CVV Card Verification Value vs 3-D Secure, D365, Dynamics Ax

What’s the difference between Card Verification Value verification and 3-D Secure cardholder authentication? How can each be used in Microsoft D365 F&O or Dynamics AX 2012? Both are solutions to reduce chargeback risk for card not present transactions, but not much else is the same.

The CVV, or Card Verification Value, is a three or four-digit number on credit cards to add an extra layer of security for phone and online purchases to help protect against identity theft. CVV or CSC, or Card Security Code, and CVV2 have the same purpose. The “2” means it was created using a newer process to make the number more difficult to guess.

3-D Secure is a protocol providing an additional layer of security for eCommerce transactions prior to authorization. 3-D secure 1.0 is being retired October 1, 2021 and legacy integrations often require an update.

What are merchant benefits for using 3-D Secure vs CVV?

  • More authorization approvals. False declines are a significant source of lost revenue.
  • Some cards have reduced interchange rates when the authentication is invoked, which are usually over 90% of fees.
  • Less friction for customers at checkout because it’s more likely to get approved and no need to chat or call for help.
  • Reduced risk of chargeback losses. Fraud liability for “it wasn’t me” automatically shifts to the issuer; Merchants do not have to defend those chargebacks, they never even see them.

At this stage of massive data breaches and stolen data globally, the CVV is just not enough to mitigate chargeback risk because too many compromised cards with CVV data are available on the dark web. Additionally, merchants can experience issuer generated chargebacks even if an authorization was granted. What? Yes, and there is no recourse. A big issue is following authorization rules. Here’s some examples:

  1. A merchant has customer card numbers on file (old school on paper). The merchant key enters each transaction. This fails the unscheduled credential on file rule, where after the initial authorization, a response code is submitted with each subsequent authorization.
  2. A merchant has customer card numbers on file via stored tokens, no access to cardholder data. The merchant uses token to get new authorizations. This can fail the unscheduled credential on file rule, where after the initial authorization, a response code is required with each subsequent authorization, however, the technology used does not support those protocols.
  3. A merchant gets a phone order and enters CVV. The merchant has higher risk of fraud because the customer must self-enter the card number to participate in 3-D Secure authentication.

If you have non-qualified, STD, and other classes of transactions on merchant statements, that usually means that an authorization rule was not followed. So while an authorization code may have been granted, the merchant is at higher risk of a chargeback and usually pays penalty fees.

How can Microsoft D365 and Dynamics AX users leverage the benefits of 3-D Secure 2.0 vs CVV verification? For B2B, I recommend all merchants require their customers self-manage their payment methods using a payment gateway that supports all the latest authorization rules. (Few do.) For cards that have been stored over multiple years, it’s unlikely that the token stored has the correct data (not visible to merchants) to send with newer transactions. For example, Authorize.net, a popular payment gateway, just started supporting unscheduled credential on file this year, and only on First Data. Ask about our integrated and standalone solutions that include a cloud portal for customers to self-manage payment methods, view payment history, and pay invoices, if applicable.

What payment gateways support customers self-managing payment methods in compliance with all the current rules? Contact us for stand alone, Dynamics integrated, Magento and other solutions. Remember, 3-D secure can only be invoked if the customer entered their cardholder data. For subsequent unscheduled credential on file transactions, CVV and 3-D secure are not needed, because the cardholder has already verified themselves.

Call Christine Speedy, PCI Council Qualified Integrator Reseller (QIR) certified, for all your card not present, Microsoft Dynamics AX and D365 payment processing needs from ACH to credit cards and more. Get a new merchant account or keep your existing. 954-942-0483, 9-5 ET.

Microsoft Dynamics D365 F&O Credit Card Processing Solution

Looking for a D365 F&O credit card processing solution? Very few check all the boxes. There are different nuances to each and a big consideration should also be the level of customization that is needed. How much work is needed to get the module live and continually updated?

Our D365 F&O credit card processing solution minimizes the need for customization and is light to implement, creating opportunities to save tons of money on consulting, development, and updates. Users receive a deployable package and continual updates to work with all D365 updates.

