What is a First Data Certified 2 Mail?

A First Data Certified 2 Mail refers to a payment processing method that allows merchants to securely accept credit card and debit card payments when the physical card is not present. This typically involves customers providing their card details—card number, expiration date, and CVV—over the phone, through the mail (though increasingly less common), or via a secure online form, to a merchant who then manually enters the information into a payment processing system. This method is “Certified 2” because it adheres to specific security protocols and compliance standards established by First Data, a leading payment processor, to protect both merchants and customers from fraud. In essence, it’s a secure system for card-not-present (CNP) transactions facilitated by First Data’s security framework.

Understanding the Nuances of Certified 2 Mail

While “mail” is in the name, Certified 2 Mail transactions extend far beyond traditional postal mail orders. It encompasses any scenario where the cardholder isn’t physically present to swipe, dip, or tap their card. This includes phone orders, online order forms (though these often use more sophisticated integrations), and any other instance where the merchant key-enters the card details. The “Certified 2” aspect is crucial because it signifies adherence to a specific set of security requirements designed to minimize the risks associated with CNP transactions, such as card fraud and chargebacks.

The Significance of “Certified 2”

The “Certified 2” designation indicates that the payment processing system or method used by the merchant has undergone rigorous testing and verification to meet First Data’s security standards. This certification process ensures that the system is equipped to handle sensitive cardholder data securely, reducing the likelihood of data breaches and fraud. It also provides merchants with certain protections and mitigates their liability in the event of a fraudulent transaction, assuming they have followed all required procedures.

Security Protocols and Compliance

First Data Certified 2 Mail adheres to strict security protocols, often including:

• Data Encryption: Cardholder data is encrypted during transmission and storage to prevent unauthorized access.
• Address Verification System (AVS): AVS verifies the billing address provided by the customer against the address on file with the card issuer.
• Card Verification Value (CVV): CVV requires the customer to provide the three or four-digit security code on the back of their card.
• Fraud Monitoring: Sophisticated fraud detection tools are used to identify and prevent fraudulent transactions.
• PCI DSS Compliance: Merchants processing Certified 2 Mail transactions must comply with the Payment Card Industry Data Security Standard (PCI DSS), a set of security standards designed to protect cardholder data.

Benefits for Merchants

Using a First Data Certified 2 Mail system offers several benefits for merchants:

• Expanded Customer Base: Allows merchants to accept payments from customers who are not physically present at their location.
• Increased Sales: Provides an alternative payment option for customers who prefer to order by phone, mail, or online without physically presenting their card.
• Enhanced Security: Adherence to First Data’s security standards and PCI DSS compliance helps protect against fraud and data breaches.
• Reduced Chargeback Risk: By following security protocols such as AVS and CVV verification, merchants can reduce the risk of chargebacks.
• Improved Customer Trust: Demonstrates a commitment to security and data protection, which can enhance customer trust and loyalty.

Potential Drawbacks

While beneficial, Certified 2 Mail also has potential drawbacks:

• Higher Risk of Fraud: CNP transactions inherently carry a higher risk of fraud compared to card-present transactions.
• Increased Chargeback Potential: The absence of a physical card increases the likelihood of chargebacks due to fraudulent or disputed transactions.
• Manual Data Entry: Requires manual entry of cardholder data, which can be time-consuming and prone to errors.
• PCI DSS Compliance Requirements: Merchants must adhere to strict PCI DSS compliance requirements, which can be complex and costly to implement.
• Potentially Higher Processing Fees: CNP transactions often incur higher processing fees compared to card-present transactions due to the increased risk of fraud.

Frequently Asked Questions (FAQs) about First Data Certified 2 Mail

Here are some frequently asked questions to further clarify First Data Certified 2 Mail:

1. Is First Data Certified 2 Mail still relevant in the age of online payments?

Yes, it remains relevant, although its application is evolving. While online payments have become more prevalent, Certified 2 Mail principles are still applied to phone orders and other CNP scenarios. Furthermore, the security protocols developed under Certified 2 influence the security measures used in many online payment systems.

2. How does AVS (Address Verification System) work in a Certified 2 Mail transaction?

AVS compares the billing address provided by the customer with the address on file with the card issuer. If the addresses don’t match, the transaction may be flagged as potentially fraudulent. Merchants can configure their systems to reject transactions with AVS mismatches or require further verification.

3. What is the role of CVV (Card Verification Value) in preventing fraud?

The CVV is a three- or four-digit security code located on the back of credit cards. It’s designed to ensure that the person making the purchase has physical possession of the card. Requiring the CVV in a Certified 2 Mail transaction adds an extra layer of security and helps prevent unauthorized use of stolen card numbers.

4. What are the PCI DSS compliance requirements for merchants using Certified 2 Mail?

PCI DSS requires merchants to implement a range of security measures, including: installing and maintaining a firewall, encrypting cardholder data, using strong passwords, regularly updating antivirus software, restricting access to cardholder data, and monitoring their systems for security vulnerabilities. Regular audits and assessments are also required to ensure ongoing compliance.

5. How does tokenization relate to Certified 2 Mail?

Tokenization replaces sensitive cardholder data with a non-sensitive “token.” While not directly part of the traditional Certified 2 Mail process, tokenization can be implemented as an additional security measure to protect cardholder data during transmission and storage. This reduces the risk of data breaches and simplifies PCI DSS compliance.

6. What happens if a merchant experiences a data breach while using Certified 2 Mail?

If a data breach occurs, the merchant is responsible for notifying affected customers, investigating the breach, and taking steps to prevent future incidents. They may also be subject to fines and penalties from card issuers and regulatory bodies. Maintaining PCI DSS compliance is crucial to minimizing the risk of a data breach.

7. How can merchants minimize the risk of chargebacks in Certified 2 Mail transactions?

To minimize chargeback risk, merchants should: obtain clear and accurate order information, use AVS and CVV verification, provide prompt and courteous customer service, clearly communicate their return and refund policies, and promptly respond to customer inquiries and disputes.

8. Are there alternatives to First Data Certified 2 Mail for CNP transactions?

Yes, there are several alternatives, including other payment gateways and processors that offer CNP payment processing solutions. However, each option will have its own security protocols and compliance requirements.

9. Can I use a mobile device to process Certified 2 Mail transactions?

Yes, many mobile payment processing solutions allow merchants to manually enter card details for CNP transactions, often incorporating the security features associated with Certified 2 Mail principles, such as data encryption and AVS/CVV verification.

10. How do I get certified for First Data Certified 2 Mail?

The process typically involves working with a First Data reseller or partner. They will guide you through the application process, help you implement the required security measures, and ensure that your system meets First Data’s certification standards.

11. Are the processing fees higher for Certified 2 Mail transactions compared to card-present transactions?

Generally, yes. Because CNP transactions carry a higher risk of fraud, processors typically charge higher fees to compensate for that risk. The exact difference will vary depending on the processor and the merchant’s specific circumstances.

12. Does First Data Certified 2 Mail support recurring billing?

Yes, Certified 2 Mail, or rather payment systems that incorporate its security principles, can support recurring billing, but requires meticulous implementation of security measures and adherence to PCI DSS standards to protect cardholder data over the long term. Utilizing tokenization can greatly simplify managing recurring payments securely.

In conclusion, understanding First Data Certified 2 Mail is essential for merchants who need to process CNP payments securely. By adhering to the required security protocols and compliance standards, merchants can minimize the risk of fraud, protect cardholder data, and build trust with their customers.