FEATURED ARTICLE

Thieves Combat High Security
by Going Low Tech

As regulations and security tightens on electronic credit card processing networks, it has become increasingly difficult for hackers to penetrate processing networks. The solution for thieves is to go completely low-tech. The tools of the trick: X-Acto knife and glue. While it might not be the simplest way to commit an identity theft, card shaving is on the rise.

Shaving is a low-tech form of card theft where thieves sort through series of 16-digit numbers to find one that matches an existing card. The card number is verified by making a purchase online or by phone. A list of valid card numbers can also be purchased on-line through black market sites. Once they have obtained a valid account number, they then create a new card with those numbers by shaving the numbers off of gift cards or expired credit cards and gluing them onto a defunct or stolen card. The magnetic strip is gouged with a knife or pen so that a store clerk has to manually enter the account number on a keypad, and the charge goes through.

Scammers approach businesses during a busy time where clerks are often too harried to pay much attention to the fact that the card looks suspicious and verification systems are so outdated that they don't require a matching ZIP code or other personal data.

If a thief is successful, months can pass before a cardholder discovers the charges. Even those skilled in financial matters are at risk. Because the card has not left the card holders possession charges are only discovered when viewing financial statements.

Merchants are the first line of defense against these fraudulent charges. Merchants should physically inspect all cards to minimize the incidents of counterfeit cards being used. Manually typing the card number in when there is even a hint of suspicion is risky. Any charges made would most likely be disputed forcing the merchant to absorb the loss through a chargeback. Merchants can take further steps to prevent these fraudulent charges with an ID and signature check or getting the bank on the phone. For on-line or phone transactions merchants should ask for security code on the card.

The second line of defense is the cardholder. Card holders should check balances and statements on a regular basis and report any suspicious charges.

PRODUCT SPOTLIGHT

Gift Cards – The #1 gift
during the holiday season

During the holidays or for that special occasion many shoppers find it hard to find just the right gift. That's why so many businesses now offer gift cards. The benefits of the gift card for businesses are that gift cards attract new customers and boost sales all year long. On average most recipients spend 25% more than the amount of the card. Gift cards can be customized. With gift cards business owners can receive a daily report of all cards processed, check the outstanding balances of all gift cards issued and allow gift card holders to check card balances via the telephone.

2008 Gift Card Deadlines

TECH TIP

Authorize.Net System Notice

In October 2008 Authorize.Net will launch changes to their payment gateway to meet the demand of the growing number of merchants using their payment gateway. Authorize.Net is expanding the range of Transaction IDs that the payment gateway can issue.

Authorize.Net enables merchants to authorize, settle and manage credit card and electronic check transactions via Web sites, retail stores, mail order/telephone order (MOTO) call centers and mobile devices.

Authorize.Net merchants need to verify that their systems can accommodate a 10 digit Transaction ID greater than 2,147,483,647. The Authorize.Net Transaction ID is a unique, sequential, numeric value that the payment gateway assigns to every transaction. The Transaction ID can be found in the transaction response. It can also be found using the Search and Reports features of the Merchant Interface.

Merchants that may be affected are those that are currently using or storing the Transaction ID field, or x_trans_id, in any of their own databases or systems and if the data type they are using is not compatible with larger values. Merchants should coordinate with their developer or technical team to ensure that the Transaction ID data type will support these larger values. Failure to accommodate the 10 digit values larger than 2,147,483,647 will result in the merchants system's inability to accept Authoriz.Net transactions.

Authorize.Net does not have access to the technical specifications that will determine whether or not the merchants integration will be impacted by the expansion of the maximum Transaction ID values. As such, their customer support department will be unable to make this determination for the merchants. It is critical that merchants contact the developer, shopping cart or other solutions provider that integrated their Web site or application to the payment gateway, to verify their specific situation.