Online Payment Risk and How to Manage It?
Online Payment Risk: Payment risk is considered as a loss if a merchant or a company handles a high volume of payments and they fail to comply with the contract.
The blockage of the payments as a source of
fraud can be bounced back on the company. The truth is that every payment
method involves risk. If you run an online business and process payments
on your website, there is a risk involved. The major ones are a fraud
and operational risks.
There are many types of operational risks:
·
Inadequate
and Failed Information Systems
·
Fraud
and Chargebacks
·
Processing
Errors
·
Breaches
in Internal Sources and Control
·
Commercial
Disputes
·
Unforeseen
Calamity.
· A merchant needs
to identify the most critical risks by tying them to business processes.
· Quantify
the severity of the identified risk, if they occur
· Measure the size of the risk and evaluate the likelihood of it, if it is to occur again.
Detailed Risk Management
At A More Granular Level:
·
Understand The Risks And Train The Staff – The staff should
know what risks your business may have to deal with and plan for it beforehand.
Everyone in the business structure needs to understand the types of risks
inherent in online payments. Establish the procedures on avoiding and solving
the risks.
·
Ensure Information Security – Information here
includes customer databases, buying requests, payment process. etc. It should
be made sure that Information is not leaked nor hacked into. Setup a secure and
efficient process for submitting authorization requests over the
Internet. Before you can start accepting payments online.
·
Use Collective Efforts To Minimize Losses – You have control
over most types of chargebacks and especially the ones resulting from
processing errors. A well-designed collection system can help recover
unwarranted chargeback losses.
·
Display Effective Policies And Rules – Your website must
list your privacy, shipping, return and refund policies on
each page. Customers should not be forced to search for them. This will also
create satisfaction and convenience for customers to come to the website even
more.
·
Risk Evaluation – Fraud and any type of risk when
occurs should be evaluated in first priority, by this approach the business has
a guarantee of getting a sound data and planned structure to put up for future
risks.
Finally, Risk Management is focused
on the analysis and reduction of risk in various types of activities.
To know more-
We provide specialized assistance for various
issues including high-risk merchant account, offshore merchant account, merchant account,
and online payment gateway. You can contact us
using the toll-free
number +1 (888) 622 –
6875 or visit app.merchantstronghold.com for more
detail.
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