Protecting Payments

Leading the payment services industry in data security.

The leadership of MasterCard in advancing security in commerce is unsurpassed. As a thought leader in payment card security, MasterCard has played a major role by:

  • Pioneering innovative technologies and initiatives
  • Defining industry standards and practices
  • Fostering collaboration among businesses and industry professionals worldwide

These efforts help every segment of the payment card industry – from business partners to financial services institutions to law enforcement agencies globally.

MasterCard is steadfast in its commitment to continue to provide safe, secure and reliable payment products and services. One goal is to help MasterCard business partners increase their revenues by accepting and processing MasterCard cards. MasterCard strives to achieve this goal through innovation, collaboration and by providing an end-to-end global response to payment card fraud.

Developing Technology

The first to market with many card security features, MasterCard continues to engineer and implement new programmes to advance data protection and prevent payment card fraud.

A History of Security Innovations

Over the past four decades, MasterCard has been a leader in the payment services industry with many security innovations and initiatives.

  • 1969 – Introduced a centralised fraud reporting system to track and analyse fraud
  • 1974 – Standardised the magnetic stripe for all cards
  • 1983 – Pioneered the three-dimensional hologram
  • 1988 – Developed CVC 2 (Card Validation Code 2) and the tamper-evident signature strip
  • 1990 – Introduced the Member Protection Programme, combining fraud monitoring and analysis
  • 1995 – Introduced Chip technology
  • 2001 – Launched MasterCard Site Data ProtectionTM
  • 2002 – Launched MasterCard® SecureCodeTM
  • 2003 – Introduced the Debit MasterCard Hologram
  • 2004 – Partnered with NameProtect to close down fraudulent internet sites
  • 2005 – Mandated Triple DES encryption on all ATM networks; integrated mobile messaging service into fraud detection product Aristion

Chip Technology

Around the world, smart cards are poised to bring unprecedented security to consumers and businesses. Today, some 150 million MasterCard EMV-standard smart cards are already accepted at more than 3 million terminals worldwide.

MasterCard has long recognised the security and processing potential of the chip, and has made chip payment technology central to its fraud prevention strategy. Payment cards containing chips are more powerful than traditional magnetic stripe cards because they contain tiny computers that make transactions safer. Chip technology also reduces the incidence of fraud by making cards more difficult to counterfeit.

Security Advantages for Merchants

When a cardholder makes a card-present purchase, the chip card is inserted into a point-of-sale (POS) terminal and remains there during the transaction. The chip communicates with the terminal to validate the cardholder’s identity and record important transaction information. Chip cardholders usually authenticate themselves with a Personal Identification Number (PIN), which is a safer means of authentication than a signature.

Chip transactions using a PIN provide additional security for lost or stolen cards. Businesses that use chip and PIN terminals are relieved of liability for the cost of card fraud – whether cardholders enter their PIN or their signature – as long as cashiers follow the directions indicated in terminal prompts and use routine security practices. Businesses can also benefit from fewer chargebacks.

As chip cards become more widely used, they will increasingly replace cash, reducing the need to handle and store currency. Chip cards also minimise the potential for errors and losses by eliminating the need for paper reconciliation – transaction records are entirely electronic.

Making Remote Shopping More Secure

For online shoppers, MasterCard offers OneSMART® Authentication, a chip-based solution that uses a card reader to generate one-time passwords for highly secure shopping over the internet. The same approach can be used to secure mail or telephone order payments and remote banking transactions.

Getting the Word Out About Security

MasterCard shares the latest knowledge on security and fraud with MasterCard members, industry leaders and law enforcement agencies around the world.

  • Fraud Strategy Forums. MasterCard provides members with feedback on security programmes and insight for future efforts.
  • Global Risk Management Symposiums. MasterCard brings industry leaders together to enhance communication, collaboration and cooperation in fighting online payment card crime. Key speakers at these three-day events include MasterCard senior management, payment card industry leaders, and government and law.

Collaborating with Experts

When it comes to fraud prevention, collaboration is essential. MasterCard maintains strong relationships with law enforcement officials and industry leaders. MasterCard also works with retailers and their business partners. In addition, MasterCard has developed best practices to protect transaction data throughout the entire payment process.

Training and Educational Materials – Through law enforcement briefings, MasterCard provides critical fraud prevention instruction to crime-fighting agencies around the world. MasterCard conducts periodic briefings for the law enforcement agencies on fraud trends. MasterCard also develops educational materials that focus on proven fraud prevention tactics for online and offline purchasing environments. Investigation and Prosecution – When payment card fraud does occur, MasterCard works closely with the law enforcement organisations throughout the world to facilitate investigation and prosecution. For example, in 2005, MasterCard joined forces with law enforcement agencies to shut down fraudulent websites soliciting donations for Hurricane Katrina and the Asian tsunamis.

Responding Globally to a Worldwide Challenge

MasterCard is a global brand, with cards accepted at over "24 million locations" in more than 210 countries and territories around the world. MasterCard demonstrates its commitment to protecting members, business partners and cardholders from payment card fraud through a rigorous and comprehensive approach.

  • Impressive Success Rates – Employees at 37 MasterCard offices throughout the world are dedicated to overseeing global anti-fraud efforts. The results they have achieved are impressive: consumers worldwide use MasterCard cards for more than 16 billion transactions a year, and all but a minute percentage of those transactions are fraud-free. This success rate allows consumers to make purchases confidently and safely – anytime and anywhere.
  • Inspiring Cardholder Confidence – MasterCard has a Zero Liability policy in the United States, Canada and countries throughout the Asia Pacific region. This policy is applicable to purchases made in stores, by phone or online and helps cardholders to not be held responsible for unauthorised transactions. As a result, consumers can feel confident about purchases they make with a MasterCard card.
  • Piloting New Programmes – MasterCard continues to pioneer innovative security technologies around the world to make the future of payment transactions even more secure. Currently, MasterCard is testing a new, more secure chip authentication process in Europe. MasterCard is also testing a higher-security hologram technology programme in Japan.

A Commitment to Security in Commerce

MasterCard takes fraud prevention seriously and demonstrates this commitment every day – innovating new preventive technologies and programmes, collaborating with industry leaders and law enforcement, and acting forcefully and globally to protect the payment services industry and keep commerce secure.

Learn more about what you can do to protect yourself as a merchant