Is it really in the best interest of credit card companies to take further measures to reduce or eliminate online credit card fraud? I think not. Why would they? After all, they stand to lose millions of dollars in revenue if they try to eliminate this form of fraud.

How can I say this? Well, according to one of the major online credit card processors, MERCHANTS lost $2.7 BILLION to online credit card fraud in 2010. Understand, the merchants lost this money, not the credit card companies. Online merchants are held responsible for most all fraudulent orders. Also remember, the credit card companies charged the merchant a processing fee on every one of those transactions. Conservatively, say they collected a 2% fee on every transaction... $54 million would be collected in fees to process those cards. They do NOT refund those fees, they keep them. In addition they collect a charge-back fee for every fraudulent order charged back to the merchant... say the average fraudulent order was $1000... 2.7 million charge-backs, say at an average of $25 per charge-back. Hmmmm, another $67.5 million in fees. Then if you want to challenge a charge-back you can spend another $700 to file a claim with the card company (and most likely lose).

Do you see how much money is to be made by the credit card companies to sit back and let the merchants take the fall for their ineffective and loose fraud standards? Sure, there are a few measures you can take to try and protect yourself as a merchant but the bottom line is that there is not enough being done at the processing level to match enough information.

As a consumer and merchant I would welcome stringent online credit card processing criteria. This is what I believe is the minimum information that a credit card processor should require to be an EXACT match for an online credit card transaction to be authorized AND the additional steps that should be implemented to put a halt to online credit card fraud.

1. The FULL name of the person as it appears on the credit card MUST match. Currently there is no effort to match a name, none. This is essential for peace of mind as a consumer and merchant. You should know your name and how it is spelled out on the card.

2. The FULL billing address must match, including the street name along with the number. Only the customer should know this or have access to it (and the card company). Right now there is only a number match. If there is a PO box for the billing it should be required that a second line of the address match a shipping street address. The official street address for UPS and FedEx shipments should be a requirement, one of the few ways we can prove we got it to the customer.

3. The card verification number should ALWAYS be a required match on any end of the processing. In addition to the 3 digit code on the back, there should be an additional 4 digit code that the customer has to add to verify they are indeed the owner, this way if the card is lost or stolen they can't process a order without the unknown number that is not on the card but known only to the actual card owner.

4. For added security on shipments to addresses other than the official billing address there should be a confirmation alpha-numeric number that the customer has to enter in order for a different ship to address to be authorized. This should be a minimum of 4 letters/digits long and only known to the customer.

These are strong measures that would virtually eliminate a majority of online fraud orders. You may think this is too much and would be too costly but the merchants are already paying for the cost of these every year, over and over. It is about time that the credit card companies and processors that are making millions from us every year in fraud are held responsible to make provisions to eliminate online fraud. We, the consumers, need to to take a much higher responsibility for protecting our credit card information and have to be more diligent in caring for the cards themselves and the information that allow fraudsters to bilk us merchants out of the billions they do every year.