Author: Larry Singer

Merchant Account for Travel Companies

Merchant Account for Travel Companies

Businesses that provide travel services are ranked among the highest-risk businesses. Why? One of the reasons is that any problems or disappointments that a traveler may encounter can result in a chargeback.
And we all know that travel is rarely an entirely hassle-free experience. It never has been. The word travel itself is derived from old words meaning “instrument of torture,” “to torment” and “trouble.”

Intrepid wanderers assume that they will face some challenges on their journeys (and may even relish the idea of roughing it). Business travelers just power on through bad airport experiences and ugly hotel rooms. But folks who have been saving up for their once-in-a-lifetime vacation, or got a great deal on their trip, expect to experience perfection. Anything less, and chargebacks are likely to follow – and the most obvious target is your travel business.

And then there’s fraud. The online travel industry has been hit by an increasing number of fraudulent charges from criminals who have learned how to profitably exploit security loopholes in transportation and hotel bookings. The total cost of fraud in the travel industry is expected to exceed $25 billion globally by 2020. Online Travel Agents are predicted to be the worst hit, with estimated loss of nearly $11 billion globally.

How “high-risk” affects your business now
An industry that is associated with a significant percentage of chargebacks and fraud is considered to be a high-risk industry. The risk level climbs even higher when you factor in conducting business in countries outside of the U.S, processing payments in more than one currency, and – in many cases – selling services weeks or months before they are delivered. While these activities all make perfect sense in the context of the travel business, financial firms see them as huge red “danger” flags.

Its also important to know that a chargeback is different than a refund. A chargeback indicates that the customer feels they did not receive what they paid for, and therefore they refuse to pay for it. When a payment is made by credit card, the customer is assumed to be right. The merchant then has to prove when it comes to travel expectations. One person’s idea of an ocean view (“Yes, you can sort of see the ocean if you stand on a chair, dangle out the window and squint really hard”) is another person’s description of a trip gone horribly wrong.

Battling fraud and chargebacks
Whatever the reason – be it outright fraud or disappointment – chargebacks cost merchants money and – potentially – can ruin a business. If your chargeback rate exceeds 2% of your transactions, your merchant account will almost certainly be frozen or terminated. That means you can’t process payments by credit or debit card until your account is restored from its frozen state, or (if you’ve been terminated) you manage to find a Payment Processor who will work with you. Most will refuse to do so, once you have an account termination on your record.

Here’s the good news: T1 Payments won’t immediately disqualify you even if your merchant account was terminated. We specialize in working with high-risk businesses, and we understand the particular challenges they face. We don’t write you off just because you experienced problems that are all too typical in high-risk industries such as travel; whether you’re a travel agent or tour operator, sell vacation packages or timeshares, or provide lodgings, tickets or deals and services for incentive, rewards or membership programs.
Our experience with high-risk industries allows us to offer solutions and guidance that help you mitigate risks. We offer fraud scrubbing technology, and chargeback monitoring, along with flat-fee merchant accounts to help your business (and you!) grow and prosper.
To find out more about T1Payment’s customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.
 

Merchant Accounts for Adult Businesses

Merchant Accounts for Adult Businesses
If your business involves “adult-only” services and goods, you’re automatically branded as a high-risk merchant by any company that provides financial services. Why? Because your industry is plagued by chargebacks, and banks really hate chargebacks.
And there are so many reasons for adult business customers to file chargebacks. It could be that your business didn’t fulfill their impossible dreams. Or they might need a little plausible deniability (“Honey, the computer must have got hacked! I’ll call the credit card company right now!). Maybe they missed the fact that they were signing up for a subscription. Perhaps they just regret the whole thing. Or maybe they are deliberately trying to defraud you.
There are a multitude of reasons that might inspire someone to deny they ever used your services, and if more than 2% of your customers decide to institute chargebacks – you run the risk of immediately losing your ability to process credit cards.

Risky Business
Adult businesses experience sudden terminations of their merchant accounts, as well as freezes and holds on their funds more often than many other businesses. While this can happen if a third-party processor provides an account and only later realizes that you provide adult services, it’s more typically due to regulatory changes that impact the legal status of adult businesses, consumer complaints or chargebacks and suspicious activity associated with the merchant’s business.
What is suspicious activity? It could be anything that violates the terms of your agreement with the payment processor. For example, if you have an online dating business and decide to branch out to escort services – your account could be terminated. Financial services might be comfortable with one type of adult business, but spooked by other types – either due to heightened risk or concern about a particular subset of the adult industry, which typically includes:

  • Adult bookstores
  • Adult membership sites
  • Escorts
  • Massage services
  • Novelties and toys
  • Online dating
  • Streaming adult videos

Suspicious activity can also mean fraud on the business owner’s side, such as failure to deliver services or goods as promised, overcharges, deceptive billing practices and other issues.

High Risk Payment Processing

It’s not hard to find a payment processor who specializes in high risk businesses – a quick Google search will reveal dozens. But you may struggle to find a high-risk payment processor who doesn’t charge insanely high fees for substandard services. No matter how risky your business model may be, you deserve to be treated like a valued customer.
That respect starts with onboarding. Be wary of payment aggregators who approve your account before they do their underwriting (a review of your business, management practices, financial history, and legality). In this scenario, you’ll be in business for a few months (at best) before your account is frozen with no warning. It’s far better for your business – and your sanity – to work with a payment processor like T1 Payments who specializes in high risk businesses and offers flexible underwriting that greatly increases your chances of approval and your peace of mind.

