Protecting Your Merchant Portfolio from COVID-19 Risks

Our partners at Infinicept recently published a blog post outlining ways payment facilitators can protect their merchant portfolios as the COVID-19 outbreak brings new risks to the payments industry.

We share highlights below. For more, check out the full article, New Payments Risks Appear With The COVID-19 Outbreak – How Can You Protect Your Merchant Portfolio?

The outbreak of a global pandemic is unlike anything the payments industry has previously encountered. But that doesn’t mean the resulting threats themselves are new – simply that the risk of encountering them is dramatically heightened.

In any crisis situation, bad actors will seek out ways to exploit both fear and the desire to help others. The current environment is ripe for potential fraud and other consumer harm – an increase in people trying to sell fake products being touted as cures or running charity scams, for example.

What does that mean for payment facilitators? Primarily, it means that our current situation calls for increased vigilance. When you’re monitoring your merchants’ transactions, be alert for warning signs. And now more than ever, be prepared to go deeper into what you find.

For example, it’s likely that transaction volumes will change as small businesses adapt to their own evolving conditions. But it’s important to know whether the changes you’re seeing – either increases or decreases as well as changes in types of transactions – are logical, given the merchant’s situation.

An increase in restaurant volume at a time when many eateries are closing their seating areas could mean that a popular restaurant is successfully transitioning to takeout orders and enjoying broad community support. Or, it could be an indicator that the merchant is using their access to the payment system access for unlawful purposes.

Further investigation will give you a better idea which is the case. If you find unusual activity, check the merchant’s web site for possible reasons. In the case of the restaurant, are they running a promotion, or have they switched to selling boxes of food, which could account for the increase? Or does it say they’ve simply closed, which would lead to a need to probe deeper into any reason for an increase in volume?

Staying informed about current events and their impact on the local communities where your submerchants operate is critical right now. It will help you put any anomalies into context – or know when they simply don’t make sense. And when what you’re seeing doesn’t add up, it may be time to call the merchant to ask for an explanation, backed up with proof such as receipts if necessary.

For more tips on protecting your portfolio – including specific things to watch out for – check out the post on Infinicept’s web site.