VBV vs Non-VBV: What Business Owners Need to Know About Payment Authentication

In the United States, there were 323,459 cases of credit card fraud in the first half of 2025. Unfortunately, this was a 51% increase from the year before. 

Credit card fraud, hacking, and unauthorized transactions aren’t just a problem for consumers. Whenever a card is used for a fraudulent or unauthorized purchase, it can result in chargebacks and disputed transactions for the business. In addition to increasing the cost of processing payments, a high chargeback rate can even result in an account freeze by the payment processor.

To prevent fraudulent transactions, Visa created a program known as Verified By Visa (VBV). It involves an added layer of authentication, so your company can ensure a safe online shopping experience. 

So, what is VBV? And how can it make your business more secure? To learn more about VBV vs. non-VBV transactions, read on.

TL;DR

• With the rise of credit card fraud, companies have to be proactive about preventing fraudulent transactions.
• VBV stands for Verified by Visa. It uses 3D Secure protocols to authenticate transactions.
• In recent years, Visa has updated the name of this program to Visa Secure.
• VBV transactions first analyze the risk level of each transaction. Low-risk transactions are allowed to process like normal, ensuring a frictionless customer experience.
• For high-risk transactions, strong authentication measures are used.
• These measures may involve using an SMS code, an authenticator app, or biometrics to verify the customer’s identity.
• By using VBV, companies can reduce their chargeback rate.
• In turn, lower chargeback rates mean a healthier merchant account, fewer penalties, and a lower chance of an account hold or termination.
• Non-VBV transactions do not require the same security level. They are automatically processed without VBV’s additional verification measures, so fraudulent transactions are more likely to go through.
• In some regions, strong authentication measures are a requirement. Other areas do not require them.
• Even when these measures aren’t a regulatory requirement, they are a good idea for the security of your customers’ data and the long-term success of your business.

PayCompass can help you achieve compliant, secure payments through our state-of-the-art encryption, chargeback prevention, and excellent customer support.

What Are VBV Transactions? 

What is VBV? Verified by Visa is a program created by Visa to ensure a higher level of security for payments. In more recent years, it has been rebranded as Visa Secure. 

It uses 3D Secure VBV technology during the purchasing process. With this technology, cardholders have to verify their identity and authenticate the transaction. 

When someone makes a purchase, VBV uses the customer’s device ID, address, transaction information, and other data to determine the risk of the transaction. If the customer’s transaction is low risk, it is often approved automatically. This fast approval ensures a frictionless, positive experience for customers who aren’t considered a major risk.

If the transaction raises any red flags, additional verification measures may be required. This is done through multi-factor authentication (MFA) protocols. For example, the customer may have to enter a one-time passcode from their phone, use biometrics, or answer some kind of security question.

Once this information is provided, the customer’s bank validates it. Then, the transaction can go through normally.

Thanks to this process, businesses can ensure easy transaction processing for low-risk transactions and added security for high-risk transactions. With the added payment authentication and 3D Secure VBV technology, VBV protocols can reduce your chargeback risk and prevent fraudulent transactions.

What Are Non-VBV Transactions? 

The non-VBV’s meaning covers basically any transaction that isn’t protected through Verified by Visa’s 3D Secure protocols. For businesses, choosing to use non-VBV transactions results in added payment security vulnerabilities to worry about.

With VBV security, you get added payment authentication for your high-risk transactions. Non-VBV transactions don’t offer the same security. Even with large or unusual transactions, no authentication is required.

As a result, non-VBV payments have a higher risk of chargebacks and fraud. Over time, this can result in higher costs for businesses. 

When you use VBV, the liability shifts away from the merchant and toward the issuer. Non-VBV transactions are the opposite. Liability rests with the merchant, so any instances of fraud will cut into your revenue.

The Importance of Strong Customer Authentication 

Strong customer authentication is essential for ensuring customer confidence and the integrity of your payment systems. 3D Secure by VBV is one of many different authentication options you can use to prevent fraudulent transactions.

Prevent Fraud and Unauthorized Transactions

When you use VBV, there is an added layer of authentication for high-risk transactions. For example, a customer may be required to authenticate their card-not-present transaction with an SMS code or an authentication app.

If you deal in digital goods, subscription services, or similar high-risk industries, VBV protocols reduce your risk exposure. This added protection prevents financial losses for the customer and the business.

Improve Customer Trust

No one likes discovering unexpected charges on their credit card statement. If you didn’t authenticate the transaction, the customer can blame you for the losses. Besides leading to dissatisfied customers, this can also damage the confidence that customers have in your business.

Even if the customer’s financial data isn’t compromised, VBV can improve customer trust in other ways. When each customer goes through the checkout process, they’ll see the added authentication and security measures. For security-conscious consumers, this can increase the amount of trust they place in your business.

Reduce Chargeback Costs

One of the most important aspects of using VBV is that it decreases the likelihood of chargebacks. Better authentication prevents fraud, which is a major source of disputed transactions.

