Online Merchants Must Prepare for Spike in Fraudulent Activity

Nov 06, 2015

As the EMV shift takes place, cases of card present are expected to decrease significantly in the United States. According to a recent Javelin Strategy & Research study, while EMV may have a positive impacton in-store fraud, it will make instances of online fraud skyrocket. The institution points to studies done on European countries that made the switch, and how fraud migrated from POS to the web. Since online volume has grown to over 10% of all e-payments in the last three years, card-not-present (CNP) fraud has also grown. Now the question is, are online retailers prepared to fight the pending migration?

Tim Russo, fraud prevention leader for Cleverbridge, warns that online merchants with vulnerabilities will see a dramatic increase in fraudulent activity and chargebacks. He also notes that online merchants must find ways to plug security holes in fraud prevention software.

Russo’s concerns are well founded. In every country that has migrated to EMV, online fraud has jumped as fraudsters attempt to exploit online channels with weaker authentication protocols. In the UK, where the EMV liability shifted in 2005, CNP fraud increased almost 40 percent in 10 years. In Australia, CNP fraud jumped almost 20 percent in the following 2 years. France also saw an increase in the first 2 years of implementation.

Online merchants must learn about and utilize out-of-the-box security and authentication protocols to protect customer information. For example, PayPal has developed sophisticated end-to-end encryption to shield payment information. For online merchants, the best defense is still a good offense. Business owners must stay on top of security best practices and ensure their payment processors are implementing sufficient measures against fraud. Currently, there are at least a dozen security options on the market to protect e-commerce transactions, like tokenization and 3-D Secure.

In order to protect consumers, online merchants must integrate fraud prevention software into their business plans. Merchants that offer online payment gateways, must ensure the safety and of consumer information. EMB specializes in the managing of online retail merchant accounts. Start your application today and learn more about our payment solutions.

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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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