Fraudsters Focusing on Card Testing

Jul 24, 2017

A great number of merchants in the US are being attacked by fraudsters. In September 2014, the US experienced 52% of total attack volume. The United Kingdom, China, and the Netherlands experienced 9%, 8%, and 6% of attack volume, respectively.

Statistics show that airlines (among e-commerce merchants) are most affected by fraudulent transactions. Airline merchants account for 46% of fraudulent transactions. Money transfer companies hold the 2nd place, accounting for 16% of fraudulent transactions.

From the retailer perspective, general retail and clothing retail experience 14% of total fraudulent transactions. Online computer and electronics merchants experience 13% of overall e-commerce payment fraud.

It’s critical for merchants to be able to prevent credit card fraud. Turning to a reputable payment processor like, you can enjoy unmatched Chargebacks in the industry. In partnership with Verify and Ethoca, EMB offers exceptional chargeback prevention and protection services to merchants of any type. EMB, the #1 high risk processor in the US, boasts an A+ rating with the BBB and an A rating with Card Payment Options.

Card Testing

Nowadays, the use of card testing as an effective tactic is on the rise. The 1st quarter of 2017 witnessed a 200% increase in credit card testing as compared to 2016’s 1st quarter. This is according to a study by Radial, a King of Prussia, Pa.-based omnichannel technology provider.

Michael Graff, risk analytics manager for Radial, notes that fraud rings are investing in racks of servers and developing software bots and scripts that can be used to quickly test a large number of stolen card accounts. Graff further adds that fraudsters focus on finding card accounts they can use to purchase items that can be turned into cash. According to Graff, any merchant segment will be important for criminals if they think they can resell the merchandise it carries.

Criminals “prefer” e-commerce merchants for card testing. The reason is that the card-present channel has stronger defenses as compared to the card-not-present environment. However, card testing is increasingly creating problems for charities as well. It should be noted that it’s not easy to combat test transactions.

When it comes to false positives, Graff recommends using fraud-detection technologies with human analysts who’d review transactions that may appear in the gray area between fraudulent and non-fraudulent transactions.

According to Julie Conroy, research director for Boston-based Aite Group, false positives across all merchant categories in the US made up $264 billion in 2016. Additionally, the approval rate for card-not-present transactions makes up 80% to 85%. This number is 97% in the card-present world. As Conroy notes, sales need to be improved in the card-not-present world through the reduction of false positives.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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