Credit card technology has advanced significantly since the days where a retailer can swipe a customer’s card into an imprint system and hand them a carbon copy of the receipt. Every advancement in credit card technology, from the magnetic stripe to the EMV (or “chip”) card, has made transactions safer and more accessible.
Dynamic CVV cards are the most recent credit card variation. Although supporters say that dynamic CVVs are much more reliable than EMV cards, it is unclear if this new credit card technology lives up to the hype.
Although “static” card verification value (CVV) cards, which have a three or four digit CVV number imprinted on the card, have been a mainstay of fraud prevention for years, dynamic CVV cards have a randomly created collection of CVV numbers that change automatically after a fixed period of time. The aim is to make stolen credentials redundant in a short period of time, making it difficult (if not impossible) for fraudsters to compromise the cards.
Several issuers, including Bank of America and Société Générale, are optimistic about the technology and are actively beta testing this new card functionality. Dynamic CVV, on the other hand, might not be the ideal solution. What merchants need to know about this new technology is outlined below.
The Benefits of Using Dynamic CVV Cards
E-commerce may benefit from dynamic CVV shop technology in a variety of ways.
CNP Fraud Must Be Reduced
Since the CVV code changes so rapidly when a cybercriminal attempts to make an online payment using a dynamic CVV card, the CVV code would have already modified, and the bank would reject the fraudulent transaction.
CNP fraud among his customers using digital CVV cards is almost non-existent, according to Julien Claudon, Société Générale’s head of card and digital services.
Merchants don’t have to do any extra work.
To accept payment through dynamic CVV cards, merchants will not need to implement any new procedures, with the exception of possibly educating their customers, especially those who have memorized their CVVs.
Revenue Opportunities Increased
Credit card issuers can benefit from dynamic CVV cards because they boost their bottom line. Although the cards themselves are costly to produce, and there will be a cost to enforce them among the issuer’s consumer base, the lower price of CNP fraud will more than offset these costs. Chargeback processing takes less time, resources, and effort when there is less fraud.
The cards can also produce revenue on their own. Customers of Société Générale, for example, pay a monthly subscription fee for dynamic cards, which helps to cover their expense. Add to that the improved reputation of the card issuer in the market: after implementing the technology, Société Générale saw a 5 percent rise in new customers.
Drawbacks of Dynamic CVV Cards
Even if dynamic CVV technology reduces fraud, it does not guarantee that it would be inexpensive or straightforward to implement. Here are some of the main roadblocks to applying dynamic CVV technology, according to some experts.
The Cost of Dynamic CVV Cards
Although a non-chip card will set you back around 39 cents and a chip card will set you back around $3, a credit card with dynamic CVV shop features will set you back as much as $15. This means that reissuing costs, including replacement cards and case review, can be as high as $40.
Swindlers Dynamic CVVs are seen as a challenge.
Finding ways to circumvent anti-fraud initiatives like the dynamic CVV card is a personal challenge for fraudsters. While this solution may initially minimize fraud, cybercriminals are resourceful enough to find a way to circumvent this security function.
The Risk of Friction Increasing
Customers may find it more challenging to enter the correct CVV number into their online shopping cart until the number changes as a result of this new technology. This could lead to further false declines and a new layer of friction, causing more shoppers to abandon their shopping carts.
Many customers have even memorized all of their credit card details, including the CVV, so they can place online orders even if their card isn’t in front of them. Customers might lose convenience if dynamic CVVs were used, and merchants could lose a profit.
Billing on a recurring basis can become problematic.
Dynamic CVV cards can cause issues for merchants (and customers) who depend on recurring billing. Merchants may need to contact consumers each time a transaction has to be processed to obtain updated billing details, which may cause confusion on both sides and result in missed sales.
While multiple issuers are currently beta testing this technology, it is still uncertain how dynamic CVV shop cards can affect a merchant’s bottom line. Time will say whether this is an additional security layer or a costly, easily hacked payment option.
Bottom line
E-commerce retailers must be aware of this and other developments that will alter the way they did business in 2020 and beyond. Are you interested in learning about other emerging trends that will help online retailers meet their customers’ growing demands for personalization, convenience, and security? Go to Cvv shop to learn to use these innovations to grow your company in the coming year. Then, if you have any concerns or want to talk about your fraud prevention strategy, just contact one of our experts!
