SPS Payment Systems Inc., a third-party processor of electronic credit card transactions, is now providing transaction authorization services that comply with Visa International's new fraud detection program.

SPS, of Riverwood, Ill., is one of the country's largest processors of credit card receipts for merchants, handling more than 247 million transactions last year.

The new Visa program, called Card Verification Value, strengthens SPS' fraud detection capabilities by using information encoded on a card's magnetic strip to help issuers identify transactions made with counterfeit cards.

The technology involves adding a three-digit code to the account number on a credit card's magnetic strip.

Because the code remains hidden in the strip, it is supposed to thwart criminals who lift account numbers and expiration dates from receipts so that they can manufacture counterfeit cards.

With the swipe of a credit card at a point-of-sale terminal, the data on the magnetic strip is transmitted to SPS, which forwards it to Visa for validation.

To ensure the card's authenticity, Visa checks the code against a one generated in its own system.

By adapting its systems to the new Visa technology, SPS officials said they have ensured that its merchant customer base can qualify for the lowest fee structure offered by the card association.

Compatibility Issue

"Since we are processors, we always try to qualify our merchants for the best rates," said JoAnn McCartney, an executive at SPS.

Ms. McCartney also said that instituting the program was relatively simple because most of SPS' equipment was already compatible with the new verification technology.

Ms. Sullivan is a freelance writer based in New York.

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