Mitigating Your Risks
Once approved for a merchant account, you’ll want to keep that account in good standing. A key area to address for adult businesses is chargebacks. You can mitigate the risk of chargebacks by:

  • Accurately describing your goods/services
  • Having a clear refund policy
  • Providing an easy way for customers to cancel accounts/request refunds
  • Detailing any recurring charges
  • Delivering products on time
  • Letting customers know what company name will appear on their payment card statements.
  • Excellent customer support
  • A secure website that protects customer privacy

Typically, customers will try to solve a problem directly with the merchant before filing a chargeback. Make it easy for your customers to resolve the problem, and many chargebacks can be avoided.
Unfortunately, though, a merchant can do everything right and still get hit with chargebacks. That’s why you want to work with a payment processor that offers chargeback protection services. For example, T1 Payments works with two chargeback protection solution services – Ethoca and Verifi to reduce chargebacks and help merchants resolve payment card transaction disputes directly. T1 Payments also offers another layer of protection with Fraud scrubbing technology, which can quickly spot and stop suspicious transactions that could result in security problems and/or financial loss for our merchants.
T1 Payments specializes in meeting the needs of high-risk merchants, with over two decades of expertise and a full suite of payment processing services and solutions, including Payment Gateway services that integrate with over 175 different shopping carts. Our flat fee merchant accounts and customizable global payment solutions help your business grow and prosper. To find out more about T1 Payment’s services for high-risk online merchants please visit please visit t1payments.com or call 866-518-2216.

How Credit Repair Companies Can Reduce Chargebacks

How Credit Repair Companies Can Reduce Chargebacks

Chargebacks are the curse of credit repair services. Understanding and managing the chargeback ratio is essential for any credit repair company that wants to stay in business. Here’s what you need to know;

What is a chargeback ratio?

A chargeback ratio is the number of chargebacks per month divided by the total number of monthly transactions. It’s not about the dollar amount of a chargeback, and it doesn’t matter if a business disputes chargebacks and wins. As soon as your customer files a dispute, the chargeback is applied to your account.

Why do chargebacks matter?
If your business goes over 2% in chargebacks a month, your merchant account may be frozen or terminated, and/or the funds in your merchant account may be temporarily placed on hold. And you’ll often find it difficult to get the account reinstated, or find another payment processor who is willing to work with you. This is because credit card companies can fine payment processors thousands of dollars if they allow you to continue processing transactions when your chargeback ratio exceeds 2%.
And excessive chargebacks often indicate that a company isn’t conducting their business properly. Happy customers don’t dispute charges; they try to work things out with the merchant first. For most consumers, chargebacks are a last resort. So, when a financial services firm sees excessive chargebacks, they assume a business is in deep trouble.  And while this is often true, a credit repair firm may do everything right and still be hit with a significant number of chargebacks.

Why so many chargebacks for credit repair firms?
Financial problems can be caused by circumstances outside of a person’s control, or by poor money management skills. Whatever the reason, someone who needs credit repair services obviously has bad credit and is extremely eager to repair it quickly – almost certainly so they can access more credit. So, when a significant percentage of your customers have or have had problems paying their bills it’s logical to assume that they may not be able to pay you, or they may choose not to pay you – which may result in chargebacks.
Your customers may also have a valid reason for disputing charges. Managing expectations is a big part of keeping chargebacks low in the credit repair business. Customers may assume that they’ll have an amazing credit score within a month or so, or may decide to dispute charges when their credit repair doesn’t result in a significant, sustainable change to their credit status. They may not understand the credit repair process. But promising more than you can deliver, or being less than transparent about what you can and can’t do, will almost certainly result in chargebacks.
Other issues that often result in chargebacks include ineffective or uncaring customer service, billing confusion (make sure that the charge is identifiable to your customers, avoid billing under a name they may not recognize) and difficult cancellation processes (make it easy for your customers to cancel their account using the communication method of their choice.) In general, offering a refund when a customer is obviously unhappy is a very effective way of reducing chargebacks. You can always reach out later and try to win the customer back.

How to Reduce Chargebacks
Apart from attending to the issues mentioned above – good customer service, clear communications, and a solid understanding of chargeback ratio and its impact on your company, there are several additional things you can do to protect your business.

  • Flat fee merchant account: since your chargeback ratio is determined by the number of transactions divided by the number of monthly transactions, you can give yourself an edge by growing your business. The math is simple, just two chargebacks a month can really hurt a business with 100 customers, but won’t be nearly as problematic for a company with 300 customers. And, since a flat fee account charges you a pre-determined flat monthly fee and a flat per-transaction fee instead of a percentage of your monthly sales volume you can grow your sales without paying a big financial penalty for your success.
  • Chargeback reduction:software solutions can’t eliminate all chargebacks, but can significantly reduce them by monitoring for transaction errors, potentially problematic patterns, and other issues that often result in chargebacks.
  • Fraud protection:Chargebacks are a far more frequent problem for credit repair companies than fraudulent transactions, but accepting payments electronically is inherently riskier than processing them in-person no matter what type of goods or services you sell. Fraud protection solutions help you spot and screen suspicious transactions.
  • Pick the right payment processor: Working with a high-risk payment processor gives you a real edge. High-risk refers to businesses in industries that are prone to a higher rate of chargebacks. The right high-risk payment processor will have experience in mitigating the risk of chargebacks, and managing other issues of specific concern to credit repair businesses.

T1 Payments specializes in meeting the needs of credit repair companies and other high-risk merchants, providing a full suite of payment processing and payment gateway services that integrate with over 175 different shopping carts. T1 Payments provides flat fee merchant accounts and offers comprehensive account monitoring, reporting and support to help high-risk merchants mitigate chargebacks, fraud and other business risks.
To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.

