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Merchants and Payment Fraud: The Guide You Need

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It’s a sad reality that payment fraud is something all business owners have to think about. While we wish it would simply disappear, it’s not going to go away any time soon. The big problem with payment fraud, aside from it being a serious hassle, is the fact that there isn’t just one kind of fraud that business owners have to worry about. There are many different types, including account fraud, credit card chargebacks fraud, friendly fraud, and the list goes on and on.

It’s important for business owners to understand that they need to have strategies set up in order to help detect, prevent and manage any sort of fraud situations that may occur because when it comes to merchants and fraud? It’s not a possibility that you’ll eventually have to deal with it, it’s an absolute certainty. That’s why having a company to help you with handling fraud is so important.

It’s important to note that when a customer is compromised, they not only are going to be much less likely to come back to your establishment, they’re likely going to put reviews up giving you some negative press and potentially harming your business greatly.

Learning about credit card chargebacks is especially important because it can definitely be a huge hassle for a business owner. This is because the chargeback is actually initiated by the credit card holder which could result in a return of funds to them, even if they continue to keep the product they purchased from you or continue to use the service you sold to them.

Getting the right fraud protection for merchants is definitely important, and learning about fraud insurance is something that any business owner should consider as well. Merchants and fraud do go hand-in-hand, but with the right company, like Y2Payments, behind your business you’ll find that you don’t have to worry about the fraud as much as you would if you were handling things on your own.

For example, Y2 oftentimes deploys a technology called 3D Secure (3DS). It is a Visa/MasterCard fraud prevention tool designed to eliminate such cardholder claims. When 3DS validates a card transaction if also completely eliminate the chargeback fees for the merchant. Having a shield up between you and those who would defraud you is definitely something that can help your business.

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How to Reverse Chargebacks

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Handling chargebacks is a process fraught with frustration. You have to convince the bank that a chargeback dispute isn’t legitimate. It’s difficult – the system is built to favor customers for some good reasons. However, when credit card chargebacks should be reversed, it’s difficult to get it done easily. There is chargeback protection for merchants, like chargeback insurance. Let’s start from the beginning about what you can do.

Challenge the Chargeback

The most important step is to dispute credit card chargebacks when there’s a good reason to do so. If you absolutely know the customer’s in the right, and wasn’t provided a product or service, then don’t waste your and their time. However, if you’re in the right, then challenge that dispute. Most merchants either challenge fewer than half their chargebacks or never contest chargebacks. You should challenge every chargeback that you feel shouldn’t have been made. There’s evidence that this helps reduce the overall number of chargebacks you’ll face down the road.

Chargeback Insurance

Chargeback protection for merchants is available in the form of chargeback insurance. It was mentioned above that many chargebacks are made legitimately. These could be the result of stolen credit cards or credit card information, for instance. In this case, a merchant with chargeback insurance has protection. Such insurance policies may only cover transactions made through a particular payment processor, so be aware how and when you’re covered.

Chargeback Time Limit

Remember too that there is a chargeback time limit. Cardholders in general only have 120 days to file a chargeback related to fraud. There are time limits set up for every step of the dispute and challenge processes as well. Make sure you’re aware of all the time limits at play – they’ll vary by card and other factors – so that you’re able to assess the dispute’s legitimacy as well as your own timing and ability in responding.

For more information on Y2Payments Chargeback protection and how it works, contact us today at 888-693-1850.

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Credit Card Companies Dropping Signature Requirement

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Businesses are always looking for ways to make checkout faster. With advancing technologies and a need for faster credit card processing, many credit card companies have decided to drop the need for signatures on payment slips and checkout terminals. This makes your payment processing options even faster.

Dropping Signature Requirements

Mastercard, Discover, American Express, and Visa have all dropped the signature requirement as of April 2018. Technology and anti-fraud capabilities have advanced far enough that signatures are no longer necessary to fight fraud. This is because they’re no longer among the most effective pieces of evidence considered in anti-fraud work.

This isn’t a radical or sudden idea. It’s long been considered and weighed as an option. If anything, credit card companies have waited longer than they have to before doing away with the need for signatures.

What about Chargebacks?

The ACH payment system has no real use for signatures either. Regardless of ACH and the decisions companies are making about credit card processing, some businesses are still taking things step by step. This is especially true for high risk merchants, since signatures are still used as evidence when considering chargebacks.

There will likely be a period of time until the approach to chargebacks catches up with the dropped signature requirements. Many businesses have reported this, and so are still requiring customer signatures.

Chip cards help eliminate the risk of this, but not everyone uses them, and there’s still a need for some departments to get on the same page. When weighing whether to request customer signatures or not, try to balance your risk of chargebacks against your need for speed in your payment processing options.

Balance Your Needs

If you need to accelerate customers through credit card processing, dropping signatures achieves this. If your business risks a higher rate of chargebacks, you may wish to keep requiring signatures for the time being. Credit card companies should catch up on this sooner rather than later.

Contact Y2Payments today at 888-693-1850 for a free no risk statement review & audit!