I am not going to enter into an argument with you Max, but I do not think you are considering all the facts.
The bottom line is you are still making a card not present transaction. There are well qualified and established risks with any card not present transaction. Using a manual payment gateway does not change those risks. The bank (merchant account services provider) will determine its exposure to risk commensurate with the method used to accept credit cards (amongst other things). This is set in stone.
Now what has occurred with these new manual gateways is they add a new layer of defence when accepting credit cards online. There is an emphasis on merchant side screening. I happen to agree with you here, when a merchant takes this seriously and does a few checks it is not hard to pick out an attempt at fraud.
Depending on how effective the merchant is at this, I agree there is the possibility there for them to keep themselves free from fraud which is something that has not happened before with handling internet based credit card payments with the online live processing method.
But for this to work the merchant has to be serious about checking information before they accept and charge the card. This is why I said "not a magic bullet" - because the manual gateway on its own does not end fraud. But combine a manual gateway with an astute merchant with a proper checking process then the result has the potential to achieve the unthinkable - the end of online credit card fraud.
I should also mention that some real time gateway processors can emulate the manual gateway system by the implementation of a pre-athorisation mode. However, this is usually a further cost added to a more expensive system to begin with. I concede that logic suggests the advantage is in just getting the less expensive manual payment gateway system in the first place.
However, as I have said before, the biggest non-conditional improvement that these new manual payment gateways bring as we (banking industry) see it is not merchant side at all. It is the back end. We can supply manual type merchant account facilities where transactions are preformed by the merchant themselves and thus the merchant facility is operating closed off and away from the open internet. Also, credit card data is not permanently stored by the gateway. At least not with the two manual payment gateways I am specifically referring to.
For those of us in the industry who are aware of what can happen when secure credit card data storage systems get hacked or compromised, no permanent storing of credit card data by the gateway is a watershed accomplishment. This is something Visa, Master Card and the other card vendors should be in heaven about - it hasn't got anything to do with the merchant per say.
So I am not arguing with you Max, I am merely saying there is more to it.
Thanks
Mal