What To Do If Your Merchant Account Is Terminated

Everything was going fine with your online business – until you suddenly discover that you can’t process any transactions. Or your sales records and bank statements don’t match, you know you should have a lot more money in your account.
What happened? It could be a tech glitch, or another problem. But chances are your merchant account has had a hold or freeze placed on it, or has been terminated. You probably figure this can’t possibly happen without some sort of prior warning from your payment processor, but some processors will act first and notify you afterward.

Understanding Holds, Freezes and Terminations

Holds: Payment processors can withholding money from your transactions and hold it in a separate fund. Typically, a processor does this to protect themselves from a perceived risk of excessive chargebacks or when it suspects fraud. Holds can be placed on specific transactions (typically ones for a large amount of money, or that trigger the fraud protection filters), or may be placed on a percentage of your overall sales. The hold may be temporary or ongoing.
Processing freeze: is a temporary halt on your ability to process payment cards. This typically happens when a processor wants to do a full analysis of your transactions, suspects you may not be abiding by the terms of your payment processing agreement, or wants to adjust the terms of your agreement. You’ll usually be given the chance to prove that the freeze should be lifted.
Termination: If your merchant account is closed (terminated) it’s unlikely that you’ll be able to convince the processor to reinstate you. Terminations typically happen when a payment processor believes you have violated the terms of your agreement, usually by misrepresenting your business.

The Risks of Running a High-Risk Business
High-risk businesses are subject to sudden terminations, freezes and holds more often that one would expect. Often, this is because a third-party processor provides a merchant account without thoroughly vetting the business, and later discovers it’s a high-risk business. The account is then terminated for violating terms, even if you didn’t misrepresent your business. And don’t make the mistake of signing up for a merchant account with a third-party processor that doesn’t do business with your industry – you may get away with it for a bit, but sooner or later your account will almost certainly be frozen or closed.
Other reasons for sudden terminations and freezes include regulatory changes (which are far more likely to affect high-risk businesses), shifts in the types of businesses accepted by ecommerce platforms, and chargebacks, fraud or suspicious activity associated with the merchant’s business.
Suspicious activity can include anything that violates the terms of your agreement with the payment processor. This could be making deposits for another merchant, or accepting payments for anything outside of the specific goods and services you stated on your account agreement.
Fraud involves things such as misuse of payment card information, failure to deliver merchandise, overcharging consumers, fraudulent transactions, and other unsavory activities. Some fraud is a deliberate attempt to deceive, and other types are caused by bad business practices or poor customer communications.

How Chargebacks Can Kill Your Business

While there’s not much that you can do if a processor decides not to do business with anyone in your industry, you do have some control over the most common reasons for merchant account closures: excessive chargebacks. Usually, payment processors expect to see a chargeback ratio of 1% or less. This figure is arrived at by dividing the total number of chargebacks by the total volume processed during a month.
This is a problem for high-risk businesses, which is any business in an industry that has a higher-than-usual number of charge-backs. High-risk industries include CBD sales, online gaming, online dating, telemarketing, pharmaceuticals, adult products and services, travel services, Bitcoin trading, e-cigarette/vaping devices and products, timeshares, and others. If your processor doesn’t understand the particular needs of high-risk businesses, you may suddenly be facing a financial disaster when your account is terminated with no warning.

What To Do If Your Merchant Account Is Terminated
If your account is terminated, you’ll need to find a new payment processor fast. Unfortunately, this will likely be a challenge, as you’ll almost certainly be listed in the terminated merchant file (TMF), also known as the MATCH (Member Alert to Control High-Risk) list, maintained by MasterCard and accessed by Visa and American Express. The purpose the list is to “identify a potentially high-risk merchant before entering into a merchant agreement.”
Choosing a payment processor like T1 Payments that specializes in high-risk businesses is your best defense against having your merchant account terminated or frozen unexpectedly. And even if your account with another processor has been terminated or frozen, T1 Payments may be able to help you get back to business fast and stay in business with services like chargeback prevention and fraud protection.
T1 Payments specializes in meeting the needs of high-risk merchants, providing a full suite of Payment Processing and Payment Gateway services. T1 provides flat fee merchant accounts and offers comprehensive account monitoring, reporting and support to help high-risk merchants mitigate chargebacks, fraud and other business risks. And our customer support team members are the best in the business.

To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.

A Big Win for Sports Betting – T1 Payments and Fantasy Sports

A Big Win for Sports Betting – T1 Payments and Fantasy Sports
Sports betting in the United States has just been given the go-ahead by the U.S. Supreme Court, and states are now free to enter what has become a lucrative industry.
Experts predict that most bets will be placed online in the near future. That’s partly because doing business online or via apps ramps up the profit potential. And also, since many states will need to sort out legal issues before they can enter the marketplace, a significant opportunity exists for those who can offer betting services across state lines.
Additionally, states are expected to encourage mobile and online betting options, to divert gamers from making transactions with illegal bookmakers. The underground sports betting economy in the United States is now estimated to be worth at least $150 billion a year – much of it illegal. Legal sports betting in Nevada totaled nearly $5 billion last year.

