Fraud within the Visa system has fallen to a historically low level of only five cents per $100 transacted, even while Visa's card transaction volume has grown dramatically. Protecting merchants, cardholders and financial institutions from payment card fraud is our highest priority at Visa. That's why we have invested millions of dollars in state-of-the-art anti-fraud technologies, products and services, including Visa's neural networks, Advanced Authorization, and the Verified by Visa program to protect cardholders online. These multiple layers of security are the primary reason why fraud on the Visa system stands at an all-time low.

In fact, Visa commits over $300 million annually to develop new fraud fighting technologies and services. But Visa can't do this alone. Merchants have an equal responsibility and incentive to protect the payment system they derive so much benefit from. Recent well publicized data compromises underscore the consequences of not protecting cardholder data — eroding customer trust and potentially resulting in significant financial losses. Visa data suggests that card issuing financial institutions shoulder the vast majority of fraud losses.

Visa Helps Merchants Fight Fraud

• Visa fraud protections start right on the front of the card and extend all the way through our back-end processing systems.
• On the card face itself, Visa has deployed a number of anti-fraud measures designed to make card reproduction extremely difficult. This includes the "Flying Dove" hologram, the ultra-sensitive dove that is visible when the card is placed under ultraviolet light, and the "Flying V" embossed security character.
• On the back of the card, the signature panel and magnetic stripe are designed to ensure that the person using the card is the true cardholder, and that the transaction is routed correctly to their account.
• In face-to-face transactions, merchants are not liable for fraud when the transaction is properly authenticated. This represents the vast majority of Visa transactions.
• Merchants are only liable for fraud in cases where the card is not present at the point of purchase, such as over the phone, in the mail, or on the Internet. In those cases, Visa has developed multiple tools to reduce Merchant exposure to fraud:
• Visa developed Verified by Visa, a cardholder authentication service, to help online merchants reduce, if not eliminate, their fraud exposure on Visa cards. Similar to face-to-face transactions, participating merchants who install Verified by Visa are not liable for fraudulent transactions, and those costs are born by the card issuing bank.
• CVV2, the three-digit code printed on the signature panel, helps internet merchants verify their customers have the actual card in their possession. As part of our future efforts to enhance Visa card design, Visa will move the CVV2 code off the signature panel and embed it in the plastic, making it easier for cardholders to read the code when making Internet, mail or phone purchases.
• Visa supports Address Verification Service, a fraud prevention system that allows merchants to compare the billing address of the purchaser with the billing address on file with the card issuing financial institution.
• Visa has cut merchant and acquirer fraud losses by more than $540 million through our Resolve Online (ROL) technology which streamlines the chargeback process.
• Visa led the effort to create an industry-wide data security standard called the Payment Card Industry data security requirements (PCI). These standards were developed to help merchants understand the basic, but necessary steps they should take to ensure cardholder data is secure.
• Visa invests in educating merchants about how to protect themselves against fraud. A dedicated team of professionals educates acquirers and merchants on best practices related to fraud awareness and prevention. Visa developed and distributed over 600,000 various informational pamphlets on fraud, security, chargebacks and other acceptance-related topics to merchants and acquirers last year. These activities, coupled with the content we offer on our website, are designed to serve as a resource for merchants seeking additional guidance on managing fraud.
• Visa Advanced Authorization gives all Visa cardholders, merchants and financial institutions powerful, new fraud protection that is estimated to prevent $164 million in fraud losses over the next five years.

What Merchants Should Do To Reduce Fraud Losses

• At the point of sale, the merchant has responsibility for checking over the physical aspects of the card, including the embossed account number, the cardholder name and expiration date and customer signature. In addition, other anti-fraud measures that merchants should check include the Flying Dove hologram, the ultra-sensitive dove that is visible when the card is placed under ultraviolet light, and the "Flying V" embossed security character.
• Merchants should contact their acquiring financial institution and/or processor to better determine what additional services could be deployed to reduce fraud and manage chargebacks. From Verified by Visa to CVV2, merchants have sophisticated technologies at their disposal to reduce fraud losses.
• Review the PCI data security requirements at www.visa.com/cisp and begin immediately the process of ensuring cardholder information is protected.
• Log on to www.visa.com/merchants to learn more.