To ensure that continued growth and profitability are not threatened by mounting fraud losses, Visa is implementing a broad range of programs which control criminal risk. Few fraud-related issues have received more attention from members in recent years than the problem of magnetic stripe counterfeiting.

But Visa members now appear to be getting the upper hand in their fight against this kind of electronic counterfeiting by equipping their cards and merchants with Card Verification Value (CVV) technology in the Asia-Pacific region alone, CVV is helping Visa members stop more than half a million dollars in counterfeit losses every month.

CVV, which utilizes a counterfeit-proof algorithmic code embedded in the magnetic stripe itself, enables financial institutions to verify the authenticity of every magnetic stripe when a card is swiped through a POS terminal.

When Visa first observed magnetic stripe counterfeiting in the late '80s, it began rolling out the CVV technology to members worldwide. In the Asia-Pacific region, where much of the world's electronic counterfeiting originates, 60 percent of all Visa card transactions can be verified with CVV today. While counterfeit losses still occur, the region's share of the total worldwide counterfeit losses dropped to 26 percent in the fourth quarter of 1991, compared to 46 percent of the year earlier.

To further support the CVV technology, Visa launched its Terminal Placement Program earlier this year to protect a small number of "high-risk" merchant locations from counterfeiting. VisaNet monitors the worldwide merchant base identify locations that are processing unacceptable levels of counterfeit transactions. When discovered, Visa requires the installation of a POS terminal to process all subsequent transactions and nab any counterfeit cards that do not have the proper CVV coding. Currently, the program is in the process of installing more than 4,000 terminals throughout the world.

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