The Acquirer Risk Ecosystem Today

Merchant acquirers have traditionally focused their risk strategy on doing everything they can to prevent payment fraud. However, fraudsters are getting more complex, and are now using merchant accounts to conduct their activity. For acquirers, protecting against these new methods is becoming increasingly complex.

Risk can emerge on every layer of the risk ecosystem:

Cardholder/Transaction level fraud 
Stolen card credentials can be used to make all types of purchases. These range in sophistication from opportunistic fraud to syndicated attacks.

Merchant risk  
Merchant payment facilities can be used to process transactions for illicit goods/services, commit deceptive marketing strategies or initiate bust out fraud attacks.

Acquirer/Payment facilitators
Due to employee collusion during KYC, acquirers can inadvertently bring fraudulent merchants onboard.


The most effective way for acquirers to safeguard themselves from financial losses is to think bigger than fraud prevention. With a holistic approach to all aspects of risk, acquirers can consider everything from laundering to credit risk, allowing them to accelerate and scale their business in a secure manner.

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16 Aug / 2017

Acquirers: 4 reasons why your investment in Enterprise Fraud Management will be your biggest ’17 mistake.

Number 4. Fraud is only one of many risks you have to be concerned with.

Most Enterprise Fraud Systems are sold as a do-it-all swiss army knife that started life as an issuing fraud system. And besides fraud, there are many other risks that you have to be concerned about. Here is a quick checklist of the most important acquiring risk capabilities you will need for your shop:

  • Authentication (more specifically, risk based authentication)
  • Unified real-time fraud controls (POS, MPOS, eCommerce, Kiosk, eMOTO, MOTO)
  • Chargeback prediction
  • Risk based pricing
  • eMarketplace risk management
  • Merchant risk management controls
  • Real-time origination platform with fraudulent application
  • eKYC
  • AML controls

Number 3. You’re buying a “budget option” EFM because of tightening budgets.

Just when you think you are getting the Mercedes Benz of the risk world, the truth of the matter is what you’ve really gotten is the bottom of the barrel “rental-spec econo” version that really doesn’t deal with today’s real-world issues.

Big name EFM providers tend to make everything optional. And optional shall they remain as acquiring banks begin to tighten their wallets.

Number 2. You’re not using risk management as a business enabler.

Most acquirers in Asia miss this point completely. If there’s one thing you need to get right, it’s risk. One good example would be Paypal. Paypal started life as Confinity which was essentially an ePayments risk company. Other folks like Square and Stripe could also arguably credit some of their success to extraordinary risk controls – particularly in areas of eKYC.

In tomorrow’s commerce, the ability to reduce friction by using risk based authentication will certainly be a requirement for your new merchants. Some may even list the availability of a gateway agnostic fraud detection and eMarketplace risk management tool as a pre-requisite.

Number 1. Origination. Origination. Origination.

Pre-read: For Merchant Acquiring, Asia’s Banks Must Go Fax to the Future

Your acquiring business and customer needs are changing. Fast. Instant gratification is the name of the game.

Most acquiring banks seem to think that their biggest competitor would be the bank next door. With the mindset (and people) that scream “I know acquiring better the other guy”, you’ll probably not see the real competition heading your way.

Your biggest challengers from now on would be from the technology world and to certain extent, acquirers who have embraced technology. Your biggest threat is on how they are able to on-board merchants quickly.

If you’re taking 14 days or longer to on-board your merchants, you’ve got to start re-thinking your risk strategy. EFM is certainly not the solution to your current challenges.

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19 Apr / 2017

Digital News Asia: Jewel Paymentech gives banks’ due diligence a tech boost

“ASIA’S current e-commerce boom may be a boon to consumers and companies, but is becoming a bane for banks fuelling the payment process.

Currently, if a merchant sells fake or counterfeit goods, or engages in money-laundering, it is the bank which ends up footing the fine.

This leaves the bank in a Catch-22 situation: It either bears the risk of taking on new merchants; or takes the risk of missing out on establishing itself among e-commerce operators.

This is the gap Jewel Paymentech hopes to fill, by helping banks infuse technology into their due diligence.

It is an unusually niche area, admits its group managing director Lee Wooi Siang, but one that needs addressing.”

Click to read the full article

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15 Dec / 2015

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