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Blog Category: Case Study

merchant violation

Merchant fraud is a costly problem for acquirers and payment providers, with global card fraud losses reaching $11.27 billion last year, according to the Nilson Report. G2 Web Services conducted an investigative case study that demonstrated how many acquirers just one fraudulent merchant can touch. The findings were concerning, and highlighted the need for a secure, neutral location for payment providers to share fraud data to mitigate financial losses.

Post Categories: Blog, Case Study, Merchant Fraud

The following case study demonstrates how G2 Web Services, a leading payment risk management company, helped a U.S. payment service provider to identify unauthorized aggregation within its merchant portfolio, ultimately reducing its risk and creating new merchant opportunities.

Merchant Aggregation: Understanding the Problem

This particular payment service providers’ portfolio had 2,168 known merchant websites that contained higher risk online adult merchandise. The payment service provider (PSP) was enrolled in G2 Persistent Merchant Monitoring to carefully monitor its merchants for website content compliance. However, the PSP was not monitoring for aggregation, which left it vulnerable to potential violations and financial loss.

Aggregation can easily go unnoticed, as it involves an unknown merchant using a legitimate merchant account to process transactions. Without being aware of these aggregating sites, the PSP was facilitating the transactions of potentially illegal and/or brand damaging goods and services, and opening it up to aggregation assessments from the card networks. Upon learning more about aggregation risk potential and its rise in the industry, they sought help from G2 Web Services to determine the full scope of their merchant aggregation risk.

Post Categories: Blog, Case Study, Merchant Risk

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