Mitigating Fraud, Safeguarding Merchants Amidst Digital Shift

Dec 04, 2020

The year 2020 will forever be remembered as a year of considerable change, one that has pushed people and commerce into extremes never before seen in the history of the world. 

Interestingly enough, at the advent of this year, our unemployment rate was enjoying a notably low rate. It was only at 3.6 percent. The GDP was increasing at a robust pace. Businesses, both large and small operations were also growing at a healthy rate. 

Suddenly, the COVID-19 pandemic, originally unique to China, hit us stateside, leaving everyone completely blindsided. With subsequent lockdowns, social distancing measures followed. Businesses were forced to shut down and daily lives completely altered. Between the months of January and April, an alarming 20 million Americans lost their jobs. 

More change was upon us. With businesses finding themselves without profit, the GDP collapsed in double-digit percentages. Many were forced to work from home. According to PYMTS.com, 144 million consumers have completely shifted to online shopping. This change is predicted to be permanent. This has also forced many businesses to shift their brick and mortar operations entirely online. 

As More Consumers Flock Online, Businesses Must Up Their Cybersecurity Game

Thanks to the pandemic, millions of consumers are turning to purchase online, yet the digital space is replete with potential fraud. Fraudsters have become quite adept in taking advantage of vulnerable and insecure websites. However, the majority of these risks originate from a “lack of cyber hygiene”, using poor passwords, utilizing out-dated software, or clicking on links that are unsafe. 

Other potential threats that loom in the digital horizon include “credential stuffing”, synthetic IDs, and account takeovers. 

To attack this issue, Mohamed Abdelsadek, Executive Vice President of North America services for Mastercard suggests that all digital environments should be protected through a “layered approach”. It is one that protects the environment and customers before, during, and after the payment transaction is made. He refers to this as a “connected intelligence”. It is based on the idea that businesses must secure the digital environment without generating any friction for consumers. In addition, it requires a “data collaboration approach” between issuers and merchants to allow higher payment approval rates and less fraud. 

Looking into the future, cyber threats may not look too different from what is currently being witnessed today. However, the volume of traffic online as well as the human element will be dictating the absolute need for developing a “secure digital ecosystem”. 

Merchants must become acutely aware of possible cyber threats internally as well as those found in third-party vendors, and internal stakeholders. Additionally, employees must be educated on prevention through the creation of “cyber hygiene programs.” Collaboration with essential stakeholders on the optimization of “decisioning” at the point of sale will also be critical. 

Since small businesses have been the hardest hit by the pandemic, Mastercard is assisting its partners by granting them access to cybersecurity resources to protect their systems today and in the future. Back in April, Mastercard committed $250 million over the next five years to support businesses in the US and other markets. The support comes in the form of access to all important resources to protect both their businesses and employees, using “cyber vulnerability assessments” and identity theft protection. 

The Future Ahead

Businesses of all sizes and industries must remain agile and vigilant during these difficult times ahead. With the number of consumers using the internet to purchase their needs, the volume of online purchases are only expected to grow, even post-pandemic.

If businesses want to remain in business, the answer is clear, they must be ready to invest and build both robust and resilient cybersecurity programs to combat the growing number of cyberattacks. 

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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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