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As the payment industry continues to undergo significant changes spurred by strong innovation and new payment methods, online merchant risks are on the rise, making it challenging for payment providers to stay one step ahead. With an increase in data compromises and government regulations, as well as new compliance concerns, the importance of performing extensive due diligence before boarding a new merchant could not be greater.

Bringing on the wrong merchant can be detrimental to your portfolio, as you could potentially bear the burden of any fraud, card network compliance violations, chargebacks and data breaches, which can cost you extensive financial damage, not to mention legal and regulatory penalties. Unfortunately, many acquirers do not thoroughly investigate their merchants’ online presence and history of risk. The good news is that many of these potential threats can be avoided by ensuring you follow the right steps and knowing exactly what to look for during the merchant boarding process.

The following are five areas of a merchant’s history to pay extra attention to at boarding:

We all know how difficult it can be as an acquirer to monitor all of your merchants’ websites effectively. It is a costly and time-consuming process to do in-house, and regulations are constantly changing. However, choosing to not monitor your merchants can open you up to brand damage, legal liability, and card network assessments.

Here are the “Top 5 Tips to Monitor Your Merchants” from G2 Web Services, a leading provider of payment risk management solutions and expert at merchant compliance monitoring, to help you stay better protected.

Cyberlockers are third party file-sharing – also known as “file hosting” – services. Examples of popular cyberlockers are DropBox, Hotfile, MegaVideo, and RapidShare. While there are practical applications for this type of service – such as transferring documents and photos between friends, or collaborating with remote colleagues – these file sharing merchants can also pose immense risk to acquirers. Cyberlockers have been repeatedly found to be associated with brand damaging, risky, or even illegal content, including violent video and intellectual property rights infringement. This business model is currently largely unregulated and very difficult to monitor, so acquirers should proceed with caution.