Online Wagers – A Risky Business?
Online gaming is already considered a high-risk business, and that’s not likely to change with the SCOTUS ruling. Any business offering online sports wagers – and other types of gaming – will see significant benefits from working with a Payment Processor who has experience in high-risk payment space.
High-risk businesses have a higher-than-average chance of experiencing:

  • Chargebacks
  • Payment card fraud
  • Product returns/refunds
  • Out-of-country sales

There are other issues that can result in a business being classified as high risk, including the owner’s own financial history and how long the company has been in business. Since SCOTUS has just struck down the federal law, many financial firms will be struggling to understand how to offer payment services to businesses offering sports wager services online.
The competition in the sports wager space is expected to be fierce and fast. Even if a business could afford to wait to be approved by standard Payment Processors, high-risk businesses will typically get automatically rejected by the majority of financial instructions. Your best bet: work with a company like T1 Payments who specializes in offering financial services for high-risk businesses.
T1 Payments get high-risk businesses online fast, with a comprehensive service package that includes risk management, chargeback protection, and advanced fraud monitoring – that can quickly be tailored to meet any high-risk business’ specific needs.

What Happened? The Supreme Court Decision
On Monday, May 14, the U.S. Supreme Court, in a 6-3 ruling, struck down a federal law that banned states from regulating (and taxing) sports betting. The “Professional and Amateur Sports Protection Act” (PASPA) didn’t ban sports betting – it just didn’t let states do anything about controlling the practice. States that already had sports wagering processes in place (Nevada, Oregon, Delaware and Montana) were grandfathered in under PASPA.
New Jersey challenged PASPA, and won. From the SCOTUS opinion:
“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA “regulate[s] state governments’ regulation” of their citizens. …. The Constitution gives Congress no such power. The judgment of the Third Circuit is reversed.”
It is now up to each individual state to regulate sports gambling as it sees fit, or for Congress to step in and standardize sports wagers across the country. It seems likely that states will rush to take the lead. It won’t happen overnight though; many states will need to update their constitutions before their law makers can legalize sports betting.
The New Jersey Division of Gaming Enforcement has said they can have their new regulations in place within 90 days, and will be able to offer sports betting at its racetracks and casinos – and almost certainly online- before the end of 2018. New Jersey’s Monmouth Park track says they can be ready to go within a few weeks. Other states that are likely to move forward very quickly include Connecticut, Delaware, Illinois, Mississippi, New York, Pennsylvania, Rhode Island and West Virginia.

Fantasy Sports and T1 Payments

As the Payment Processor of choice for the online gaming industry, T1 Payments is perfectly positioned to assist customers in accelerating their profit potential now that sports betting has been legalized.
Our customers know that T1 Payments offers exceptionally flexible underwriting, fast approvals, and flat fee merchant accounts.  Our customers all gain easy access to all the most popular shopping cart solutions, a secure payment gateway, active account monitoring with fraud scrubs and real-time online reporting. Our customer care team is knowledgeable and motivated to solve problems and works hard to keep our customers well-positioned for success.
To find out more about our customizable global payment solutions for high-risk merchants, and how the SCOTUS ruling may open new online opportunities, please visit t1payments.com or call 866-518-2216.

CBD, Payment Processing, and PCI Compliance

CBD, Payment Processing, and PCI Compliance

Online vendors of CBD oil are accustomed to being classified as high-risk businesses. So, you’ll be happy to know that, when it comes to PCI DSS compliance, your small to medium-size ecommerce site is almost certainly considered “low risk.”
PCI DSS defines risk based on how many transactions a company processes. Which means that that all of the service providers that you work with – your payment processor, payment gateway, bank, ecommerce platform – are likely considered to be high risk. High-risk – which is “tier 1” on the PCI DSS compliance scale – translates to handling 1 million or more payment card transactions a year.
That said, anyone whose business involves payment cards (credit, debit and/or prepaid cards) is responsible for complying in some fashion – even if it’s only doing your due diligence when selecting service providers – with PCI DSS. Read on to find out what you need to do.

What Is PCI DSS?
PCI DSS stands for “Payment Card Industry Data Security Standard.” Typically, people just refer to the standard as PCI.
The standard itself is a set of 12 minimum best technical and operational practices for securing payment card data when it is captured, in transit, and at rest. This covers the entire sale cycle – you capture the data when a consumer provides his or her payment card information, that info then travels through various links in the payment services chain, and ultimately is stored “at rest” in a database or databases.
PCI DSS compliance is intended to help businesses prevent, identify and defend against security threats involving the use of data associated with payment cards. The PCI DSS was established and is updated as needed by the PCI Security Standards Council, which was founded in 2006 by American Express, Discover, JCB International, MasterCard and Visa Inc. The current version of the PCI DSS is v 3.2.

Do I need to comply with PCI?
Yes, any merchant that accepts payment cards needs to be in compliance with PCI DSS. If you don’t comply, you may be subject to fines and penalties – worst case scenario you can lose your ability to accept payment cards.
However, the compliance requirements vary according to the type and size of your business. A company that handles a lot of transactions, such as a Payment Processor, is required to comply with a much stricter standard. A merchant with a small, online store that processes less than a few thousand transactions a month has more basic responsibilities.
PCI DSS has four tiers of compliance. The amount of transactions a business processes typically determines the standards they need to comply with – the more transactions, the more you need to do to secure data. Here’s how Visa breaks it down:

  • Tier 1 processes over 6 million Visa transactions per year. But payment card providers may decide that any specific business, due to its perceived risks or after experiencing a data breach, falls under Level 1.
  • Tier 2 processes 1 million to 6 million Visa transactions per year.
  • Tier 3 processes 20,000 to 1 million Visa e-commerce transactions per year.
  • Tier 4 processes less than 20,000 Visa e-commerce transactions per year.

