Magnetic Stripes – built-in-fraud protection on the back of cards

Did you know?

The magnetic stripe on the back of cards contains much more than the card account number and expiration date. Special security features are also built in to help you avoid accepting counterfeit cards and fraudulent transactions at the point of sale. The magnetic stripe is an active component of the card, always ready to work for you! When a sales associate swipes a card through a magnetic stripe reader and enters the dollar amount of the transaction, the card account information contained in the magnetic stripe and the transaction amount are sent electronically to the card issuer. The issuer uses this information in its authorization decision making process.

If the stripe cannot be read here are some manager tips from Credit Card Transactions Inc that you can use!

If the magnetic stripe on a card cannot be read, the sales associate must enter the account information to request authorization and complete the sale.

However, key entered transactions have some real disadvantages. Find out what they are from these manager tips mentioned below  

Increased risk of fraud and counterfeit

Magnetic stripes contain special features to help protect you against fraud. This security information is not available to the issuer with key entered transactions. Consequently, your risk of knowingly accepting a counterfeit card or fraudulent transaction increases.

For example, you have a "read and compared" sales terminal (one that displays the last four digits of the account number from the then magnetic stripe, so sales associates can compare the displayed number to the account number embossed on the card). This opportunity to spot fraud is lost with key entered transactions. This is an important manager tip that should not be ignored.

Less Efficient

Key entered transactions take longer to complete than electronic transactions and are prone to key entry errors.

Lost sales

Authorization decline rates are higher for key entered transactions than for magnetic stripe read transactions. Thus, the potential for lost sales is also higher for key entered transactions.

Is it possible to measure key entry?

Yes. You can easily rate the effectiveness of your magnetic stripe readers by calculating the percentage of key entered transactions when the card is present, compared to total transactions for each magnetic stripe reader. These ratings can be very revealing, pin pointing which stores, which readers, and which sales associates have high key entry transaction rates.

Key entry rate calculation (essential manager tips)

To obtain the percentage of key entered transactions occurring at a particular reader, divide the total number of Visa key entered (card present) transactions for the reader by the total number of Visa sales for the reader. Perform this calculation for each sales shift to determine the "reader rate per sales associate." Repeat the process for each store if you have more than one location.

Investigate high entry rates (not to be ignored manager tip)

If the percentage of key entered transactions to total transactions is greater than one percent per reader or per reader/sales associate, try to determine the reason. Even if your key entered transaction rate is less than one percent, it is a good idea to monitor key entry rates on a regular basis.

Increased cost

Key entered transactions may cost you more. One of the components of the merchant discount rate is based on your ability to read and transmit the magnetic stripe at the point of sale. Carefully follow these manager tips from Credit Card Transactions Inc and you will never encounter with difficult problems.

AVS (Address Verification System)

In 1996, Visa/MasterCard headquarters introduced a new regulation requiring all businesses who manually key in the majority of their credit card transactions to have a special fraud prevention feature on their credit card processing equipment. This feature is referred to as an address verification system (it checks to see that the billing address given by the customer matches the credit card). If you opt not to use AVS for keyed in transactions, VISA and MasterCard will not support your transactions and will charge you an additional percentage on those sales.

We hope you make effective use of these manager tips. For further queries you can contact us immediately right here!