Mark O’Neill, who runs Perrys in Barrow-in-Furness, rang to say that two blokes had come into his store while he wasn’t there and presented a member of his staff with a Mastercard Cash Passport (the pre-paid holidaymakers’ type card) to make purchases worth £200. The card had no Chip and PIN facility so the staff keyed in the long number. The transaction went through okay and it didn’t look dodgy.
But Mark later learned from Worldpay that there had been a charge back and that he was liable for the loss, rather than the bank. The term used in the letter was: “It’s been keyed.”
The worrying thing about this is that the long number negates any security, so there is no protection for the retailer.
I asked Worldpay whether it was true that the technology that allows you to key in the long number null and voids any protection for the retailer. I also asked what should Mark’s procedure have been (although Mark says that he will no longer do this type of transaction).
James Frost, chief marketing and commercial officer, Worldpay UK, says: “Keying in the card number presents a higher risk to all businesses and this is not something we would recommend. If the card is not Chip and PIN capable and is unable to swipe and obtain a signature, the business should ask for a different method of payment.
“In the case that a Chip and PIN isn’t used we will do our best to defend our merchant on a case-by-case basis. But we provide information about charge backs in our customer operating instructions which all merchants receive and this clearly advises on the increased risks of processing card payments without using Chip and PIN.”
Worldpay pointed out that the procedures around chargebacks for fraud have been put in place by card issuers and card schemes to protect the consumer/cardholder. But clearly this doesn’t include the retailer in situations like Mark’s, although Frost says: “In the event that a cardholder contacts their bank to query a card transaction, Worldpay may intercede on behalf of our merchant in order to defend the merchant from a potential charge back. We raise a request for information with the merchant, asking them to provide identified information about the transaction to support their position.”
Overall the statistics are reassuring. “Since the widespread use of Chip and PIN, incidents of card fraud for face-to-face transactions have fallen in the UK by 76% since the peak in 2004 with figures from the Financial Fraud Action showing that contactless cards and devices account for only 0.5% of overall card fraud.”
Little consolation for Mark, though.