If you Accept Mobile Payments, You Must Have Chargeback Insurance

Mobile payment apps are hot, and the number of users is growing by the day. It takes little time and effort for a merchant to accept mobile payments, but as with all good things, there is a catch. Mobile payments are prone to having more fraudulent transactions that other payment sources. We all know that one too many fraudulent transactions can leave you without a merchant account, and often, without a business. Fraudulent charge fees can take the wind out of even the most successful small business, and by obtaining chargeback insurance, you can help lessen these debilitating fees.

The biggest fraudulent issue with mobile payment systems right now is “friendly fraud”. Friendly fraud is when the purchaser knowingly buys the product, and then later claims that it was a fraudulent charge. With checks and plastic card payments it is easy to figure out if the charge is indeed fraudulent. However, since mobile payment apps use very little identifying information, many times these fraudulent claims cannot be questioned. This leaves merchants with nothing other than a big chargeback fee, otherwise known as the penalty for a fraudulent charge.

Chargeback fees are massive, and the higher the price of the original purchase, the more damage a chargeback fee can do to a business. These fees can be upwards of 270% of the original charge, which can add up if you are hit with expensive fees and multiple chargebacks. This is where chargeback insurance comes in. Much like health insurance, you still have pay a fee, but it would be a lot less than if you did not have insurance. Chargeback insurance, such as the program offered by EMB, can also help determine if the claim is indeed fraudulent, or just a case of “friendly fraud”. According to www.patmentsource.com, in 2013 merchants lost 11.8 billion in friendly fraud claims. If every merchant embraced chargeback insurance, this amount would be significantly lower.

Before signing with the first chargeback insurance option that you find, be sure to make sure that the company is the right fit for you and your business. Ask questions, and do not feel obligated to sign on right away. Remember, it is your business, and you have the ultimate decision when it comes to important financial decisions.

Let us help you get Chargeback Insurance today!

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