Industries considered high risk merchants
It’s no surprise that with the internet being so tightly integrated into our daily lives, many people are moving some, or even most, of their purchases to online merchants. Online commerce is big business, whether for industry giants like Amazon or to small niche retailers providing an online shopping and delivery experience to their customers. An essential part of offering this service is to have a convenient and safe way for your customers to pay you, but the reverse is also true and often overlooked. Your payment process should also be safe for your business, especially if your industry is considered high risk.
What does high risk mean?
Not all online merchants are created equal. Some specific industries experience higher levels of payment fraud than others. This means that more of the transactions processed by the company are done using stolen credit cards, or transactions that incur a high rate of chargebacks. Any time this happens, particularly with chargebacks, where the money is returned to the person who the credit card belongs to, it incurs a processing fee – and these fees can often add up quite quickly to a significant cost to your business.
If your business operates credit card or merchant services in a high-risk industry, taking the correct steps to ensure that you’re protected from fraudulent transactions to the best of your ability is incredibly important. All businesses are susceptible to this kind of fraud, but particularly if you’re identified as being in a high-risk industry, you should take steps to protect your business.
The first step is identifying if you are a high-risk industry.
Which industries are high risk?
There are some obvious industries that are on the list, like gambling companies, payday loan services, auction websites, and ewallet services, all of which offer a large target for fraudsters trying to cash in on stolen funds or credit card fraud, but there are many other industries also considered high risk, including:
- Travel agencies and related services like holiday timeshares or clubs.
- Dating services and apps.
- Jewellers and jewellery retailers.
- Any business that offers a subscription service, particularly a monthly fee-based business.
- Debt management services.
- Health retailers, particularly those selling supplements and herbal remedies.
- E-Cigarette and related liquids and tobacco stores.
- Cloud data hosting or data sharing companies.
These are a few examples, but there are many more. If your business is operating in these spaces, it is recommended that you take steps to help mitigate these risks.
Choose the right merchant service for your industry
It might seem like a daunting task to know what merchant service to pair your business with, but there are a few things you can do to make it easier. The first step in getting your business paired with a merchant service is to get the right advice and not just choose the cheapest or easiest payment processor.
You can get advice at merchantadviceservice.co.uk, as they will apply to merchant service providers for you. They can also offer a wealth of knowledge from industry experts, which means you’re getting quality advice at no cost. Getting paired with the right payment processor is arguably the most important step in this process, and it doesn’t have to be like wading into murky water.
The merchant service might also have special considerations or processes for your specific industry too, so getting paired with one that can supplement your own attempts at risk avoidance can be helpful.
Bulletproof your checkout process
Once you have your payment processor in place, you’ll want to examine your processes for weaknesses. This means starting with your website software and ensuring it’s up to date and any security vulnerabilities are patched to the extent possible. While you are beefing up website security, consider implementing some simple things to ensure the users of your site are both safe and real – like a captcha check and strong password security.
You can also add some data verification to your checkout processing. A simple check like making sure the person that is making the purchase has an IP address that matches their billing address is a quick and easy check. Checking for a few declined transactions in a row and flagging this is also a good data check. If someone is trying to pay with a few different credit cards, it’s a tell-tale sign that something isn’t quite right.
Trust your instinct and don’t be afraid to manually verify suspicious transactions before providing a service or shipping any goods. At the end of the day, it’s your business to protect.
Proper processes can go a long way in mitigating some of the risk that your business faces when you transact online. There are many different strategies to employ to do this, but having the right advice is paramount to your success at not falling victim to the latest fraud trends and techniques, particularly if you are in a high-risk industry.