 

PCI DSS and CBD Merchants
In general, a small business selling CBD products will work with third-parties such as payment processors like T1 Payments, ecommerce web platforms and other service/solution providers to accept payment cards.  While you cannot absolve yourself of all responsibility for PCI Compliance when working with third parties, your primary duty is due diligence. In other words, you need to find out what level of PCI DSS your partners must comply with and determine, to the best of your ability, whether your partners are actually in compliance with PCI DSS.
Service providers can opt to have an annual onsite assessment conducted by qualified auditor, or may conduct an annual Self-Assessment. Choosing one method over another is not particularly indicative of the provider’s compliance. So how do you validate whether your partner really is compliant with PCI DSS?

Google to see if they have experienced any security breaches. If so, find out when it happened, why, and how the problem was remediated. If a provider has experienced multiple breaches, you might want to consider other options.

Talk to the sales rep or customer care person about PCI DSS compliance. Some providers may tell you that they go beyond compliance with PCI DSS and that’s a good thing to hear as PCI DSS is meant only to address a standard set of security protections.

Your best judgement is a good indicator of a provider’s compliance. Ask yourself these questions: Is the company well-established? Does it have solid relationships in the financial industry? Does its customer support and/or sales department respond easily and knowledgably to questions about PCI DSS or is there a very long pause? Do they seem to be irritated that you asked about compliance? Is PCI DSS compliance mentioned on the company’s website?

Bottom line: PCI DSS is part of your job description when you’re running an ecommerce business site. As a small business owner with partners handling payment card processing your business’ risk exposure is probably minimal, but you need to choose the right partners. Keep records of the questions you ask potential partners, and their answers to prove you did your due diligence. Chose established providers, and remember that the least expensive option may end up costing you the most in the long run.

T1 Payments specializes in meeting the needs of high-risk merchants, providing a full suite of Payment Processing, including advanced fraud scrubbing and other risk management tools, and Payment Gateway services that integrate with over 175 different shopping carts. T1 also provides flat fee merchant accounts, complies fully with PCI DSS (Level 1), and offers comprehensive account monitoring, reporting and support to help high-risk merchants avoid chargebacks, fraud and other business risks. To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.

Fraud Scrubbing for High-Risk Businesses

Fraud Scrubbing for High-Risk Businesses

Fraud scrubbing is a technological solution intended to greatly reduce merchants’ risks of payment card fraud. Having a fraud scrubbing solution in place is especially important for high-risk businesses, as these companies have a higher-than-average chance of experiencing payment fraud and so-called “friendly” fraud (also known as chargeback fraud). By using a fraud scrubbing solution, suspicious activity and dubious transactions can be detected and blocked before they are processed.

How Does Fraud Scrubbing Work?
Fraud scrubbing technology uses rule-based filtering to quickly spot and stop potentially problematic transactions. The configuration of the rules is simple, “If A occurs, do Z.” As an example:
“If shipping address does not match billing address, flag transaction.”
“If transaction originates from (specified) IP address range, block transaction.”
Fraud scrubbing programs make these rules easier to configure by providing dropdown menus with options to select from for each rule.
The pre-set rules are based on patterns typically seen in fraudulent payments. These patterns include:

Anomalies: Exceptionally large orders, rapid-repeat transactions, users who consistently enter the wrong PIN numbers or Credit Card Identification Number (CCN) codes – anything that deviates from expected activity and might result in substantial losses may be flagged for review.
Activity: If a payment card being used for multiple online transactions within a very short period of time, it will probably be flagged as a security risk. It’s typical for criminals using stolen or otherwise compromised payment cards to try and use the card quickly before it’s reported as lost or stolen. Of course, the consumer may legitimately be doing a lot of shopping at once for holiday presents, and transaction velocity checking filters can be adjusted to reflect expected increased activity at certain times of the year.
Blacklists: Some patterns point to extremely obvious problems, but it takes fraud scrubbing filtering to spot them. If the payment card number, consumer’s name or other details associated with a transaction have already been flagged as high-risk, a fraud scrubbing check of blacklist databases will halt the transaction. This could include card data that is believed to have been compromised in a security breach, or transactions coming from countries with a significant history of international transaction fraud.
IP: does the consumer’s current IP address indicate that they are located in a different country than the one associated with their payment card? The consumer may be shopping online while travelling, but it’s also quite possible that their payment card has been stolen or cloned.
Trends: These rules address activities that fraudsters typically enagage in. As an example, criminals often test stolen payment cards by charging small amounts, both to see if the card is valid and if it is being monitored by the issuing bank or cardholder.

Verification: does the shipment address match the billing address associated with the payment card? While people may want shipments sent to their office or another convenient location, mismatches between payment address and shipping address can indicate the use of a compromised payment card.

Configuring Fraud Scrubbers
Fraud scrubbing technology features a set of rules that define what should happen if something occurs. As shown in the examples above, some actions that may appear fraudulent can actually be totally innocent. You don’t want to block customers from purchasing items, nor do you want to make it easy for criminals to defraud you. So, the default rules can be configured to fit an individual business’ needs.
For example:

  • You have three or four customers who place extremely large orders regularly. You can place their names – or even specific credit card numbers – on an exceptions list.
  • You can raise or lower transaction limits based on the level of risk you’re willing to accept.
  • You can opt to be conservative and “block” suspicious activities entirely, or you can adjust the filters to “flag for review.”

You can also screen for innocent mistakes that can result in chargebacks. For example, you can alert users who have placed multiple, identical articles in their carts, or who have attempted to purchase multiple subscriptions. In these cases, the fraud scrubber may be set to flag for review, or may trigger an error warning and ask the consumer to manually confirm the purchase. Different options are available depending on the fraud scrubbing solution and the ecommerce platform that’s being used.
Fraud scrubbers can also be configured to decline problematic transactions before authorization (prior sending the transaction to the acquiring bank for processing) and after authorization (prior to shipping product).

