10th November 2020

Fraud Alphabet Soup: CNP, MCCs and OTAs

Fraudulent card use blogpost

One of the ways we protect merchants and cardholders from payments fraud is by blocking virtual card payments to the MCCs most often linked to fraudulent CNP transactions. Here’s how we do it (and what those acronyms mean!)

There are two common types of card payment fraud: card-present fraud (someone steals and uses a physical card) and card-not-present fraud (someone steals card details and uses them without physically presenting a card). Card-not-present (CNP) fraud is by far the more common of the two, and in 2019 in the UK alone it accounted for £470.2 million in transactions, affecting both cardholders as well as merchants.

On the supplier side, the travel industry is more exposed than most to CNP fraud. This is not surprising when you consider that online travel agencies (OTAs) accept the majority of their payments online by card. For cardholders, while chargebacks can sometimes help cardholders to dispute and reverse fraudulent transactions, payment fraud costs both time and money.

Most CNP transactions don’t have traditional security mechanisms like chip and PIN, and the ability to verify a cardholder’s identity with photo identification or biometrics is not yet widely adopted. This means virtual card platforms like Ixaris Payments must take extra precautions to protect cardholders, and merchants, from fraud. And we pride ourselves on going above and beyond in keeping your money secure.

One of the ways we help our customers, both in travel and beyond, fight fraud is by blocking virtual card payments to the types of merchants most likely to be associated with fraudulent CNP transactions. Here’s how we do it.

Every merchant in the world is classified under a Merchant Category Code (MCC): a four-digit number listed in ICO 18245. MCC’s can be assigned by merchant type (MCC 5411 - Supermarkets) or merchant name (MCC 3773 - The Venetian Hotel and Casino). By automatically blocking virtual card transactions related to specific MCC’s like casinos, pawnshops and money order companies, Ixaris Payments provides customers with an extra layer of protection against fraud.

A number of other fraud-fighting features and tools are baked into the Ixaris Payments platform. We believe it’s neither practical nor secure to share a single corporate card between departments and team members. With Ixaris Payments, you can create an unlimited number of disposable virtual cards on demand. By using one card per transaction or merchant, you can significantly minimise your risk of fraud. You can event set Ixaris virtual cards to be automatically emptied and destroyed after a single-use, or freeze/thaw cards on demand.

As long as there are payments, there will be payments fraud. But we’ll never stop fighting it.

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