Keeping your credit card safe is vital when making purchases online or in-store. With over 46 percent surge in suspected fraud cases in 2021, the need for credit card authentication is crucial.
While the implementation process may seem difficult, this article will explain the methods of credit card authentication. Let’s jump in!
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What Is Credit Card Authentication?
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Credit card authentication is a security mechanism used during online purchases to validate the user’s legitimacy.
This procedure prevents unauthorized use and fraudulent actions. Typically, authentication entails a two-step verification process: first, entering credit card information, and then giving extra information, such as a one-time code delivered to the cardholder’s registered mobile number or email.
This additional layer of security ensures that only the authorized cardholder may complete a transaction, improving the overall safety and integrity of online credit card transactions.
What is the importance of credit card authentication
Credit card authentication is vital in online purchases for various reasons:
1. Authentication serves as a strong barrier against illegal access, preventing fraudulent transactions.
2. It confirms that the individual using the credit card is the real cardholder, therefore improving total identity verification.
3. It adds an extra layer of protection to online transactions by demanding additional verification procedures, protecting sensitive financial information.
4. Authentication measures inspire trust in customers by assuring them that their transactions are secure and creating trust in online platforms.
5. Many financial mandates require tight security measures, and strong authentication assists businesses in meeting these requirements.
6. It reduces the risk of financial losses for both consumers and enterprises.
4 types of payment authentication
1. Ownership
When making an online or mobile purchase, the cardholder must enter a code sent to their cell phone to authenticate their credit card. In the case of card-present transactions, a receipt signature is considered a form of ownership authentication.
2. Location
Credit card authentication by location matches the card’s address to the proximity of a transaction. The transaction may be refused if a consumer from Singapore uses their credit card in Seattle, Washington. That is why it is critical to alert credit card companies when traveling.
3. Inherence
Inherence credit card authentication uses biometric information to identify clients, such as voice or facial recognition, iris or retinal scans, or fingerprint identification. This highly advanced method of authentication is more efficient and secure than other methods.
4. Knowledge
Credit card authentication by knowledge presumes that the person using the card is knowledgeable about something only that person is aware of. For example, their social security number’s last four digits or their mother’s maiden name.
6 methods of credit card authentication
Securing online transactions entails using multiple methods of authentication to confirm the legitimacy of users. Here are a few reliable authentication methods:
1. CVC/CVV (Card Verification Code):
This three or four-digit number, normally found on the back of a credit card, adds an extra degree of security. During online purchases, it is necessary to verify that the individual making the purchase has a physical card.
2. Two-factor authentication (2FA)
This entails an extra step in addition to entering credit card information, such as obtaining a one-time code on a registered mobile number or email. To complete the transaction, users must enter this code.
3. Biometric Authentication
Some advanced systems use biometric data, such as fingerprints or facial recognition, to confirm the identity of the cardholder. This method adds a level of security and personalization.
4. Tokenization
Tokenization involves substituting sensitive credit card information with a unique identification or “token.” Even if intercepted, the token has no significance in a secure system without the appropriate authentication.
5. 3D Secure 2 (3DS2)
3D Secure, also known as Verified by Visa, Mastercard SecureCode, or American Express SafeKey, offers an additional layer of authentication during online transactions. For verification, cardholders type a password or receive a one-time code.
6. Challenge-Handshake Authentication Protocol (CHAP)
When a person is online, the Challenge Handshake Authentication Protocol (CHAP) encrypts their password. It also asks the user a knowledge-based security question with each new internet session to re-identify the user.
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How to use credit card authentication
Input Card Information: When making an online purchase, start by inputting the credit card information. It is usually located on the back of the card and contains the card number, expiration date, and Card Verification Code (CVC/CVV).
Then, use any of the verification method listed above to authenticate your transaction
Credit card authentication vs. credit card authorization
Credit card authorization and authentication are different but related processes in securing online transactions.
Authentication involves confirming the user’s identity through methods like passwords, biometrics, or one-time codes. In contrast, authorization focuses on verifying if the user has enough funds or credit limit for the transaction.
Additionally, while authentication safeguards against unauthorized users, authorization focuses on giving approval for the actual transaction.
Together, they build a comprehensive security framework for secure and validated credit card transactions in digital transaction.