Choosing a Fraud Scrubbing Solution
High-risk businesses, and new e-commerce merchants, may initially need help to configure a fraud scrubber properly. It’s best to utilize a fraud scrubbing solution that is offered by your Payment Processor, who should be experienced in both mitigating potential problems for high-risk businesses and willing to work with you to figure out your needs.
You should be able to view fraud scrubbing activity, and act on items flagged for review, though an easily accessible but secure dashboard accessible through your browser.  You should also be able to update and reconfigure your filtering through the dashboard, including the filters that determine actions based on customer history interactions, IP addresses, email addresses, transaction count and transaction amount, and velocity checks.
Any fraud-scrubbing solution should be updated regularly for it to be effective, and to keep you one step ahead of intentional fraud. Talk to your Payment Provider to determine whether a fully-automated solution is the best choice for your business, or what level of customization will best fit your needs.
The right fraud scrubbing solution, properly configured, will block the majority of fraudulent transactions in real time, and enable you to scrutinize potentially problematic activity to determine whether it is genuine or fraudulent.
T1 Payments specializes in meeting the needs of high-risk merchants, providing a full suite of Payment Processing, including advanced fraud scrubbing and other risk management tools, and Payment Gateway services that integrate with over 175 different shopping carts. T1 also provides flat fee merchant accounts, complies fully with PCI, and offers comprehensive account monitoring, reporting and support to help high-risk merchants avoid chargebacks, fraud and other business risks. To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.

Payment Processing For Nutraceutical Ecommerce

Payment Processing For Nutraceutical Ecommerce
Having a difficult time finding a Payment Processor for your online nutraceuticals business? Don’t take it personally. Even if you have an outstanding financial history you may still struggle to find a payment processor who is willing to work with you – and who won’t charge you outrageously high fees.
Why is this so difficult? In part, because nutraceuticals is a high-risk industry and that translates into an automatic “no” from many financial service providers. Or you may get an intial yes, and then – as has been the case with some ecommerce platforms – you are suddenly notified that the company will no longer process credit cards for your business. You suddenly either need to find a Payment Processor who will work with you, and whose services work with your existing online store– or go out of business.
And frankly, some payment processors are taking advantage of the situation. They know your options are limited, so they crank up the fees and hold onto as much of your money as they can, for as long as they can. Beware of Payment Processors who want to take advantage of your desperation.

But why are nutraceuticals high risk?
Any industry that typically has a higher-than-normal rate of chargebacks is considered high risk by financial service companies. Chargebacks – when a customer disputes a charge on his or her payment or debit card – require banks and other financial service providers to spend time, money and effort sorting out and solving the problem. So some fincial services companies simply have a policy of not doing business with businesses in industries that have been determined to be high-risk.
Many industries are considered to be high-risk, including some that might not seem particularly prone to chargebacks such as travel, online gaming, and collection agencies. Some, if not many, of these chargebacks are due to buyers rethinking their purchase or transaction. Others come from dissatisfied customers who aren’t happy with the product they received, or weren’t clear about the terms of their purchase.
Nutraceuticals have been badly affected by a few problematic merchants who engaged in deceptive billing practices – or simply didn’t communicate clearly with their customers – which led to a high rate of chargebacks. Due to the actions of a few, the entire industry has been labeled high-risk.

How can I reduce risk for my nutraceuticals business?
The most effective way to reduce the risk of chargebacks and payment card fraud is by clearly communicating with your customers, and backing that up with the right technological solutions.
You need to ensure that you have clearly and accurately described your products on your ecommerce website. You also need to make sure that your billing and refund policy are explained in full, and are understandable. Let your customers know how the charge will appear on their payment card’s statement if you bill under a different business name than they might expect. If you offer subscriptions or auto-renewals, make sure to explain these reoccurring charges. Resist any temptation to “hide” billing, refund and subscription information in tiny type, tucked away discreetly on your ecommerce site. It’s better to potentially lose a few sales than get hit with a multitude of chargebacks.
Then, maintain good business practices. Deliver products as promised, on time. Make sure to respond to customer questions and problems as quickly as possible. Usually customers only institute chargebacks when they feel that the merchant is unwilling to resolve an issue any other way.
You’ll also want to reinforce your efforts with technology that actively monitors transactions in order to reduce the risks of fraud, chargebacks and other issues. Your Payments Processor should be able to provide you with the right solutions.

How do I find a trustworthy Payments Processor?

Don’t settle for less than optimum service just because your business is classified as high-risk. Instead look for a Payment Processor, such as T1 Payments, who specializes in delivering solutions for nutraceuticals and other high-risk businesses.
You want a Payments Processor that offers:

High-risk focused underwriting: This is the vetting procedure financial services firms use to determine a merchant’s risk level. Look for a Payments Processor who specifically works with high-risk accounts as their underwriting process will be better able to determine your nutraceuticals’ real business risks and potentials.
Fast onboarding: you probably don’t want to wait for weeks to hear whether your application has been accepted by a Payment Processor. Look for one that offers quick authorization. For example, T1 Payments can have you up and accepting payments in 24-48 business hours.
Fraud protection: online payments are inherently riskier no matter what type of goods or services you sell. In store, ID can be checked and consumers will probably use a chip-enabled payment card. Online sales offer none of these protections. Thankfully, there are fraud protection solutions specifically designed for ecommerce which utilize “fraud scrubbing” filtering to spot and screen suspicious transactions.
Chargeback reduction: Tech solutions can’t prevent all chargebacks, but can significantly reduce them by monitoring for transaction errors, fraudulent patterns, and other issues that often result in chargebacks.
Complete solutions: Since high-risk businesses absolutely do require advanced services aimed at minimizing the business’ potential exposure to chargebacks and fraud, your Payment Processor should provide access to a comprehensive service offering so you don’t have to piece together a solution and can make one flat monthly payment.  You should be able to access your account data securely online, and ideally without having to purchase additional software.
Flat Fee Merchant Account: A flat fee account means that you are charged a pre-set flat monthly fee and a flat per-transaction fee instead of a percentage of your monthly sales volume. This allows you to predict your monthly accounts payables and profitably increase your sales.
PCI Compliance: Any financial service provider who handles payment card data must be fully in compliance with “The Payment Card Industry Data Security Standard” (PCI DSS, commonly called PCI). Your Payment Processor and Payment gateway should be certified as a PCI Level 1 Service Provider.

