Sanj Kumar, luxury ecommerce business owner

Reducing Risk Leads to Financial Gains

Narrow profit margins are commonplace in industries that sell higher ticket items, so it is a high priority to make the processing of customer payments swift and secure. Unfortunately, the complex multi-channel of a business that sells high-ticket prices makes it a bullseye for cybercriminals.

The Challenge

Sanj Kumar’s ecommerce business experienced a surge in fraudulent transactions from international customers, which mostly was due to the nature of its luxury business. Experiencing regular instances of fraud was having an impact on profit margins and the future of its merchant account. Realizing it could not sustain its business this way, it looked for a merchant account provider that offered sector-specific fraud solutions and global expertise that could address all of the challenges it was facing, including international customers and sophisticated types of fraud attacks.

The Solution

Prior to engaging (EMB), the luxury online business relied on a manual fraud screening process. With a chargeback ratio of about 2%, the business was in danger of getting its merchant account terminated. After analyzing six months of transaction data to form a comprehensive view of customer behavior profiles, trends, and the effectiveness of the existing fraud prevention approach, it realized the current screening process wasn’t working, so we tapped the experts at EMB.

As a high-risk merchant, the online business looked into EMB’s chargeback mitigation tool because it was said to prevent three out of every 12 potential chargebacks. The system EMB offers is a collaboration with Verifi, its Cardholder Dispute Resolution Network (CDRN) and Ethoca’s alert system. This system really appealed to the luxury business and its fraud problems because the CDRN works with card issuers and banks, which allowed the business to resolve credit card transaction disputes directly.

This two-partner approach worked for the luxury business because it stopped losing funds due to not being notified of chargebacks or being made when it was too late in the chargeback dispute process. The beauty of this system is that the business gets notice of a chargeback with a enough to determine what steps need to be taken to reach the best possible resolution.

Based on EMB’s knowledge of the industry and broader fraud trends, it was able to recommend several other strategies it could take to help eliminate fraud.

With the help of EMB, the luxury online business had the ability to view key transaction trends quickly and easily, and obtain other valuable information that would help to implement timely and effective policy changes to its fraud protection program. Core to the new strategy was a focus on critical issues, for instance, consistently prioritizing any orders that did not have matching shipping and credit card addresses, as well as inquiring about customers who attempted to make multiple purchases of the same item.

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The Benefit

The small business has seen many advantage to using EMB’s iCheck services. In addition improved operational efficiency, the business experienced quantifiable benefits, including:

  • The business went from waiting a day or two for funds to be deposited into its bank account, to them showing up the same day as the transaction
  • Clients responded positively to the electronic check processing solution, resulting in a user increase of 15%
  • The increase in users also was significant because the business had been experiencing a higher-than-normal increase in credit card declines
  • Turning credit card declines into actual sales, boosted revenue by an estimated 20%

With all of these positives, the inclusion of EMB’s eCheck processing services was a major win for its business and its future earning potential.

Award winning.

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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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