OFFSHORE Ecommerce merchant risk types

There are a number of fraudulent transactions which get processed in ecommerce businesses. To add to this, there are also security breaches which allow personal data on the card to be copied. This costs the mail order – telephone order and ecommerce establishments with huge amount of money each year. This makes it imperative for traders in these businesses to know the risks connected to online business. If a trade involves taking the payments in the “card not present” setting, then an internal policy needs to be developed so that the potential risks can be addressed. Following are a few typical risks encountered by mail order – telephone order and ecommerce organizations:

Fraudulent Transactions – Fraud on the internet can take a number of shapes:

-       A consumer frequently makes use of stolen card numbers to purchases services or products.

-       A member of the family buys goods without the authorization of a cardholder.

-       A consumer makes a false claim that the shipment has not been received.

-       The processing system for card payment of a particular ecommerce merchant has been hacked by a criminal and he/she is issuing credits to themselves.

Online theft of card account details – There are quite a few ways in which a hacker can access personal information present on the card:

-       Intercepting the data present on the card during the transmission of the payment processing from or to the merchant.

-       While accessing the payment processing system of a merchant account provider who is inadequately protected and stealing information from them.

The theft of information present on the card from some physical site – There exist several possibilities where the information can be taken from some physical data site. This includes:

-       The stealing of payment account information by outsiders from the site of the merchant account providers. The stolen information will then be sold for unauthorized use.

-       Garbage collection personnel rob the non-shredded personal account information from the site of merchant account providers.

Chargebacks and consumer disputes – There are a number of reasons why a consumer could dispute the transactions. The most common reasons are listed below:

-       The service or the produce purchased by the consumer is not the same as it has been described on the website or promotional material.

-       The consumer has been billed even before the products or goods have been shipped or before the services have been provided.

-       There exists some misunderstanding with regard to an order cancellation or in the refund or return of the product.

-       The consumer will be billed two times for a single order, or the amount for transaction is not correct.

-       The consumer fails to recognize the name of the merchant on the statement of the credit card.

-       The consumer’s card gets charged without his/her approval.

It is advisable that in a “card not present” scenario, frauds are mainly committed in order to obtain goods which have a high price and can be resold easily, like jewelry and electronics. 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.