CCV2 - How to Design for both credit cards and gift cards?

I run an online K12 education company where most payment is recurring payments at around the $20 monthly level paid by credit cards.

We've found over the last few years that our decline rate on credit cards (and some fees) is creeping upwards. Since our product is education, there is very little fraud so we have never required a CVV2 code. Nor do we check addresses.

Our processor says that if we get the CVV2 code, we'll get less declines and the fees will be a little lower. But we know that many of our customers use cash cards (ie gift cards) which don't seem to have CVV2 codes.

I'm now trying to redesign our sales page to handle this and I'm looking for an example or advice on how other people handle this. My idea is that we ask them if their card has a CCV code on it and if it does, we ask for it. But I feel like I'm reinventing the wheel. What do to the rest of you do?

Anybody?

 

You need to go with auth.net and have the processor verify you wil get a cheaper rate for a ccv capture. Dont store the info or get an off site processor. Those are the ways to get a lower decline rate. Dont worry about creeping upward rate for non-ccv capture. Its gonna happen when the economy is in the BLEEP lol. I have the same thing on my site but i DO require ccv ALWAYS but i dont do any recurring. Im happy and stress free Nothing bad can come back on me, whew!

 

Who's your provider? I've never heard of anyone giving a discount for processing with CVV. I've seen some processors require it but never have seen any price based incentive for using it.

I can say that you will get more declined cards if you require CVV. More than half of the largest online retailers don't use CVV at all. I can guarantee if declines went down when using CVV, they would be using it.

 

I processing platform think this is more secure

 

"Our processor says that if we get the CVV2 code, we'll get less declines and the fees will be a little lower. But we know that many of our customers use cash cards (ie gift cards) which don't seem to have CVV2 codes."
If your processor said this, you need to change. There is no discount for CVV. CVV is only used to validate whether the card is fraudulent or not, Nothing else. You can validate this statement by reading the MasterCard interchange rates

"Our processor says that if we get the CVV2 code, we'll get less declines " Since you were not checking CVV, there is no way to know if your declines would be fewer now that you check for it. In fact, if you were not checking it and there are fraudulent cards, your decline rate will now increase. You need to know precisely what the reasons were for declines. This is found in the processor reporting. If they are not providing you that information, again, you need to make a change. You can't control what you can't see.

(note: You don't get fewer declines by using authorize.net. That's just pure hogwash. Declines happen for many reasons.)

I suspect your real issue is declines due to lack of funds, a far more likely scenario when "we know that many of our customers use cash cards". So here's a solution and some comments.
GATEWAY: Our gateway will enable you to do the following:
- add multiple cards
- automatically retry the card on susequent days if it declines
- automatically alert the card holder of expirations
- declines report- spot who has trouble, then require an alternate card to weed out problems
- you can choose to disallow any card that does not have a CVV for recurring billing
All cards are tokenized and hosted remotely on secure PCI Compliant servers, reducing the scope for your PCI Compliance.
Christine
PS- we've met! PC parent maybe?

 

WOW! What a great and thorough response. Thanks.
I've now checked back with my ISO. He says that he did NOT say that we would get a better rate (I thought he had said it) so if he did, he was just being sloppy. He knows better.

That's sobering that the CCV codes might give us a higher decline rate.

 

Thank you. One final note since I didn't address the main issue- how to design your web page. You can have all the fields for your web page, but not require them to pass validation. Which fields are required to 'pass' are set at the gateway level, though depending on your application programming the two may be integral.

For example, in Florida we have a lot of foreign issued cards. Addresses only can be validated for US, UK, and Canada. AVS CAN impact your fees, depending on the card type. But since no others participate in the AVS system, if you set AVS to required, the transaction will decline for all others. The merchant must balance declines vs risk. One way our gateway supports that is via the risk manager. Of dozens of options, one is 'must pass AVS IF the card issuer participates in the system'. That means if it is a foreign card, the transaction will still go through instead of a hard decline. I don't know of another gateway that does that. Payflow pro and authorize.net do not.

 

Are the declines happening months into the subscription run or are they happening right away? What I have seen often is merchants that sell low risk products or low resale value products tend to attract fraudsters looking to test their stolen cards. This is because most of these merchants don't have proper safe guards in place because of the perceived notion of low fraud rates.

So if the declines were happening on the initial charge, that may be card testing. If declines were happening after the fact, it could be an issue with prepaid cards or gift cards that run out of funds.

 

Maybe the declines for subsequent months were on the gift cards? Since their balance is usually fixed, they'll end up with no balance.