T1 Payments specializes in meeting the needs of high-risk merchants, providing a full suite of Payment Processing and Payment Gateway services that integrate with over 175 different shopping carts. To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.

High-Risk Payment Processing Solutions

Comprehensive High-Risk Payment Processing Solutions
T1 Payments offers a customizable, end-to-end solution for high-risk ecommerce businesses. Whether you’re an experienced online merchant, or are struggling to find a payment processor who will work with your high-risk business – T1 Payments can help you. We’ll get you up and running fast, and then we’ll help keep your company profitable with services to protect you from fraud and chargebacks, personalized support to answer your questions, and a commitment to ensuring your complete satisfaction as your business grows and prospers.
Why We Work With High-Risk Businesses
We feel that everyone deserves a chance to succeed. And our decades of experience in global payment processing also enables us to reduce many of the risks typically associated with industries such as:

  • CBD
  • Nutraceutical
  • Adult Entertainment
  • Online Dating
  • Gaming
  • Start-Ups
  • Telemarketing
  • Travel
  • Multi-Level Marketing
  • Fantasy Sports
  • Collection Agencies

What’s So Risky About My Business?
High-risk businesses typically are rejected by banks and other payment processors primarily because companies working in the industries listed above have a higher-than-average chance of experiencing:

  • Chargebacks
  • Payment card fraud
  • Product returns/refunds
  • Out-of-country sales

There are other problems that can result in a business being classified as high risk, including the owner’s own financial history and how long the company has been in business.
All of these issues are problematic, as they complicate predictive analysis regarding projected cash flow, cause unexpected loses, and take time to reconcile. But as noted above many of these concerns can be mitigated with expertise in the high-risk business space teamed with the right technology solutions.
T1 Payments offers a comprehensive service offering – including risk management, chargeback protection, and advanced fraud monitoring – which we can tailor for any high-risk business’ needs. This enables us to easily work with vendors that would otherwise have a very difficult time finding a payment processor. And we are typically able to work with businesses that other service providers have refused. But why waste time being rejected? Come to T1 Payments first.
Affordable High-Risk Payment Processing
When a business is classified as high-risk, just getting paid for goods and/or services can become a very expensive proposition. Why? Because you pay for exposing other companies to risks associated with your business. To protect themselves against their potential losses, financial service providers may charge fees for onboarding an account, excessive costs for chargeback and fraud monitoring services, higher rates for processing chargebacks, big reserves held on payments, and higher costs all around for every necessary service make it much harder to maintain cash flow and profitability.
It is true that a high-risk business needs more sophisticated solutions to protect that business – and its payment partner – against loss. This naturally results in higher costs. But excessive costs are unacceptable and unfair. At T1 Payments, we want our customers to succeed and grow. And our customers often choose to continue to work with T1 Payments even after they have established a business that can easily qualify for a lower-risk classification.
What You Should Expect From A High-Risk Payment Processor
Don’t lower your expectations simply because your business is classified as high-risk. Not only do you need all the capabilities and data security protections any online vendor requires, you also need payment procession solutions that will minimize your exposure to fraud and help mitigate potential problems typically associated with your industry. These services include:
Flexible Underwriting: Underwriting, in the context of ecommerce, refers to the policies a Payment Processor and other financial firms use to vet a merchant to determine whether they want to do business with that merchant. Ideally you want a Payment Processor who has a thoughtful approach to vetting, and looks at the big picture rather than automatically rejecting an account due to issues that are typical in particular industries. T1 Payments is known for being flexible regarding our underwriting process. We’re also fast – you’ll get an answer regarding your account application quickly.
Full-Service Solution: Look for a Payment Processor who provides a comprehensive service offering so that you don’t have to apply for multiple accounts, pass multiple vetting processes, and figure out what works with what and what doesn’t work at all on your own. Piecing together your own solution can ramp up both your costs and inefficiencies – plus, what business owner has the time to properly research all of the possible providers and solutions? With T1 Payments, our e-commerce, mobile, and MOTO (Mail Order/Telephone Order) customers all gain easy access to all the most popular shopping cart solutions, a secure payment gateway, active account monitoring with fraud scrubs and real-time online reporting.
No Lock-In: You also want an easily deployed solution that doesn’t limit you to specific platforms or requires you to purchase and maintain specific software. With T1 Payments, no special software is required.
Solid Customer Support: Obviously, you want to work with a Payment Processor who provides caring, informed and motivated support. There’s nothing more frustrating than listening to a “customer care” rep slowly reading through a prepared support script when your site isn’t functioning and you’re losing sales. Look for a Payment Processor with a dedicated in-house support team that is empowered to fix problems, rather than simply escalate you up the support tiers until you happen to connect with someone who has a clue.
Data Protection: Any service provider who handles payment card data must be fully in compliance with “The Payment Card Industry Data Security Standard” (PCI DSS, commonly called PCI). The current version of PCI is v3.2. These standards were designed to help ensure that the data is protected when it is collected, in transit and in storage.  PCI is a shared responsibly – another reason why it is good to work with a Payment Processor who offers and end-to-end solution. Your Payment Processor should ensure that the entire payment chain service offered is certified as a PCI Level 1 Service Provider. Level 1 is the most rigorous tier of data security as defined by PCI. If you work with a company that does not comply with PCI, you may face big fines and other financial penalties as well as lose your company’s ability to accept credit/debit cards.
Flat Fee Merchant Account: You’ll also want a Payment Processor that can provide you with a flat fee merchant account. A flat fee account charges you a pre-determined flat monthly fee and a flat per-transaction fee instead of a percentage of your monthly sales volume. With a flat fee merchant account, you can predict your expenses and grow your sales without paying a financial penalty for your success.
T1 Payments specializes in meeting the needs of high-risk merchants, providing a full suite of Payment Processing and Payment Gateway services that integrate with over 175 different shopping carts. T1 also provides flat fee merchant accounts, complies fully with PCI, and offers comprehensive account monitoring, reporting and support to help high-risk merchants avoid chargebacks, fraud and other business risks. And our customer support team members are the best in the business.
To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.

