E-Commerce Merchant Accounts Could be in danger Unless Merchants Act Now

Sep 23, 2015

Close to 75% of Point of Sale merchants in the U.S. either aren’t ready or aren’t aware of the switch to EMV, which will be happening on October, 1st. To hackers and fraudsters, this is possibly the best news in a long time!

Since EMV cards are almost impossible to penetrate, hackers will eventually turn to e-commerce stores. It’s nothing new. The same thing was witnessed in the 90s and early on in the millennium in Europe when e-commerce was just finding its foot there. Then more recently, we saw the same thing in Canada as the country moved from the magnetic stripe cards to EMV. When hackers discovered that they couldn’t penetrate EMV, they turned to e-commerce businesses.

And, if you think that having learned from the Europe disaster and most recently the Canadian affair that Americans may be better equipped to deal with possible threats, think twice.  In fact, some experts warn that the consequences could be far worse.

In both cases, and particularly the Canadian debacle, a common threat was the “card-not-present” (CNP) fraud. Merchants trying to process cards would receive the CNP message even if a card were indeed present. It caused massive outrage and the economy suffered for several weeks.

Experts predict that the same trend could be observed in the U.S. post October, 1st. “I think it will be worse,” says Ed Black, a director of business compliance and PCI at Comodo. “With only 25% of the merchant population aware of the EMV switch, it could be a disaster.” He cites a recent Verizon report which indicates that only 29% of American merchants bother to stay PCI compliant within a year of attestation, saying that all these statistics point to a very gloomy future for merchants.

  • Upgrade operating systems – hackers are known to prey on users of older operating systems such as Windows XP. XP no longer keeps up with security upgrades and hackers won’t waste time in exploiting such weaknesses.
  • Quarterly PCI Scans and penetration testing – PCI scanning costs less that $100 per year and penetration testing can cost upwards of $7,000 per year. If you think they’re necessary, you need to invest in the two.
  • Invest in TLS certificates – it’s also important to upgrade from SSL to TLS 1.2 to better protect your computer systems.

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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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