How Merchant Chargeback Protection Can Protect You from Fraud

Apr 01, 2016

Every merchant needs to worry about their fraud risk. While many think that fraud happens to online businesses, the reality is that every merchant that accepts plastic card payments is at risk. Some believe that checking a photo ID can help, and it can, it does not protect you 100% from scammers. The ultimate protection comes from a close source: your merchant account provider.

While you may think of your merchant account provider as simply the avenue you use to accept plastic card payments, it can actually be your best bet when combatting fraud. Many merchant account providers provide merchant chargeback protection, which can help you determine whether a charge is a legitimate return, or a fraudulent charge. Many of these fraudulent charges are “friendly fraud”, meaning that a legitimate charge it reported as a fraudulent charge. This happens for many reasons; sometimes the customer does not recognize the charge, and sometimes it happens because the customer wants to see if they can get away with it. It often works, leaving you with a higher processing rate. With merchant chargeback protection, you can prevent this from happening.

Merchant chargeback protection isn’t a magical shield that swats away chargebacks and fraudulent charges. However, it does help you better understand the process, as well as learn if the charge in question is an actual fraudulent charge, or just a “friendly”. If you have suffered a chargeback in the past, you know that the process seems secretive. It should not be, but on average 58% of merchants are not notified when a charge is being investigated. This leaves you in a bind when the charge – plus up to 270% of that charge as a chargeback fee – are deducted from your account. This can set back even the most successful merchant. With merchant chargeback protection, you can fight back. You will be notified every step of the way, from the initial alert to the end decision.

A chargeback can cripple any company, and you may think that there is no way to tell if one is coming. There is, and all merchants should contact their merchant account processor to inquire about their merchant chargeback protection. It can be the difference between a successful year and a year drowning in debt.

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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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