Top High Risk Payment Trends to Watch in 2019

Jan 21, 2019

Customer whims and demands, shifts in the economy, consumer buying habits, and technological advancements lead to changes in the payment industry. From expected growth in cross-border shopping to advancements in artificial intelligence, 2019 proves no different for high risk businesses.

As we settle into the new year, let us talk about the top 8 high risk industry trends for 2019.

1.    Merchants Will Need to Improve Fraud Management Strategies

Merchants will need to continue to find a balance between providing a good user experience and preventing fraud. In 2019, merchants will need to remain vigilant in not allowing their fraud rules to ruin the chance to meet customers’ expectations. For example, a common red flag for fraud is an online purchase that is made with a billing address that differs from its shipping address. In this case, merchants often stop the order, look into it, and sometimes contact the credit card company to the purchase from occurring. If it was not actually a fraudulent purchase, this ruins the customer experience. As we enter 2019, merchants should use machine learning and other state-of-the art fraud solutions that explore many risk factors that do not hinder the customer experience.

2.    Cross-Border Shopping Will Soar

With projections that more than 200 million people in China will do cross-bordering shopping by 2020, this will be the time for small businesses to open themselves up to a much larger customer base. If you do not already position your business to allow buyers from all over to use their local preferred payment options, then you may be setting up your enterprise for failure.

3.    Blockchain-Optimized Dating Platforms will Thrive

Expect more porn sites and online dating apps to protect their identities by accepting cryptocurrency payments. Adult entertainment merchants often run into problems due to poor messaging behavior and fake accounts. To combat this, expect blockchain-optimized dating platforms to be used and gain in popularity. With these platforms, first payments are made with prepaid card functions through e-wallets before messages can be sent to approve interactions.

4.    The Gambling Industry Gets a Makeover

People have gotten pretty savvy at flagging lotteries, penny, auctions, and other online casinos. However, the newer, more subtle types of gambling may be tougher to spot. For instance, some sites have stepped up their games, offering visitors’ chances to win high-end prizes, like cars, luxury vacations, and electronics. This type of site may not be in your face, but it is still a form of gambling and, therefore, most be monitored to ensure they are following all rules and regulations.

5.    As Mobile Payments Continue to Grow, Customer Will Expect More

As merchants continue to integrate mobile applications and services into their business models, mobile payments will continue to soar. As they continue to evolve, customers also will expect better user experiences. To keep their competitive edges, merchants must continue to improve.

6.    Artificial Intelligence Use for Better Fraud Detection Will Grow

The use of artificial intelligence, in general, will continue to grow rapidly in 2019. Expect more to use to improve their fraud detection strategies.

7.    Nutraceutical Companies May Experience Greater Oversight

In December, the U.S. Food and Drug Administration announced that a new oversight group was formed to better monitor the dietary supplement industry. Though this move could boost safety for customers, it also is likely to lead to increased scrutiny of nutraceutical company merchant accounts and their payment processors.

8.    Dropshipping and its Results, More Chargebacks, Rise

Dropshipping is a relatively new type of product order fulfillment method that does not require the seller to maintain inventory. Instead, the seller sends the order to a third-party and that person ships the product to the customer. Unfortunately, not following the typical distribution channels can lead to more fraud and chargebacks. The sellers never physically have any of the products, and they cannot control what a third-party does once they receive orders. Therefore, customers may not get the specific items they ordered and ask for a refund or initiate a chargeback. Also, some dropshipping sites are actually fronts for the sale of illegal products.

In Conclusion

Pay attention and look out for these high risk industry trends for 2019. Merchants that stay ahead of the curve will be the ones most likely to succeed.

If you are interested in high risk payment processing and other solutions, contact EMB. We specialize in working with high risk merchants in many different industries. Apply online today.

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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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