, as described in this guide.
You can also benefit from Liability Shift by enrolling with the cardholder authentication schemes such as Verified by Visa, MasterCard SecureCode for MasterCard and Maestro, and American Express SafeKey. Please contact us to enrol.
If you are enabled for cardholder authentication schemes you can protect your business from certain fraud-related chargebacks on card transactions.
According to Visa, over 80% of all chargebacks fall into fraud-related category. Liability for this type of chargeback passes from the merchant to the card issuer, even if the card issuer is not a participating member of the scheme or if the cardholder is not enrolled.
These authentication schemes are designed to increase confidence in online shopping and to reduce your exposure to fraud. For more information about authentication schemes, please refer to the Cardholder Authentication Guide and Cardholder Authentication.
Note that some card schemes do not support authentication or Chargeback Liability Shift. This means that you are liable for chargebacks, not the card issuer.
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