High Risk Merchant Account Red Flags to Look Out For

By: Jessica Gables

A recent national publication in the United States has revealed that at least 60 percent of online consumers have become quite worried over the prevalence of identity theft related to online purchases. This fact is really no surprise considering that the recent estimate on actual money lost to identity theft now amounts to USD56 billion.

The worst part of this is that the actual brunt of this huge loss is usually felt most by the merchants and the merchant account providers, usually through the chargeback. The actual consumer is protected by the law, which limits the figures of financial exposure associated with credit card fraud. This is by no means a great comfort for them, as this still means they will be unable to purchase or avail of the service they wanted to in the first place.

So how does this actually affect high risk merchants and providers high risk merchant account?

The bad part about the prevalence of identity theft in eCommerce is ultimately the fear of actually making an online purchase. This translates into bad business for both online merchants and merchant account provider, as both are reliant on consumers making an online transaction with them. The public perception can be swayed to think that all online purchases can be hacked into and scammed.

How can this be fixed then? Here are a few suggestions on how to make your customers feel more secure while dealing with you and your online business:

1. Make the consumer absolutely confident in your ability to protect their personal information. This is essential in winning consumer confidence and their business.
2. Make consumers feel that your company is in the habit of operating with high levels of financial security, and that your company is well equipped with efficient security safeguards to fend off hackers.
3. Provide easy and secure ways for consumers to correct their financial records with you. Keeping your records and database updated is immensely valuable to maintaining your online business.
4. Immediately report any suspected fraud to the authorities. While it is well within the boundaries of your business that you conduct an internal investigation into a suspected fraud, calling in the authorities shows that you yourself have nothing illegal to hide, and that you are operating within the bounds of the law.
5. Encourage customers to keep their own records of business dealings with you that they can cross-check with you for validity. This empowers your customers and gives them more confidence in doing business with you.

Keeping in mind that anyone can be a victim of identity theft and online fraud, it is in your best interest to ensure that you are indeed operating a secure and legitimate online business, be it as a high risk merchant offering items or services online, or as a high risk merchant account solutions provider, offering to process credit card payments from a customer for a client merchant.