By: Greg Baxley, Marketing Coordinator
The digital payments ecosystem is a complex, interconnected and ever-changing network that is exploited by criminals but can also be leveraged by risk professionals to defeat them. Merchant fraud is evolving at lighting pace, often leading to powerful global crime syndicates set up to evade legacy risk and compliance strategies. Think of it this way: fraudsters manage the risk of detection by building complex webs of sites and relationships; when one is taken down, they redirect their energy elsewhere.
In this context, the old ways of managing merchant risk and compliance — with siloed teams, each bank working as an island — are no longer sufficient to defeat sophisticated bad actors working in groups. Every risk team, compliance group, PSP, gateway, service provider and card network has a piece of the puzzle that gives us all the clearest picture of merchant risk and helps promote safe, profitable commerce. To defeat savvy fraud rings, today’s risk professionals need to break down walls within their firms, leverage service providers like G2 in new ways and harness the data and power of the entire payments community.
G2’s CEO Allison Guidette will open up the G2 Merchant Risk Summit 2016 conference in London with a special keynote on the power of payments connections. When approaching your merchant portfolio this year, Allison recommends consideration of these key takeaways:
- When you (independently or with the help of a vendor like G2) identify a potentially fraudulent merchant, look for copycats or related entities. Don’t stop with the first discovered case.
- Fight fraud rings that may be working with multiple banks, with data! Ensure you are working with service providers that have a view across multiple acquirers to spot fraud trends that span banks and geographies.
- Break down siloes inside your own organization — work regularly with sales to improve pre-application diligence (e.g., does the merchant have inventory to support proposed sales levels?) and customer service to identify suspicious behavior or calls. Always conduct cross-departmental post-mortems when problems arise.
- G2 and the G2 Merchant Risk Summit are rich sources of connections and community among acquirers, processors and partners. Let G2 help you to connect the dots.
We’ve seen levels of transaction laundering rise significantly over the past year, and with card scheme guidelines, and the FTC paying attention; due diligence has never been so paramount. Learn more about these industry threats with the Cleaning Out Transaction Laundering webinar, available on demand, and the Spice Syndicate case study.