Credit card technology has advanced significantly since the days where a retailer can swipe a customer’s card into an imprint system and hand them a carbon copy of the receipt. Every advancement in credit card technology, from the magnetic stripe to the EMV (or “chip”) card, has made transactions safer and more accessible.
Dynamic CVV cards are the most recent credit card variation. Although supporters say that dynamic CVVs are much more reliable than EMV cards, it is unclear if this new credit card technology lives up to the hype.
Although “static” card verification value (CVV) cards, which have a three or four digit CVV number imprinted on the card, have been a mainstay of fraud prevention for years, dynamic CVV cards have a randomly created collection of CVV numbers that change automatically after a fixed period of time. The aim is to make stolen credentials redundant in a short period of time, making it difficult (if not impossible) for fraudsters to compromise the cards.
Several issuers, including Bank of America and Société Générale, are optimistic about the technology and are actively beta testing this new card functionality. Dynamic CVV, on the other hand, might not be the ideal solution. What merchants need to know about this new technology is outlined below.
The Benefits of Using Dynamic CVV Cards
E-commerce may benefit from dynamic CVV shop technology in a variety of ways.
CNP Fraud Must Be Reduced
Since the CVV code changes so rapidly when a cybercriminal attempts to make an online payment using a dynamic CVV card, the CVV code would have already modified, and the bank would reject the fraudulent transaction.
CNP fraud among his customers using digital CVV cards is almost non-existent, according to Julien Claudon, Société Générale’s head of card and digital services.
Merchants don’t have to do any extra work.
To accept payment through dynamic CVV cards, merchants will not need to implement any new procedures, with the exception of possibly educating their customers, especially those who have memorized their CVVs.
Revenue Opportunities Increased
Credit card issuers can benefit from dynamic CVV cards because they boost their bottom line. Although the cards themselves are costly to produce, and there will be a cost to enforce them among the issuer’s consumer base, the lower price of CNP fraud will more than offset these costs. Chargeback processing takes less time, resources, and effort when there is less fraud.
The cards can also produce revenue on their own. Customers of Société Générale, for example, pay a monthly subscription fee for dynamic cards, which helps to cover their expense. Add to that the improved reputation of the card issuer in the market: after implementing the technology, Société Générale saw a 5 percent rise in new customers.
Drawbacks of Dynamic CVV Cards
Even if dynamic CVV technology reduces fraud, it does not guarantee that it would be inexpensive or straightforward to implement. Here are some of the main roadblocks to applying dynamic CVV technology, according to some experts.
The Cost of Dynamic CVV Cards
Although a non-chip card will set you back around 39 cents and a chip card will set you back around $3, a credit card with dynamic CVV shop features will set you back as much as $15. This means that reissuing costs, including replacement cards and case review, can be as high as $40.
Swindlers Dynamic CVVs are seen as a challenge.
Finding ways to circumvent anti-fraud initiatives like the dynamic CVV card is a personal challenge for fraudsters. While this solution may initially minimize fraud, cybercriminals are resourceful enough to find a way to circumvent this security function.
The Risk of Friction Increasing
Customers may find it more challenging to enter the correct CVV number into their online shopping cart until the number changes as a result of this new technology. This could lead to further false declines and a new layer of friction, causing more shoppers to abandon their shopping carts.
Many customers have even memorized all of their credit card details, including the CVV, so they can place online orders even if their card isn’t in front of them. Customers might lose convenience if dynamic CVVs were used, and merchants could lose a profit.
Billing on a recurring basis can become problematic.
Dynamic CVV cards can cause issues for merchants (and customers) who depend on recurring billing. Merchants may need to contact consumers each time a transaction has to be processed to obtain updated billing details, which may cause confusion on both sides and result in missed sales.
While multiple issuers are currently beta testing this technology, it is still uncertain how dynamic CVV shop cards can affect a merchant’s bottom line. Time will say whether this is an additional security layer or a costly, easily hacked payment option.
Bottom line
E-commerce retailers must be aware of this and other developments that will alter the way they did business in 2020 and beyond. Are you interested in learning about other emerging trends that will help online retailers meet their customers’ growing demands for personalization, convenience, and security? Go to Cvv shop to learn to use these innovations to grow your company in the coming year. Then, if you have any concerns or want to talk about your fraud prevention strategy, just contact one of our experts!
