Ri$k Management is more than protecting the merchant against financial loss due to fraud. With increasingly tighter rules and regulations for accepting and processing credit cards, finding and keeping an acquiring bank is paramount.
The loss of an acquiring bank can spell financial ruin for an e-commerce merchant. The banks are exposed to significant financial ri$k as well as large fines for violating the myriad governmental and institutional rules.
Consequently, securing and maintaining relationships with acquiring banks is a primary component of our business.
GPN Data Ri$k Management
GPN Data employs many ri$k management tools, including those that are commercially available and some of our own creation. However, there is more to ri$k management than applying a tool. Following is a partial list of how we approach ri$k management.
Employ the right people – The staff at GPN Data is carefully selected, not simply to assure that we have trustworthy employees, but to find and retain people who take their jobs seriously and be ever aware of unusual activity.
Facilities – Our servers are hosted in a state-of-the-art facility with security beyond the scope of PCI-DSS. The building was designed as a hosting facility before ground was broken, not a warehouse converted for this very specific type of use. We share this facility with large banks, investment companies and insurance companies.
Software – Our Gateway was custom designed for our use and based upon our years of experience is processing CNP (Card Not Present) transactions. We utilize multiple layers of intrusion detection, both hardware and software based, keeping the systems updated with the latest versions to guard against unauthorized access. Automated monitoring programs are constantly vigilant, alerting us if there is any suspicious activity.
Partner with quality merchants – Our Sales and Ri$k Management staff review all new merchant applications to assure that the companies with whom we do business are legitimate merchants and not a front for illegal activity or misrepresenting their business.
Experience – Over the years we have developed a series of “blacklists” of people who are known for fraudulent activity, cards known to be fraudulent, BIN numbers with High chargeback ratios and countries known as havens of those who commit fraud.
Ri$k management tools – as mentioned earlier, we subscribe to several well know services to collect data about every transaction we process to assist us in automated decision making.
Analysis Tools – GPN Data has created many tools and processes to look for unusual activity from a cardholder. These tools are configured per merchant based upon the business model and the goods or services sold. The configurations are constantly “tweaked” to keep up with the changing activities of the merchant.
3DS (3-D Secure) – We offer and highly suggest making use of 3DS, the cardholder authentication system created by Visa and MasterCard and now in use by other brands. Please see the full explanation of 3DS on this website for more details.
Merchant Ri$k Management
The best weapon in our ri$k management arsenal is you, the merchant. Based upon our successful relationships with many merchants representing diverse market segments, we would like to share some tips for how you can reduce your ri$k, even if you choose not to partner with GPN Data.
Introduced as a consumer protection device over 40 years ago, the Chargeback poses the greatest threat to the economic success of you, the merchant. Not simply because you are saddled with fees in addition to the amount of the sale that is taken from you, but every chargeback could be the one that elevates your monthly chargeback ratio to the point that you lose the ability to accept credit cards.
Let us first examine the source of chargebacks and then we can discuss how to reduce the chargeback ri$k.
Sources and root causes of Chargebacks
Buyer’s remorse – One of the most frequent causes of chargebacks, the cardholder made a snap decision and spent money on something he does not need or want.
Stolen or Lost Card – (This includes counterfeit cards on a legitimate account.) The card has been lost or stolen (or cloned) and the actual accountholder did not know until they saw the statement.
Chargeback Abuse – This is one of the most aggravating of all the chargeback. In the USA, this type of chargeback is common. Teemed with buyer’s remorse, this type of customer sees the chargeback as their own personal cash machine.
Do not recognize the Descriptor – The description on the cardholder’s statement was not from a source they recognized
Did not receive the goods or services – The buyer did not receive what they paid for
Unsatisfied with goods or services – While this can happen to any merchant, there are some steps you can take to avoid the chargeback
Tips for reducing Chargebacks
Ideally, merchants and banks would like to see a chargeback ratio with a bunch of zeros to the right of the decimal point. The reality is, chargeback happen! The suggestions below are in no particular order, because your circumstances are different than any other Merchant.
1. Display your “Customer Service” contact information on your website where it is easily found. At a minimum provide email address. Ideally, provide a phone number with hours that it is answered. Be certain to respond to the email and the phone! If you are lucky enough that the customer contacted you, try to resolve the customer’s complaint immediately! Many will file a chargeback without calling or writing. Treat the ones who call with respect. If the customer is not satisfied by a single phone call or email response, issue a refund immediately. Think of the refund as “chargeback insurance”.
2. Be certain the Terms and Conditions on your website are accurate, reasonable and clear. Do not try to “hide” the final cost. Display prices and fees in bold. Clearly state your return and refund policies and be certain they comply with the laws of the jurisdiction where the cardholder resides.
3. Be certain the amount(s) to be charged to the card and the goods or services purchased are clearly displayed on the Payment Page
4. Force the user to “check” a box on the payment page to acknowledge reading the Terms and Conditions. Include a hyperlink at this same spot that will let the customer review the Terms and Conditions.
5. As the user to give full name, address, city, state or province (USA and CAN only) and postal code or zip code. Also ask for email address and phone number. Some who perpetrate fraud will not do this. Many will so if your prices are significant, use an address verification service to screen for bogus addresses. Clearly post your privacy policy with regard to the information. Selling that information or using it in a manner not clearly defined may very well result in criminal prosecution and at a minimum will certainly result in a high chargeback ration.
This is only a partial list of what GPN Data can and will do for you to lower your costs and increase profitability.
Beware of
What to do if suspect a fraud?
For card not present transaction the best thing is to ask about email address or phone number. Then ask some additional question about the service/product to verify its validity. Not only it’ll show you if the customer is truly interested in service, but it also provides extra time for the owner to report a stolen or lost card. Frauds often resign from trying after encountering even trivial difficulties.
Not enough?
Effective Fraud Management
Companies are losing a couple billions of dollars only in USA annually due to ecommerce fraud. Setting effective antifraud management system allows you to save up to 70 per cent of potential loses. We can help you set and coordinate, well-thought, coherent antifraud policy.