Another factor when choosing between VBV vs. non-VBV is that it shifts liability away from your business. With non-VBV, liability resides with the business. Using VBV transactions shifts the liability to the issuer, reducing your financial exposure.

Thanks to the fewer chargebacks, your company can spend less time and money on handling disputes. It also helps you maintain your chargeback rate within the threshold allowed by your payment processor.

Improve the Health of Your Merchant Account

For your business’s future and long-term stability, you need a healthy merchant account. If you experience frequent chargebacks or fraud, it can result in penalties with your payment processor, higher processing fees, and the termination of your account.

By using strong customer authentication measures, you can support the health of your merchant account by reducing your chargeback rate and improving your risk profile. Besides supporting your compliance with regulatory standards, authentication measures can prevent reserves or account holds. 

Ensure Regulatory Compliance

In many regions, authentication measures are a regulatory requirement. Depending on where you operate, adopting VBV protocols can help you ensure your legal compliance with local laws.

Protect Your Brand Reputation

If enough fraudulent transactions occur, it can directly impact your company’s reputation. Strong authentication measures help to boost customer loyalty and encourage positive reviews.

Key Differences Between VBV vs. Non-VBV Transactions

Whether you want to understand the non-VBV meaning or the impact of VBV on liability, the following comparison of VBV vs. non-VBV can help you take a closer look at how these two security styles compare to each other.

	VBV Transactions	Non-VBV Transactions
Authentication	VBV transactions require an extra layer of authentication, which makes them more secure.	Besides providing the card details, there are no added authentication measures involved.
Chargeback Liability	Following successful authentication, chargeback liability is often lessened for the merchant.	The merchant is typically responsible for chargebacks that occur due to fraud.
Fraud Protection	VBV makes fraudulent transactions extremely difficult, so it provides a strong level of protection.	Non-VBV transactions involve no extra security against fraud.
Customer Experience	Because of the added authentication measures, the process can be slower and cumbersome.	The checkout process is smooth and fast for the customer.
Transaction Approval	Approval rates may be lower if the authentication process fails.	Often, non-VBV transactions have higher approval rates because added authentication isn’t required.
Conversion Rates	Because authentication processes can sometimes fail, it can negatively impact conversion rates.	Conversion rates can be higher, but this can also lead to high rates of fraud as well.

Do All Online Merchants Have To Use VBV Payment Authentication?

Not all online merchants have to use VBV payments. However, there are specific regions where it may be a regulatory requirement. Under the Payment Services Directive 2 (PSD2), the United Kingdom and the European Union require strong customer authentication. Similarly, individual payment processors may require businesses to adopt VBV to help reduce the risk involved.

Although VBV payments are generally not a requirement, it’s generally a good idea to adopt VBV measures. This program helps to protect your customers and your business, so it can help you avoid added costs and stress in the long run.

How Is Verified by Visa Different From Visa Secure? 

If you’ve been searching for answers to “What is VBV?”, you may have also encountered information about Visa Secure. VBV was the older program name for the Visa Secure program. Anything you see that mentions Visa Secure is just VBV under a different name.

In the new iteration, Visa has adopted more cutting-edge security measures. Thanks to its improved 3D Secure protocol, Visa Secure can provide advanced authentication levels. From AI-fueled risk assessments to biometrics, Visa Secure offers next-gen security features for merchants.

How PayCompass Supports Secure, Compliant Payment Solutions

When it comes to online and offline transactions, it’s essential to invest in the best level of security possible. If a card number gets into the wrong hands, it can lead to fraudulent transactions, dissatisfied customers, and increased liability.

At PayCompass, we use state-of-the-art encryption and strong authentication requirements. As a result, you can be sure that your customers’ data is protected. When you partner with our team of expert payment processors, you can expect the following benefits.

• Strong Customer Authentication Support: PayCompass has built-in support for different authentication protocols, so you can easily incorporate these measures into your payment processing systems.
• Fraud Prevention Techniques: At PayCompass, we have advanced fraud detection and mitigation measures in place. From chargeback prevention to real-time risk scoring, we can discuss all the ways we’re working to keep your transactions secure.
• Compliance Tools: Each region has different laws and regulations, so it’s essential to have someone on your side who understands the latest compliance requirements.
• Scalable Solutions: PayCompass can help businesses of all sizes. We grow with you, ensuring the highest level of scalability possible.

Final Thoughts

From 2023 to 2024, the rate of credit card fraud jumped by 7.8%. As cases of fraud continue to rise, it’s important to be proactive. Customer authentication measures can deter criminals from using stolen cards at your business. VBV and Visa Secure are able to prevent fraud by requiring extra authentication for high-risk transactions. 

Besides being better for your customers, these added security measures also support your bottom line. Each time you process a fraudulent card, it impacts customer trust and can lead to bad reviews. With enhanced measures, you can build customer loyalty.

Deterring fraudulent transactions reduces your chargeback rate, improves your risk profile, and minimizes your financial losses. Plus, VBV can protect your brand image and reputation. 

If you’re ready to take the next step in setting up strong authentication measures at your company, reach out to our team of merchant account experts today.