Built based on years of experience with ERP payment processing and especially the needs of B2B manufacturers and distributors, including omnichannel, here’s a few examples:

  • Supports RETAIL, MOTO and ecommerce. Yes, that’s retail transactions within F&O, not D365 Retail.
  • Retail accepts EMV chip, checks and cash.
  • Retail Level 3 processing reduces B2B costs.
  • Prepay on sales authorization.
  • Split payments among multiple payment methods.
  • Stored card and ACH info- tokenized, never visible.
  • Automated daily batching.
  • Automated journal updates.
  • Payment object resides outside of the ERP environment for reduced PCI scope.
  • Optional validated P2PE.
  • Automated compliance with authorization and stored credential rules.
  • Optimization for least cost processing any given transaction.
  • Compliant with rental and loaner special processing requirements.

Call Christine Speedy, PCI Council QIR certified, for all your Microsoft Dynamics AX and D365 payment processing needs from ACH to credit cards and more. Get a new merchant account or keep your existing. 954-942-0483, 9-5 ET.

Credit Card Processing from AX to D365 F&O

Upgrading from Dynamics AX to D365 Finance & Operations?

Consultants help with planning and migration, however, when it comes to choosing a payment connector to capture revenues, engaging a payment processing professional can save boatloads of time and money. Why?

  1. The payment connector, including payment gateway, influences credit card processing fees. Compliance with authorization and settlement rules is complicated and connectors manage processes differently because of where they are in technology development. It’s the single largest influencer of fees and penalties you’ll pay. Look at this MasterCard Integrity Fee on a Chase Paymentech merchant statement:
mastercard PROCESSING INTEGRITY FINAL ATH

$536,042.54 multiplied by a .25% penalty fee for a total of $1,340.10 in avoidable costs. This is due to not properly authorizing and settling transactions, including reversals for unused authorizations. There are many ways to get authorization penalty fees and I’ve written multiple articles about them, including this on the Visa Stored Credential Mandate.

2. The payment connector makes a huge difference in internal automation for related processes, such as updating journals, as well as external customer automation including self-service access to invoices, payment history, managing payment methods and more.

3. The ISV payment connector package may include other items in your development road map. An independent payment processing professional will assess needs and provide insights on multiple connectors to help guide your business to the best choice. Which support the stored credential mandate for unscheduled credential on file? How will it help meet current and future Covid-19 side effect needs? How will it protect the business from a data breach as a result of workers at home?

In my experience, consultants don’t consider the payment connector until the project is defined and well under way, a contributing factor why more than 50% of ERP implementations fail to meet time, budget, or benefit objectives. Specification decisions are based on ‘securing payments’, without knowing how the connector might already have built-in solutions for other areas including customer service, sales, accounting, call center and more. If brought in sooner, the payments professional can eliminate some customization, reduce implementation time and costs, while improving immediate benefits.

To summarize, a flip phone and a smart phone are both capable of making phone calls, but the experience is completely different. Which would you prefer?

Christine Speedy, 3D Merchant blogger and CenPOS Global Sales, 954-942-0483 is an Independent Payments Professional and is independently Qualified Integrator Reseller (QIR) certified by the PCI Council.

D365 Customer facing invoice portal D365 F&O

Looking for D635 F&O solution for clients to access online portal to view and pay invoices? One of the key solution differentiators is the integrated payment gateway for credit card processing. Easily overlooked, it’s most impactful on profits. Other than merchant discount, the payment gateway is the single largest influence on the cost of credit card acceptance and chargeback risk.

How can a payment gateway impact costs?

