Flaws With Fraud “Proof of Concept” And A Likely Remedy

Mar 26, 2021

When it comes to choosing the best and most effective fraud solution for your business,  you must determine your unique business needs first before you seek out a solution. Once you have done that, a trial needs to be performed in order to see how it interacts with your data. The only way to judge how that solution “performs” is to integrate and run a Proof of Concept or (POC).

Fraud is undoubtedly the most menacing foe to any merchant and it continues to grow in prevalence. The most common types of fraud that merchants have to contend with include: card cloning at 35% and unauthorized ATM transactions at 33%. The majority of fraud is reported within the e-Commerce space. 

There are more than 4 million cases of e-Commerce fraud that are reported every year and a total of $250 million “embezzled”. This type of cyber fraud includes stolen credit cards, as well as information taken from customers, which has gone up by 25%.

In December 2018, credit card fraud increased by 69%, a significant risk to users. 

Testing A Fraud Provider

When it comes to actually testing and evaluating a fraud provider, the process can prove to be quite costly and a merchant’s integration budget is limiting. 

The solution to this problem is running a robust Proof Of Concept test. Merchants should seek out and consult with their fraud solution provider to determine what is required to ensure optimal performance. Some of the points of discussion include: how profound an integration is needed and the length of time necessary to run. 

Payment Orchestration 

Payment orchestration is the newest solution that has been introduced into the payments industry. Basically, payment orchestration is the process of directing payments to the most effective processor for each transaction. This type of routing offers a wealth of benefits including reduced cost, improved speed, and reduced false positives. Furthermore, it is a framework in an “agnostic third party” or a merchant that links a variety of solution providers to the merchant’s overall system. 

Although payment orchestration was originally limited to larger merchants, with in-house payment teams performing integrations into legacy systems, the system itself has been historically inefficient and a bit cumbersome to manage. 

However, the landscape is improving and the market has been producing more modern payment orchestration platforms (POPs). These new and improved platforms now take all the critical payment functionalities that the merchant needs stacks them together in a much more efficient streamlined way. As a result, they are unleashing a boost of revenue, providing an improved checkout experience for customers, strengthening security, and liberating time and resources for merchants. 

The Future

Looking into the future, it is clear that payments technology will continue to evolve within the next 5 years. Payments orchestration, in particular, will see steady growth as it picks up momentum. This will greatly benefit small and medium-sized businesses. 

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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.