Transaction Security, Evolved

For a payment system to be effective, merchants and consumers must find it convenient and easy to use. But as fraud becomes more sophisticated, inspiring confidence without overly complex processes becomes a greater challenge. Authentication may provide the answer.

Industry professionals who worked with POS transactions in the early 1980s can remember the paper “Warning Bulletins” bankcard associations mailed biweekly to merchants. When a customer presented a bankcard, the merchant would look through the bulletins to ensure the card wasn’t listed as lost or stolen. If it was, the merchant was supposed to take the card, cut it in half, and send it to their bank for a reward.

As POS transaction processing evolved in the 1980s, it became faster, easier, and more cost-effective to install online authorization and settlement systems. Inexpensive POS devices were used to authorize and electronically deposit receipts for merchants who received lower discount fees as interchange fraud decreased.

From Transaction Trends magazine, June 2009 issuefull article >>>