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merchant onboarding

From gaps in healthcare delivery to supply-chain bottlenecks, the pandemic has illuminated shortfalls in many established in-house systems. For payment providers, pivoting to a remote workforce introduces additional risk into the critical Know Your Customer (KYC) component of the merchant boarding and underwriting process.     Automated KYC Risk professionals know that manual KYC due… read more

The Many Faces of Merchant Bust-Outs

According to ACI Worldwide, 50% of bust-out merchant fraud cases go unnoticed. Bust-out merchant fraudsters rack up high volumes of illegal transactions and then disappear, leaving others responsible for the subsequent chargebacks. As in a masquerade ball, fraudsters are able to go unnoticed, appearing to blend in as good merchants. Since different types of bust-out merchant fraud takes advantage of different aspects in the payments processing cycle, knowing the different types of merchant bust-out fraud can help lower the rate of undetected cases.

Post Categories: Blog, News

A Look at Merchant Bust-Out Fraud

Highlighted by the breaches at Target, P.F. Chang’s and most recently StubHub, it seems the frequency of merchant fraud increasingly is making headlines. With that surge, it’s important to take a closer look at the different types of fraud you may encounter in order to be better prepared to combat them. Bust-out merchants, for instance, can be hard to spot as they have learned and adapted in order to go longer unnoticed.

Post Categories: Blog

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
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

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