Tag: Risk/Compliance

Expert Perspective: How Can Payment Facilitators Mitigate Risk During COVID-19?

As businesses adjust to the changing times due to COVID-19, criminals and other bad actors are actively seeking ways to capitalize on the crisis. So, what can payment facilitators do to help protect themselves and their submerchants from fraud and other types of risk in this environment?

What is a Submerchant?

The relationship payment facilitators have with their merchants is at the heart of what PFs do. Working with a payment facilitator makes acceptance simpler for merchants – especially for smaller businesses, for whom setting up individual merchant accounts can often be too cumbersome.

How Chargebacks Apply to Payment Facilitators

While becoming a payment facilitator can create new revenue streams for many businesses, it carries a risk of losses as well. One type of risk a PF must address is the potential for losses from chargebacks.

Appeals Court Ruling Has Implications for Submerchant Contracts

An appeals court ruling earlier this year sheds light on the importance of submerchant contracts and what they tell payment facilitators about their rights and obligations

High-risk Trends Series: Problematic Products

Dealing with high-risk portfolios adds complexity to a PF’s compliance efforts. This week, we begin an occasional series on the trends that are facing payment facilitators operating in the high-risk space.

Bankers Protest Square Application, MasterCard and PayPal Go Global: News Roundup

MasterCard again partners with PayPal and GoFundMe partners with Adyen, while Blackbaud expands its offerings though JustGiving acquisition and Square receives unfavorable response from the ICBA. Here’s your weekly news roundup.

A Payment Facilitator’s Guide to Staying Out of Regulatory Crosshairs

The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have increasingly targeted actors in the payments industry—including processors and independent sales organizations (ISOs)—for allowing “bad” merchants into, or to remain in, the payments ecosystem.

Indeed, when regulators identify significant consumer injury resulting from a merchant’s deceptive practices, it is not uncommon for the merchant’s payment processor and/or ISO to be named as a codefendant in an ensuing enforcement action—along with individuals at the processor or ISO who facilitated the merchant’s processing activity.

Podcast: What You Don’t Know Can Hurt You

This week, we talk with Chris Bucolo, director of market strategy for managed security service provider ControlScan, about e-commerce security.

When they take on payments, companies jump into a complex system where all parties are responsible for maintaining data security.

In some cases, payment facilitators are companies that have created applications that work well for the vertical they serve. But they may not always be aware of all the risk elements associated with that application.

Payment Facilitators and Risk: How the Market Views Submerchants

There is plenty of evidence that the payment facilitator market will grow significantly over the next few years. There are multiple drivers for this growth, including the belief that the increased complexity of compliance/security requirements for merchants will generate more interest in this payments model.

Although there is general agreement that the growth potential is large, there is a divergent set of opinions on how risky the model is, and how risk needs to be approached.

4 Things PFs Need to Know About Anti-Money Laundering

Government regulations laid out by the Bank Secrecy Act and the USA PATRIOT Act require businesses to follow certain practices to avoid facilitating criminal activity, even inadvertently. Together, these regulations form the backbone of anti-money laundering efforts in the U.S.

These government regulations are supported by card brand rules that provide direction on payment facilitators’ specific roles and responsibilities. This is an area that can be daunting to many new and even seasoned payment facilitators.

Dr. Heather Mark, Ph.D., director of compliance for ProPay, shared four critical AML practices the payment facilitators she meets do not always fully understand.