Once a businessman gets a merchant account, he/she will have to take essential precautions in order to avoid fraud and chargeback. Following are a few tips to be followed after opening a merchant account: 

-      Collect CW2 and CVC2 Verification Numbers – This tactic not only reduces cases of chargebacks, it also reduces pass-through fees which could be charged after an order from a credit card is processed. Behind the MasterCard, Discover and Visa credit cards, there is a security code of 3 digits which is located at the right side of the credit-card number. Asking the customers to enter this code acts as an added verification measure. Most of the internet payment processors are known to provide support for entering these security codes while processing orders placed through a credit card. These details can be obtained from payment gateway providers.

-      Using AVS (Address Verification System) – The AVS service ensures that the address mentioned on an order form is the same as the one where the billing accounts of a card holder are sent to. However, this service works only for orders conducted in America. If the AVS service is not used while processing transactions will result in shelling out higher processing fees.

-      Scrutinizing orders made from developing countries – Most of the fraudulent online deals happen from countries such as Russia, Indonesia, and other developing countries. The orders made from these countries can be accepted at the trader’s risk till the time a universal AVS service is developed.

-      The customers should know the name that appears on statements – Many dealers who use third party processing firms run into problems. This is because the name that appears on the monthly statements of a cardholder is usually the third party processing firm’s name and is not the firm’s name from which the cardholder has made a purchase. This may not always happen, but it does occur in many instances. It is best for the customer to know which name will be appearing on their credit-card statement to avoid confusion.

-      Suspicious orders should be handled accordingly – If any order appears suspicious, it is best to either e-mail of call the customer in order to verify if the order was actually placed.

-      Check out for orders placed from free e-maid IDs – It is better to be careful before accepting orders from people using a free e-mail address, since it is difficult to track them. It is always easier to find people using a company’s website e-mail address.

-      Signatures upon delivery – If the business involves delivering products, it is better to utilize a carrier which requires signature after delivery. It should also allow the trader to have one copy of this signature. It is advisable to maintain a record of these signatures.

-      Ask for a fax copy of credit and ID cards – This tactic is considered best in a business-to-business sales environment.

-      Post a word of warning – posting a word of warning on the order page will deter people from making fraudulent orders and also helps in reducing fraud instances.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.