The Importance of Fraud Protection

fraud protection importance y2payments

A 2016 Nilson Report estimated that fraud losses related to credit cards topped $24.71 billion in that year alone. Those numbers have only increased since that study was done, and businesses like yours simply can’t afford the cost of fraud today. In fact, one survey found a small business will spend nearly $40,000 just to recover from a security breach. As fraud becomes more and more relevant to companies in nearly every vertical, learning how to protect your company from fraud is essential. These tips can help.

Move to Chip Cards

EMV chip cards can help you with credit card fraud protection. The United States has one of the highest fraud rates of any other country today, and a big part of that has been its slowness to move to the EMV chip system, something many businesses are just starting to do. The UK saw nearly a 70% decline in fraud when they moved to the same system. You’ll need to talk to your processor to get the required equipment, but it could help you create a consistent cardholder experience and avoid liability.

Watch for Potential Problems

If you’re handling a card present transaction, keep an eye out for potential signs of fraud, and train your employees to do the same thing. Simple things like a customer purchasing a large number of pricey items or trying to rush you through a sale when it’s closing time are indicators you may be processing a fraudulent sale.  Having a customer who tells you their card is damaged may also indicate a fraudulent sale.

Follow the Right Procedure for CNP Transactions

If you process a lot of online sales or you take orders over the phone, you’re processing CNP, or Card Not Present, sales on a regular basis. Take a few extra precautions with these kinds of sales. Watch for orders that include several items of the same type or nature. You should also take extra care with orders that are made up of bigger ticket items. Rush orders, too, can be a problem, as are those that fail the Address Verification Service you’re using. International orders may pose a problem, as may orders that have made multiple attempts to pass through your system.

Keep Friendly Fraud in Mind

Friendly fraud is just as dangerous as any other type when it comes to your business’ costs. This happens when a customer asks their bank to issue a chargeback, even if the refund is unwarranted. Chargeback fees can be incredibly damaging to a company, but it’s really easy for a customer to initiate. Often, credit card websites display a “Dispute” button next to every single transaction, and you not only have to give the customer his or her money back, but you also have to pay a chargeback fee of as much as $50 per transaction. It’s tough to reverse chargeback fees once they’ve gone through, too. Good communication with your customers from the start can help, as can setting clear expectations about the sale from the outset. Even taking an added step like confirming that shipments successfully reached your customer is a helpful step.

Report Fraud

The final step in protecting your business from the costs of fraud is to report it the moment it happens. If you suspect that you’ve processed a fraudulent transaction, be sure to call the credit card’s authorization center at that moment. Tell them you have a “Code 10 authorization request.” If the customer is still with you, be sure you remain calm and avoid alarming him or her. Hang onto the card if it’s possible. The operator will ask you a series of questions, and if necessary, you may be asked to contact the police. It’s also important you contact your bank and your credit card processor at some point after you’ve discovered fraud occurred.

Credit card fraud is a growing problem, and the single best way to prevent it within your company is to continue learning how it might occur and what you can do to save your company from the hassle of dealing with it. Because fraudsters are continually changing their tactics, you may want to consider reading fraud prevention blogs and even attending webinars that could help on a regular basis.

For information on how Y2Payments system works, give us a call today at 888-693-1850.

Fighting the High Risk Merchant Account Label

High Risk Merchant Account Y2Payments

It’s happened to many businesses.  Don’t worry – it’s not just you. You’ve applied with a few credit card processing companies, and time after time, you’ve been turned down.  Endlessly, the label “High Risk Merchant Account” has been thrown around in the paperwork.  How can you dump that label for good and begin processing your customers’ credit cards?  It’s easier than you think.

Understanding the Label

A high risk merchant account is one that the processing company doesn’t trust.  There could be a number of reasons for a label like this one.  It’s possible the processing company is just a bit risk averse.  It could also be the industry you serve.  Non-traditional sales and marketing tactics can make a company concerned about your ability to do business.

Working within an industry that has a high instance of chargebacks may be the key behind the label too.  Adult entertainment companies, for instance, are often labeled that way.  Gaming companies are too. And collection agencies.   One other reason you may have gotten that label is your own personal credit profile.  If you’ve worked with a processor in the past and gotten a high number of chargebacks or you simply have bad credit, a traditional processing company may not be willing to work with you.

Start Doing Business Now!

Fortunately, the label doesn’t have to stay with you for very long.  Even if you’ve been turned down by several companies, it is possible to move forward and begin processing your customers’ cards right away.  Y2Payments specializes in working with customers who have been previously labeled as high risk by other processors.

The Future

To avoid a label like “high risk” in the future, there are some steps you can take. Working with Y2Payments is a good step forward, but another one is to ensure that you avoid chargebacks if it’s possible.  You lose profit.  You lose merchandise, and you’re responsible for the chargeback fee.  it really is a lose-lose situation, and ensuring that it doesn’t happen to you is a must in the world of credit card processing.  And Y2Payments has an exclusive chargeback handling algorithm that can eliminate them.

To learn more about how we can help, no matter what your industry or current risk profile, contact us today.