To make online shopping safer, from 1st August onwards, the Reserve Bank of India (RBi) has made it mandatory for all banks to add an additional authentication step for all online transactions. So, now, in addition to entering a 16-digit credit card number, card expiry date and 3-digit CVV number (on the back of the card), your customers will have to enter a MasterCard SecureCode (MSC) or Verified by Visa (VBV) number to complete online transactions.

MasterCard and Visa introduced MasterCard SecureCode and Verified by Visa respectively. They are security protocols that help secure your transactions when you shop online. Simply put, MasterCard SecureCode* and Verified by Visa* are unique passwords that are based on information about the cardholder that is not displayed on the card. RBI has introduced this additional authentication or verification step to curtail any possibility of online fraud. It is enforcing this mandate by levying penalties prescribed under the Payment and Settlement Systems Act 2007 (Act 51 of '07) in case of non-adherence.

*Customers can obtain their MasterCard SecureCode and Verified by Visa passwords from their card-issuing bank.

How it works?
When a customer executes an online transaction through Master Credit Card or VISA Credit Card, to confirm the payment, he will have enter his Verified by Visa or MasterCard SecureCode password that is provided by his card issuing bank. Failure to enter this number will lead to Transaction or Payment failure.

The Drawbacks

	Approximately, 80% of online business comes from the use of credit cards
	Major banks have registered less than 40 per cent of their active base (IAMAI)
	Banks have not yet started updating their systems to accommodate this change

The Benifit

	An authentication that is based on cardholder information not displayed on the card
	Online Alerts to the cardholder for all 'card not present' transactions of the value of Rs 5,000 and above
	Banks have already begun taking steps to educate and inform their customers about the RBI mandate.
	From August 1, online shopping for India's 24 million-odd online credit card and 140 million debit card users will be much safer

Countering the Drawbacks: The CCAvenue Solution If your customer does not have a MasterCard SecureCode or Verified by Visa password, it may lead to transaction failure. However, you can minimize the impact of this loss. Use CCAvenue's Transaction Failure Payment Collection feature. All you need to do is log into your CCAvenue M.A.R.S Dashboard., select 'Collect Bill Payment' and insert the order number of the failed transaction to and send a mail to the customer. Most customers would also have a bank account. Since we have tied up with over 30 banks and also have ATM-cum-Debit Card, Cash Cards and Mobile payments as payment options, your customer can pay by using ant of these options instead of a Visa or a MasterCard credit card. Also by sending this invoice in the email, you enable the customer to pay directly through CCAvenue instead of having to go to your website and placing this order all over again. These steps will help in minimizing any loss in sales due to the changes in the regulatory environment.

To summarize, in an effort to add security to the online shopping process, from 1st August onwards, the RBI is making it mandatory for all banks to verify online transactions using MasterCard SecureCode and Verified by Visa. If you receive a transaction failure because of this new mandate, you can use CCAvenue's Transaction Failure Payment Collection feature to minimize loss of sale by sending your customer a transaction failure message and a link that will enable him to pay directly through another payment option without having to your website and placing the order all over again.