erified by Visa is a fraud prevention tool implemented by Visa for ecommerce merchants. Participating merchants will have the Visa Secure badge on the checkout page of their website. Verified by Visa helps prevent credit card fraud by checking to make sure that the purchase is indeed being made by the cardholder—protecting both the customer from identity theft and the merchant from chargebacks. It is important to note that both the customer and the ecommerce merchant must be participating members of the Verified by Visa service.
The card-issuing bank might confirm the identity of the cardholder in several ways. For example, once the credit card information is entered but before it is submitted to the merchant, a message or screen will prompt the customer to enter a one-time passcode or submit biometric identification.
However, in some cases the customer may not be prompted to submit these checks, even if the merchant is a Verified by Visa participant. This simply means that the card-issuing bank is performing certain risk assessment checks, such as analyzing the customer’s spending habits and confirming that the purchase in question falls in line with that particular customer’s previous behavior.
Transactions that use Verified by Visa technology maybe eligible for lower interchange rates, so if you are an ecommerce merchant it is prudent to look into this service—it could save you money!