What Are E-commerce Flag Values and Why Are They Important?

June 20, 2018


No online merchant can afford to avoid the importance and seriousness of cybersecurity. It’s one of the key elements to securing online transactions and preventing credit card fraud or cyber hacks. If left unattended, cyberfraud can leave an online business in dire straits, especially when dealing with fraudulent payments that can cause online merchants to shell out costly refunds. There’s also great potential for data breaches, an online merchant’s worst nightmare, where cybercriminals can hack your customers’ information, ruining a brand’s reputation and customer loyalty.

To avoid the pitfalls associated with having weak cybersecurity, an enhanced, multi-layered security system is needed to verify credit card authorizations. One of the best ways an online business can enhance their transaction security is through an ECI indicator or E-commerce Indicator (also referred to as E-commerce flag values).

What Is An ECI Indicator?

An ECI indicator is a flag that is placed on a transaction to indicate and verify its security status. The Electronic Commerce indicator is used to authorize payments through a level of security, depending upon the type of credit card information provided by the cardholder. It requires a two or three digit code that runs through a credit card processing network that notifies an online merchant if the cardholder’s authentication status is valid. There are specific types of ECI frameworks, depending upon the credit card network(e.g. Visa, MasterCard, JCB) that have specific rules and appropriate values that are used to authorize credit card transactions; ECI indicators authenticate all credit cards under 3D Secure(e.g. 3-D Secure includes Verified by Visa and MasterCard SecureCode).

The Importance Of An ECI Indicator

What makes ECI indicators so important to online businesses and overall transaction security, is its sophistication in authorizing different types of credit cards, preventing any and all types of credit card fraud. There are 5 ECI indicator flag values, along with several different verify enrollment and payer/merchant authentication responses.

Also, most(if not all) payment processors now require an ECI indicator as part of the authentication process. Without an ECI indicator to authorize the request, the transaction will decline, due to the inability to appropriately define the flag value of the set card.

Online merchants that utilize ECI Indicators will not only strengthen their transaction security but also enhance their authentication measures while minimizing liability.

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