Everything Merchants Need To Know About Online Payment Gateways

Everything Merchants Need To Know About Online Payment Gateways

Ecommerce isn’t a “plug and get paid” solution. Merchants need to make smart choices about their payment partners – the services that process transactions. Among the most important decisions is which online Payment Gateway to use.

What is a Payment Gateway?

An internet Payment Gateway service has one basic but very important job – securely moving payment data through the entire financial services chain in order to validate a transaction.
Here’s how it works:
1: Customer provides payment card details.
2: Payment Gateway routes the transaction details to the Payment Processor.
3: Payment Processor transmits the request to the Credit Card Network.
4: Credit Card Network identifies the issuing bank, and routes transaction for verification and approval.
5: Credit Card Network sends “accepted” or “declined” response to the Payment Processor.
6: Payment Processor sends accept/deny info to the Payment Gateway
7: Sale is processed, or customer is given the option to use another payment method.
As noted above, the Payment Gateway is just one piece of the ecommerce transaction puzzle. Vendors also need a Payment Processor and a merchant account to get paid.

How Do I Choose The Right Payment Gateway?

This depends on your business. Questions to consider when choosing a payment gateway include:

Does my Payment Processor prefer/partner with specific Gateways? It’s often a good idea to choose your Payment Processor before you pick a Payment Gateway. A full-service Payment Processor can eliminate the stress and time involved in researching solutions and help you put the ecommerce puzzle together in a way that makes sense for your business. This is especially important if your business is classified as “high risk.”

Does the Payment Gateway integrate with my ecommerce platform/website? If you need or want to use a specific ecommerce platform, you’ll obviously need to work with a Payment Gateway that is accepted by and integrates well with that platform. Check to see what services the platform recommends. Here again, if you have a high-risk business, make sure that the platform and its Payment Gateway/s will process your transactions. Many will not accept transactions from high-risk merchants.

How long will it take to activate my account? Some Payment Gateways can be activated almost immediately; others will make you wait for 3-4 weeks. If you’re just in the planning stages, a month’s wait may not be a problem. If you’re ready to open your business now, find a Payment Gateway that can get you up and running as quickly as possible.

What are the fees? Cheaper isn’t always better, but do check and compare the set-up costs, transaction fees, and monthly fees. Also, check chargeback fees and look carefully at the fine print to see if there are any additional costs.

Data Security and Payment Gateways
As noted above, the Payment Gateway’s most important job is to keep data secure while it is moving to and from the merchant website, the customer and merchant’s banks, and the payment processor. To help ensure that the data is protected, a payment gateway must comply with a set of security standards known as “The Payment Card Industry Data Security Standard” (PCI DSS, commonly called PCI). The current version of PCI is v3.2It is essential that you use a Payment Gateway that is certified as a PCI Level 1 Service Provider. And since PCI is a shared responsibility, your Payment Processor and ecommerce solution, as well as your website if it’s part of your online store, should also be PCI compliant. Any business that accepts, transmits or stores payment card data must comply with PCI, to the appropriate level for the amount of transactions that are processed by that business. Level 1 is the most rigorous, intended for businesses and service providers that process an exceptionally high-volume of transactions.
Also, look for a Payment Gateway that offers fraud protection and other payment security tools to help reduce the risk of fraud, loss and chargebacks. Your Payment Processor may also offer these services.

Do I run a “high risk” business and if so does the payment gateway work with me? In many cases, high risk businesses need to work with select payment gateways and payment processors.

High Risk Business Payment Gateways

Financial service companies consider some types of businesses and industries to be high-risk. This typically means that the business is part of an industry that has a high average of chargebacks or payment card fraud. High-risk industries include online gaming, online dating, telemarketing, pharmaceuticals, adult products and services, travel services, Bitcoin trading, e-cigarette/vaping devices and products, timeshares, and CBD sales. A merchant’s own financial history can also result in the business being classified as high-risk.
Whatever the reason, if your business falls into the high-risk category, you may have a difficult time getting approved for the ecommerce payment services that you need. The easiest solution is to work with a Payment Processor who specializes in high-risk accounts and who works with a Payment Gateway provider who will process your transactions.
T1 Payments specializes in meeting the needs of high-risk merchants, providing a full suite of Payment Processing and Payment Gateway services that integrate with over 175 different shopping carts. T1 also offers comprehensive account monitoring, reporting and support to help high-risk merchants avoid chargebacks, fraud and other business risks. To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.