The Shift To Digital Payments And Accounts Holds Risk for Businesses

Oct 20, 2020

The Covid-19 outbreak has ushered in a dramatic surge in digital forms of payment. This is great news for e-Commerce businesses. However, along with the dramatic boost in online sales, there is also an equally dramatic boost in cases of fraud to contend with. 

The sudden acceleration in fraud was fueled by the fear and uncertainty that millions around the world were and are still currently experiencing. Fraudsters have upped their game to swindle both businesses and customers out of their funds through: fraudulent account openings, malware attacks, ransomware, business email compromise, and mass phishing schemes. 

Consequently, according to the Federal Trade Commission, the pandemic-related losses due to fraud has amounted to a whopping $68 million, since the beginning of the year. 

Businesses Still Falling Short In Detecting Threats

Due to the current state of businesses and their constant struggle to survive the pandemic, many are simply rushing to implement new platforms in order to expedite more digital transactions. 

In spite of their good intentions, the core of the issue is that most businesses are still dependent on outdated fraud prevention solutions. This cannot possibly tackle the alarming rate of new account openings, the sheer mass of availability of personally identifiable information (PII), and of course the ever-present threat of innovative and sophisticated identity fraud schemes

For instance, to verify a customer’s identity, many businesses still use “static PII” like “credit header data”, coupled with an email or phone number. Where businesses miss the mark is they neglect to investigate the email and phone number. For example, they must look at the phone number associated with the email address when it was created. They also fail to research their social media accounts to further examine the individual. By taking the time to follow these procedures, businesses can easily detect any suspicious inconsistencies and therefore catch “fraudulent identities”. 

Equally disturbing is the current practice of enrolling customers online without proper and advanced verification techniques. This itself is a disaster waiting to happen. Fraudsters will take this opportunistic situation to drain the business of its resources and vanish. 

What’s worse is that, since the rate of online accounts have soared since the pandemic, many businesses have dramatically lowered their criteria to adequately verify all these new identities. There is no doubt that this negligence will lead to a startling array of fraudulent accounts further down the line.

It is clear that, if there is an ongoing trend where fraudsters have been taking full advantage of security holes, it will only get worse if businesses continue to do nothing. 

It’s not simply about getting new accounts into the virtual door, in order to fully scale their current, virtual platforms, businesses need to acquire powerful data sets and measure this information in real time. Businesses also need to discover which elements of PII are in conflict with the individual. This will grant the necessary informational arsenal to act accordingly. 

Too Serious To Ignore

More businesses should take a proactive approach in implementing more sophisticated and robust fraud prevention solutions. They need to take a more defensive approach and not just focus on the numbers. Doing so will ensure they not only survive but thrive during these uncertain and unsettling times. 

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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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