By: Greg Baxley, Marketing Coordinator
With 2016 nearly halfway through, there have been an array of topics pushed to the forefront of risk and compliance. From the implementation of EMV and the threat of illegal drugs and pharma sales, to the launch of Same Day ACH and the need for increased due diligence in a rapidly changing payments landscape. The following list encompasses many of the themes that have dominated the ecosystem this year.
1. EMV: Though the online payments space knew EMV would become commonplace starting last fall, the astute migration of fraud from in-store to online channels still drives anxiety for merchants. The fraud attack rate on United States merchant websites skyrocketed from 9 attacks per 1,000 transactions to 27 attacks per 1,000 transactions — a 215% increase since the October 2015 EMV liability shift, according to the Global Fraud Attack Index collaboration between PYMNTS and Forter.
2. Same Day ACH: The rise of Same Day ACH requires diligence to happen in real time, in turn making compliance with KYC regulations even more challenging. While transaction monitoring can help, it can miss key components that can negatively impact your portfolio. Utilizing business customer intelligence can help you find those missed parts and bolster your KYC program in this changing environment.
3. Illegal Drugs and Unlawful Pharmaceuticals: Violating websites have become one-stop-shops for consumers looking to purchase everything from illegal substances like spice and poppers, to counterfeit erectile dysfunction prescriptions and hair loss supplements. This category is one of the largest headaches for compliance executives in the merchant acquiring space. Trying to stay current on the forms and formulas as well as rules and regulations is beyond challenging.
4. Online Sports Betting: Daily fantasy-sports (DFS) companies have gained massive notoriety in recent months, as regulators and mainstream media attention have brought the online gambling industry into the spotlight. DFS sites have been facing examination from several government authorities over consumer protection safeguards and the legality of the contests themselves amid a range of state laws. With further scrutiny of acquirers and payment processors who must appropriately assess threats and ensure that their portfolio is in full compliance.
5. Transaction Laundering: The growing sophistication, connectedness and technological prowess of cybercriminals has grown, as they take advantage of systemic vulnerabilities and the complexity of the payment ecosystem to gain access to merchant accounts and perpetuate illegal sales activity. In the US, regulators have taken note of transaction launderers. FinCEN and FFIEC have placed a great focus on AML (Anti-Money Laundering). Eradicating transaction laundering from your portfolio is a group effort. To defeat savvy fraud rings, it has become paramount for risk professionals to break down walls within their firms, leverage service providers in new ways and harness the data and power of the entire payments community.