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Blog Category: Merchant Risk

Did you know that all contact lenses – even decorative non-corrective contact lenses – are considered prescription-only medical devices in the US? That’s right! If a merchant is shipping contact lenses (even crazy vampire-eye lenses!) to the United States without properly requiring a prescription, then that merchant is violating US law and at risk of breaking card… read more

Federal Trade Commission Fines Herbal Company $12.8MM Recently, the Federal Trade Commission (FTC) announced its first case challenging an independent retail website in the use of fake paid reviews (See Figure 1). Cure Encapsulations, Inc., and its owner, Naftula Jacobowitz confirmed allegations that they had indeed made false and unsubstantiated claims for their so-called “fat… read more

risk management

The evolution of merchant compliance and risk management are themes that stemmed across all topics covered last month at the 10th annual Risk Summit Series in Riga and London. Payment industry professionals that represented organizations such as, the US Food and Drug Administration (FDA), National Association of Boards of Pharmacy (NABP), Alliance for Safe Online… read more

Recently, the Justice Department made public a legal opinion that has re-interpreted the federal Wire Act to include all forms of online gambling, not just sports betting. In doing so, it reversed a 2011 opinion on the Act, which established the law as applicable to only sports betting (See Figure 1). At this point, the… read more

– January 22, 2014 –  Allied Wallet, a G2 Web Services client, uses Global Boarding to dig deep into its potential merchants’ histories to uncover hidden risks and make more informed boarding decisions. Due diligence during the boarding process is the first line of defense when it comes to protecting a company’s merchant portfolio from financial loss due to risky merchants. With the increasing demand for a quick turnaround time at boarding, the careful balancing act of thorough due diligence along with the need for speed at boarding is a rising challenge. G2 Web Services developed Global Boarding, a fast flexible due diligence solution precisely to solve this problem.

Fraudulent merchants are abundant during the holiday season, profiting from consumers’ generous spending during the most lucrative shopping days of the year.  According to a report by ComScore, online retailers are estimated to bring in over $52.2 billion during November and December in the U.S. alone. The volume of transactions in such a short period of time is the perfect breeding ground for fraud schemes that can hurt acquiring banks and payment providers. Not only do the holidays bring an increase in merchant fraud, but they are also a popular time for merchants to add non-compliant goods to their websites, as these can often be very profitable. Monitoring merchants for compliance and fraud is imperative for acquirers and payment providers during this busy shopping season to prevent possible brand damage and financial loss.

The payments industry continues to make advancements in fraud prevention and protection, leaving fraudsters to find more creative ways to cheat the system. One of the fastest growing fraud schemes today is bust-out merchants, fraudulent merchants that rack up transactions, steal money, and then close down shop before being caught. By the time the acquiring bank receives a chargeback notification, the merchant is already gone, leaving the acquiring bank responsible for chargebacks and any additional fees they incur as a result.

Post Categories: Blog, Merchant Fraud, Merchant Risk

Data mapping has increasingly become one o­­f the most important tools to identify and manage merchant risk in the rapidly shifting payments landscape. When reviewing a merchant application and its basic business information, there is much more than meets the eye. Often, there lies an entire network of connections between the merchant and existing domains, directors, IP addresses, third party providers, and risk history. Why does this matter? Well, if it is possible to identify relationships or connections between a new merchant on the web to current or previous entities, it’s possible to gather enough data to predict what risk they present to an acquirer or payment provider. Prediction rather than reaction is essential in mitigating merchant risk and fraud, both at boarding and throughout a merchant relationship.

Post Categories: Blog, Merchant Boarding, Merchant Risk

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