As an ISO or Agent Partner How You Can Help Your Merchants Avoid Credit Card Fraud?

When you sign up businesses with merchant accounts, you build a risk factor into your fees and rates. Even so, no one wants to have credit card fraud occur. It hurts the merchant who loses the money, and it hurts you to deal with the chargebacks and lost fees. Instead of leaving all of this to chance, work with your merchants to help them prevent as many instances of fraud as possible.

How Credit Card Fraud Happens

To prevent fraud, you need to know how it happens. The most obvious example is someone presenting a stolen card. In person, unless you know all your customers, you can't know at a glance whether a person is using his or her own card. You ask for signatures, but you likely are not an expert in handwriting analysis.

Online it becomes even more difficult to prevent this. Customers type in card information, and your system processes it. Without a person in front of you, you are not able to look at body language or verify anything beyond what the person is entering into your payment processing system. Committing credit card fraud becomes almost too easy.

Follow-Up on Red Flags

You can manage some of the risks you may encounter. One way of doing so is to make sure you require information upfront. This includes checking for an ID on purchases and requiring additional information to be provided at online checkouts. Your processing should be able to collect level 2 or level 3 data from your phone, which gives you some of the data points like shipping address and invoice numbers. You gain the ability to track shipments and make sure items arrive, limiting instances of friendly fraud. Have a process in place to make sure you collect all the needed information on your payments.

Beyond this, you can often identify potential security concerns. Large orders or orders that include expedited shipping requests might give you a reason to confirm the information and check on the identity of the purchaser. Odd body language at an in-person transaction could also put you on alert. If you see signs of unusual activity, you can call the card provider and check state-issued ID cards to help confirm identity as well.

Protecting Your Merchant Accounts

All these added checks have the potential to inconvenience your merchants or their customers. Even so, a minute or two to confirm that a payment is being properly submitted should be worth it to everyone involved. Work as well with your merchants about a payment agreement that outlines the return policy; this can head off instances of friendly fraud before they occur.

Ultimately, avoiding fraud is in everyone's best interests. Work with your merchant accounts to help keep credit card fraud to a minimum.

As an ISO or Agent Partner How You Can Help Your Merchants Avoid Credit Card Fraud?

About the Author

Gigi Beyene, SVP of Sales Channel Management

With Nuvei since 2007, as an expert in strategic channel development and partnership management, Gigi’s collaborative techniques and leadership have helped ISOs both launch and grow successful merchant portfolios.

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