Why You Need Chargeback Protection

Jun 09, 2017

No matter you’re a subscription-based business or e-commerce store, chargebacks can create major problems for your business. E-commerce business owners consider credit card chargebacks awful. However, if you prepare ahead of time and use a reliable chargeback prevention system, a chargeback will never hurt your business and can be prevented easily.

What Are Chargebacks?

A chargeback begins when a customer files a dispute with his/her bank concerning a credit/debit card transaction. The problem stems from the fact that the merchant is left out of the dispute process or is notified too late.

Unfortunately, the number of customers who prefer not to inform the merchant of the dispute is growing. 58% of merchants are never notified of the pending dispute. As a result, merchants become helpless and unable to protect themselves against the initial chargeback.

Chargebacks are among the fastest-growing forms of online retail fraud. According to the analysts in the field, it’s estimated e-commerce fraud (chargebacks, identity theft or newly organized campaigns such as “card testing”) is increasing by 30% annually. Card testing refers to those cases when stolen card numbers are tested first on small purchases.

Recent Statistics

Based on a recent survey by the Centre for International Governance Innovation (CIGI), in collaboration with the United Nations, consumers all over the world are becoming more cautious of online transactions because cybercrime and privacy breaches are becoming more widespread. However, there is nothing showing that e-commerce is slowing down.

Online sales in the US are growing by over 9% year over year and are projected to account for $523 billion by 2020. In the US, 90% of all internet users purchase a thing using the Internet at least once on a monthly basis.

Chargebacks alone now result in $40 billion in lost revenue on a yearly basis, comprising almost half of all online retail fraud.

According to a risk management firm, 58% of cardholders file a transaction dispute without contacting the merchant before doing this. 28% contact the merchant after they have already filed a dispute. As the co-founder of the firm notes, 86% of chargebacks may be caused by friendly fraud.

The term “friendly fraud” stands for those cases when a customer makes a purchase with his/her own credit card, receives the merchandise and then files for a chargeback.

Chargeback Protection from Emerchantbroker.com

Emerchantbroker.com (EMB), a reputable payment processor, has partnered with Verifi and Ethoca to provide merchants with the very best in chargeback prevention services. As a merchant chargeback provider, EMB offers an unmatched alert and prevention system in the industry. Thanks to the system, merchants get notified when disputes occur.

Verifi’s Cardholder Dispute Resolution Network (CDRN) enables merchants to be notified immediately and decide whether or not they should be refunded or decline. EMB is voted the #1 high risk processor in the US and is rated A+ by the BBB.

 

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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 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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