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Increase Your Revenue by Better Protecting Your Organization from Card-Not-Present (CNP) Fraud

Lawrence Minetree / Associate Vice President of Associations, Payments & Expansion

Business Technology
What is Card-Not-Present Fraud?

Card-Not-Present (CNP) fraud is the unauthorized use of one’s credit or debit card without a merchant verifying that a physical card is present during the transaction. More of your members, supporters, volunteers – everyone – are making more online purchases than two years ago. The pros of purchasing online are many, but there are often inherent risks for that convenience. Organizations, financial institutions, and consumers have experienced an obvious uptick in Card-Not-Present (CNP) fraud cases worldwide. That is why it is more important than ever to weigh the widely known benefits of investing in an e-commerce solution against the often-unknown risks with online transactions.

How CNP Fraud Impacts Your Organization

Nonprofit organizations and associations are especially vulnerable to CNP fraud because membership records are repositories of critical data, including names, addresses, and payment details.

Whether collecting donations, membership dues, or conference registrations, associations and nonprofits are entrusted with significant financial and social responsibilities, which is appealing to bad actors.  As e-commerce transactions continue to accelerate, these bad actors continue to find clever ways to commit fraud: database hacking, email, and text phishing, and even phone scams to access customers’ personal identifying information (PII). The cost of better protecting your organization from bad actors attempting CNP fraud will deliver dollars to the bottom line. As it stands today, many merchants are on the hook for CNP fraud when directly disputing transactions with Visa, Mastercard, and Amex. Consequently, organizations can incur substantial fees and charges for chargebacks related to fraudulent transactions. And while nonprofit organizations and associations face the same security risks as for-profit organizations, they generally trail for-profit organizations when securing personal identifying information, detecting fraud, and adopting enhanced security measures, that ultimately, improve payment processing rates – simply by being proactively anti-fraud.

How to Increase Authorization and Processing Rates by Adopting Enhanced Security Measures

Fortunately, with advancements in payments technology, nonprofits and associations have more products and features available to better secure their online transactions. Best Practice: Enable Address Verification Service (AVS) on your Fonteva Business Group.

Implementing AVS allows your organization to validate the billing details of the associated CNP transaction with customers’ banking institution. Organizations can then use the address to accept or decline the transaction based on a complete or partial match. By validating additional information to confirm the authenticity of the purchase, payment processors will charge less to process that transaction. Organizations can further reduce processing costs by enabling CVV upon checkout – a big improvement over identifying all the fire hydrants on your screen! Best Practice: Enable CVV on checkout.

Another hot security enhancement in the payments space is the global push to upgrade to 3DSV2 technology. An upgrade from its 3DSV1 predecessor, which introduced the multi-factored authentication we all love, 3DS2 is a security standard that allows organizations to meet updated U.S. regulations and the requirements of Europe’s Strong Customer Authentication (SCA) by reducing fraud through additional layers of authentication. The main difference between 3DSV2 and 3DSV1 is the introduction of more frictionless authentication and a better user experience across devices. Leveraging 3DS will substantially help your organization to: 

  • Better safeguard your members against fraud 
  • Improve the online experience for your members across all devices
  • Decrease checkout times, cart abandonment, and improve conversion
  • Leverage additional metadata for deeper insights into online transactions

This multi-layered enhancement to 3DSV2 improves the pipeline efficiency between online merchants, payment networks, and financial institutions, empowering all parties to share and analyze critical data points to quickly authorize a transaction more easily.  

The more data organizations can provide on online transactions through instituting AVS, CVV, and adopting 3DSV2, the better you can protect both your members and your revenue.

Boost Revenue by Diversifying Payment Checkout Options

Although the existing gaps in today’s regulatory environment continue to push the development of new payments technology, processing costs for merchants are continuing to rise. In addition to staying informed of the latest security risks and requirements, nonprofits and associations should consider implementing new technology that provides members with secure transactions wherever they are in the world. After evaluating your current payment types, consider developing a payments acceptance strategy that can meet rapidly evolving expectations and reduce your overall processing costs. By diversifying the payment checkout options, organizations can increase payouts and reduce costs with payment types such as ACH and SEPA Direct Debit, which ensures all banking information must be verified and authorized before the transaction can be processed, guaranteeing your funds. Mandating the verification of banking info prior to authorizing the transaction, not only guarantees the funds, but the transaction is processed at a lower rate because of the enhanced security and validation measures in place. Best Practice: If ACH is not part of your payment checkout options today, then it is certainly something to consider – it’s a win/win for both your members and your organization.

Make Better Business Decisions with An Embedded Payments Solution

Legacy payment processors are, and have been, connected to so many systems, but not necessarily in ways that improve your business. Integrating with things like a third-party system for invoice payments and reconciliation may “work,” but they are still scratching the surface of what is possible – they lack embedded functionality, transactional transparency, and valuable insights in a unified UI.

Now is the right time to evaluate a 360-degree payments solution that is strategically invested in your organization’s success and continuously enhances security and functionality based on customer feedback, new technology, and shifting industry regulations.

Fonteva Payments is the only end-to-end, embedded payments solution for nonprofits and associations that protects revenue, secures member data, and drives your payments acceptance strategy directly from your CRM.

Contact us to learn more about the Fonteva Payments Roadmap and how Fonteva Payments is providing your organization with critical insights into your revenue and your members.

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