Be Cautious About These Basics Before Accepting Card-Not-Present Transactions

The problem with CNP transactions is that they offer a high possibility of fraud. A merchant who deals with CNP, order over mail or by fax is called a MOTO Merchant.

Such MOTO merchant accounts need to defend their business from illegal transactions by having the right tools in place. The risk of fraud might be high, but this arrangement is generally very convenient to both parties. The merchant gets high sales and the card holder can shop from home by just looking at a brochure.

Let’s read about some basic that the merchant needs to keep in mind, while handling such transactions.

1.    Verification Of The Billing Address

The easiest method to verify the identity of the client is by asking him to verify the billing address. If the person is a fraud he will ideally not be aware of the billing address. This method is best suited for orders by mail and on the telephone. Sometimes, even after providing an address, if a buyer does not sound authentic, check the address location on Google maps and verify if the place exists where the buyer has described it to.

2.  The Shipping and Billing Address Should Match

A merchant should be alerted the moment he notices a large order being placed by means of CNP transaction. The chances of fraud are high if the billing address and the shipping address do not match. MLM Merchant Accounts should also be wary of any high volume transactions. 

3. The Retailer Is Fully Liable

If a merchant accepts a transaction that later turns out to be done on a stolen or a pick up card, only he is liable for the consequences. The bank or the credit processing provider cannot be held responsible. He cannot hold the bank responsible for giving an approval since the card was accepted at his end.

4. Have Clarity of the PCI Compliance

All MOTO Merchants are strongly advised by the banks to check the PCI Compliance standards of the credit card service provider. If the information of the customer is leaked or compromised, the merchant will be held responsible. The merchant must do some research of his own and know what to except and compare it with what he got.

5. Use Verified By Visa And MasterCard Secure Code

VBV Verified by Visa is a special code that enables the bank to compete the two step verification of a card holder. The software in a credit card processor and a payment gateway is enabled to identify this code and link it to the card. The moment such a customer will use the card a code will be prompted to the user. Only when the cardholder will punch in this code will the transaction go through. The merchant is able to identify by looking at the transaction that the card holder is using this two step verification. Hence, the liability now shifts to the customer form the merchant.

Mistakes to Avoid When Choosing a High Risk Merchant Account Service Provider

If you are a high risk business, whether by definition or certain other associating factors, there is more than one way by which you could get your merchant account wrong. Applying for the right merchant account is absolutely essential when it comes to high risk business types and here are some mistakes that you need to avoid.

Here the name does count – If there is one place in the market where name actually counts, it would be the card processing market. You can always be tempted by cheaper rates, and lesser clauses while choosing your merchant account provider, but more often than not it is just better to go with the tried and trusted names in the market. 

Charges – Albeit with the reputation of a provider, charges per processing cycle and other maintenance or extra charges have to be taken into consideration. Your high risk merchant account service should not be a load on your business model, such that it begins to creep into your board meetings and strategies as a thing to mitigate.

Currencies – Always choose a merchant account that processes most currencies otherwise the whole point of planning internationally goes out of the window.

Limits – Businesses often overlook the factor of lower and upper limits set by merchant account providers for the sales cap of the company. This is primarily down to lack of foresight or planning. For a business to be able to sustain in terms of longevity, it is necessary that your service provider has lenient upper and lower limits.

Chargebacks – Do not ever go for a merchant account that treats chargebacks as the greatest evil in the market. While they are deterrents, your merchant account should have the faculty to deal with them and be flexible when dealing with penalties and high volume.

High Risk Merchants – Avoid Making These Common Mistakes

Most banks are wary of high risk merchants, as they sometimes cause the greatest losses in their books. This is the main reason why businesses classified in high risk category pay greater fees to the bank than the others. If high risk merchants keep the following points in mind, they are sure to make lesser mistakes. 

1. Keep the dispute numbers to minimal.

Too many disputes will lead to too many extra fees for processing and clearing the issues. Merchants can ensures that there are lesser disputes by laying down clear cut processes to ensure maximum customer satisfaction to each and every client. They should ensure that refunds are released promptly, before a dispute is even filed.

2. Keep the chargeback ratio down

The moment a merchant follies to solve a dispute amicably the credit card company will raise a chargeback in order to process the refund on the client’s behalf. All smart merchants should avoid such a scenario as the charge back costs charged by the banks is too high and eats away profits.

3. Unusual And Abnormal Transactions

A merchants should be instantly alarmed when he notices unusual activity and multiple transactions in a short period of time. Banks get very cautious of unusually high volumes and expect the merchant to keep them informed of any clearance sales or other high revenue planned activities.

Is Your Business High Risk? What Does It Really Mean?

Businesses, especially the smaller one face a number of roadblocks while applying for merchant accounts. One of the major roadblocks out of these is the one where your business is deemed as “high risk.” High risk businesses need specialized high risk merchant accounts in order to be able to process payments online.

A high risk business is basically one where there is a potential of significant loss, due to the market fluctuations or simply because of the nature of the business itself. The factors, based upon which a business is classified as high risk or not have been listed below for better clarity:

Credit score – An evaluation of your financial banking and the sources of your investment goes a long way in categorizing your business. If there are grey areas or shoddy details, you will run the risk of being struck down by the high risk name.

Risk industries – Some businesses or industries are by definition considered to be high risk. For example, adult services, online pharmacies etc. all have the potential to come into the public-legal crossfire, a risk that most banking merchants are unwilling to take. All such businesses tie up with high risk processors to meet their payment processing needs.

Charge backs – The number of charge backs the business suffers on an average goes a long way in determining whether it is high risk or not. A high number of charge backs means that you are not doing your job properly and that there is a good chance things won’t improve anytime soon.

Roadmap – While history largely does not matter - you may have had bad times recently – if there is scope to grow and improve, there will be no problem. If, however, there are no signs of improvement for the near future, you will be considered as high risk.

Why Get an Offshore High Risk Merchant Account

If you are a growing business and planning to accept credit card payments from your consumers directly, a merchant would be required to facilitate such provisions. No business can remain competitive without a high risk merchant account; as instant payments have become the norm. In a scenario where a merchant account is must, one that is offshore is the ideal choice, on ground of myriad advantages over a domestic one.

Offshore and Domestic Accounts

As far the definitions for the two go, offshore merchant accounts are provided by banking setups beyond the borders of the country, whereas in case of domestic accounts the provider is a domestic one.

Having a domestic account comes with the added baggage of local concerns. For example, if you are a high risk business or one that may bring bad name to the merchant itself, domestic banks, with a view for their own reputation will steer clear of you. With offshore accounts, this is not an issue.

Advantage of Offshore accounts

·         Offshore accounts provide for accepting multiple currencies, thereby allowing you the opportunity to expand into foreign territory.

·         Offshore accounts come with lower taxation charge, often based around the resident country of the banking service.

·         No trading restrictions in case of offshore accounts, which ensures you can expand and grow without the fear of local scrutiny.

·         There is no volume cap to put a restriction on the amount of business you do.

With its many advantages it is clear that an offshore merchant account is much more rewarding than a domestic one.