  1. Authorization management. There’s a slew of rules, which are continually changing, regarding what has to happen in order to qualify transactions for the lowest cost possible. Virtually no payment gateways support all of them. For example, authorize.net doesn’t support unscheduled credential on file (stored card on file). Reference https://community.developer.authorize.net/t5/Integration-and-Testing/Visa-Stored-Credentials/td-p/60149. The average cost differential for a Mastercard business card is 1% for a transaction with valid authorization vs invalid (but approved).
  2. Customer disputes and chargebacks. A merchant can only defend disputes if they have proper authorization in #1. Instead of wasting time defending disputes, merchants can prevent them with 3-DSecure 2.0, a global cardholder authentication solution. If the payment gateway supports it, “it wasn’t me, I didn’t authorize it” goes away; liability belongs to the issuer.
  3. Rate Qualification. Items 1 and 2 above both reduce the cost of card acceptance. So does supporting level 3 data. It amazes me how many calls I get from consultants and merchant services salesmen that just want to help their customers qualify business and purchasing cards for level 2 rates. Why wouldn’t you want all clients to qualify for level 3 rates, which are substantially lower for business to business transactions?
  4. Stored credential compliance. This is not just securely tokenizing cardholder data, but complying with a new set of rules established in 2017, which all merchants and acquirers are required to comply with. Payment gateways have no such requirement. They can choose to provide the services to clients or not. The trickiest is unscheduled credential on file, which is what most business to business companies need, unless they have a SaaS billing model. Towards the end of 2019, a few more gateways were offering this, but the list is very small.

Few payment gateways support all four items above.

Call Christine Speedy for D365 F&O invoice portal with compliant payment gateway to maximize profits and improve your customer experience. 954-942-0483, 9-5 ET for all your recurring billing and stored credential payment gateway and virtual terminal needs.

D365 Finance & Operations Questions To Ask Before Choosing Credit Card Processing Solution

Upgrading to D365 from Microsoft AX? Engaging a payment processing professional can save boatloads of development time while opening up new ways to engage with customers. Additionally, payment gateway selection directly impacts EBITDA project objectives. What three key questions must be asked when choosing a credit card processing solution for your business to business operation?

I’ll save merchants and consultants reading this a lot of time. Ask the 3 questions and then pretty much disregard the answers. You’re unlikely to find anyone who will be able to answer all three questions adequately so on that basis alone, it’s best to contact a subject matter expert like Christine Speedy, here at 3Dmerchant.com.

  1. Does the payment gateway support Unschedule Credential On File? Virtually every business to business operation stores at least a few credit cards for the occasional customer on file need, which is a good thing because if you’re one of those that require customers to call in each time, that’s negative friction impacting cash flow, profits, and satisfaction. What most businesses don’t know is that the rules and technical specifications for storing cards and processing transactions with stored cards changed tremendously in October 2017. Virtually no payment gateway has upgraded to get compliant, leaving businesses exposed to multiple financial penalty risks. Note, this is not just ‘tokenization’, which most gateways support, but rather a specific set of new card acceptance rules. Everyone in the payment ecosystem has some responsibility to make changes for compliance- issuer, acquirer, merchant and payment gateway. No one can ‘automatically’ get merchants compliant with new UCOF rules; if any vendor says they have, call 3Dmerchant to review why it’s not.
  2. If the initial authorization and final settlement amount are not the same, what happens? This is a common scenario for distributors, manufacturing and ecommerce, but if there’s a mismatch, an or an open authorization is not reversed, merchants pay an expensive processing penalty fees. For example, MasterCard Data Rate 1 might appear on merchant statements for interchange rate qualification, which is nearly 100 basis points higher than if settled optimally.
  3. Is there any difference between the type transaction transmitted to the acquirer when a customer self-pays an invoice such as through a payment portal vs when an employee key enters the cardholder data? The answer must be yes. One is submitted as a phone order (MOTO) and one is submitted as an ecommerce order.
  4. BONUS: What’s the process for renewing an expired authorization? Preauthorizations are common in manufacturing and ecommerce. While an expired authorization is usually approved for final settlement within 30 days, there are financial penalties and risk associated with using expired authorizations. Merchants should automate this process as much as possible, removing decisions from employees, which is always fraught with risk.
  5. BONUS 2: Can I process EMV chip transactions with level 3 processing in F&O? Due to October 2019 licensing changes, some merchants may find it more profitable to skip the retail license add-on.

Call Christine Speedy, PCI Council QIR certified, for all your Microsoft Dynamics AX and D365 payment processing needs from ACH to credit cards and more. Get a new or keep existing merchant account at 954-942-0483, 9-5 ET.