Why the Verification Process You Choose Matters

Verification process payment processing

The realm of payment processing has just become so much easier for you. You’re about to learn how the verification process you choose holds immense significance. It can spell the difference between financial stability and recurrent disputes, losses, and undue stress. As a merchant, you can engage in transactions directly from customer bank accounts. You might wonder why, because this is an entirely different approach from credit card processing in many ways. Purchases that occur through direct drafts will safeguard against risks like insufficient funds and chargebacks. Let’s delve into the various types of verification methods and their impact on your high-risk business operations.

Account Verification and Daily Balance Check

Initiating customer purchases with basic account verification can provide security and simplicity. Confirming the existence and active status of a customer’s account, along with checking for a positive balance at the start of the business day, offers you assurance. However, it falls short of guaranteeing fund availability at the time of a transaction.

Account History Review

You could delve deeper and examine a customer’s account history for past instances of bounced checks or non-sufficient funds (NSFs). Doing this can offer you valuable insights. However, a history of bounced checks doesn’t always indicate a customer’s current financial health. It does provide merchants with contextual information about the account holder’s reliability and trustworthiness.

Real-Time Funds Verification for High-Risk Merchants

Business owner doing accountingFor comprehensive risk mitigation, real-time verification of funds emerges as the top-tier solution. This proactive approach involves scrutinizing consumer accounts at the moment of purchase. Real-time verification provides high-risk merchants with immediate visibility of available funds. By verifying fund availability at the point of sale, your business can confidently proceed with transactions. You can drastically minimize the risk of financial losses with this method.

All-in-One Fund Verification Services for High-Risk Merchants

Try a comprehensive verification service that offers a holistic solution to payment verification challenges. By combining account status verification with real-time fund validation, eDebit Direct empowers you with accurate and in-the-moment insights into customer accounts. Armed with this information, businesses can assert greater control over their cash flow. You can fortify the financial health of your enterprise without fear of unpredictable ISFs, fraud, and chargebacks.

How You Can Take Advantage of Robust Verification Processes as a High-Risk Merchant

Your ability to overcome the debilitating issues that are specific to the high-risk industry can be resolved through ACH processing. Here are additional benefits you can experience when choosing direct bank drafts over credit card processing:

Enhanced Decision-Making for Your Business

Access to comprehensive account information enables merchants to make informed decisions. This allows you to choose the correct course of action for transaction approvals, allowing you to foster prudent financial management practices.

Improved Cash Flow Management for High-Risk Industry Merchants

Real-time verification of funds empowers your business to maintain optimal cash flow. The verification process ensures that transactions are executed only when adequate funds are available. This greatly minimizes the risk of overdrafts or delayed payments.

More Control Over Business Finances in the High-Risk Industry

Instead of immediately issuing refunds, you will have the opportunity to remediate customer complaints. Credit card processing companies tend to refund purchases after a customer complains. Banks, on the other hand, request that the customer contact you first. This gives you the chance to speak to the customer directly to resolve the issue. You can also make sure that the customer provides proof and is not making a fraudulent claim.

Compliance with Regulatory Requirements

Live validation helps businesses uphold regulatory compliance. With this tool, you will be able to ensure adherence to industry standards and guidelines governing payment processing and financial transactions. By incorporating high-quality validation mechanisms into your payment systems, your small business can demonstrate due diligence in safeguarding against fraudulent activities. This will also reduce the likelihood of regulatory penalties or sanctions.

Customer Trust and Satisfaction

By prioritizing the security and integrity of transactions, merchants instill confidence in customers. You can foster trust and loyalty throughout your customer base. Reliable payment processing contributes to a positive customer experience, enhancing your brand’s reputation.

Mitigating Financial Risks

Business owner taking notesWhen you implement live verification processes, you reduce the risk of accepting fraudulent payments or transactions from underfunded accounts. This helps safeguard your business against financial losses and disputes. You minimize the likelihood of overdrafts, NSF (non-sufficient funds) situations, and frequent chargebacks.

In the competitive landscape of payment processing, the verification process greatly impacts the financial well-being of your business. By embracing advanced verification mechanisms, such as those offered by eDebit Direct, merchants can fortify their operations, mitigate risks, and optimize cash flow management. Don’t leave your business vulnerable to financial uncertainties. Partner with eDebit Direct today to elevate your payment verification processes and secure the future success of your enterprise.

Some Statistics That High-Risk Merchants Should Know

Now you know that live validation of a customer’s bank account before initiating a draft payment serves as a safeguard. Here’s an in-depth exploration of the statistical risks high-risk merchants currently face:

$191 Was the Average Cost of a Chargeback

The average disputed transaction for a chargeback was $90, resulting in an average cost of $191 for every chargeback, according to CB911.

1/3rd of Chargebacks are Fraudulent

The leading cause of chargebacks is fraudulent activity, according to a Clearly Payments study. Fraudulent behavior amounted to 34% of all chargeback activity.

Merchants Have a 21% Chargeback Dispute Win Rate

Not all merchants will dispute a chargeback. Of the ones that do, only 21% won their case and weren’t required to refund customers, according to a ShiftProcessing study.

238 Million Chargebacks in 2023

Globally, there were a total of 238 million chargebacks in 2023 according to an Ethoca study by Mastercard. It is projected that there will be 337 million chargebacks by 2026.

30% of Customers Had Purchases With Stolen Credit Cards

According to a ClearSale study, customers claimed that they requested a refund because the purchase was made using a stolen credit card. This was one of the most common reasons for chargebacks.

26% of Customers Claimed Purchase or Service Never Arrived

Customers initiated a chargeback because they claimed that the product never arrived, according to ClearSale.

15% of Customers Claimed They Received the Wrong Product

Chargebacks were also made because the customer stated they received the wrong product, according to a ClearSale study.

Every $1 of Fraud Costs US Businesses $3.36

In 2020, it cost US companies $3.36 for every $1 in purchases caused by fraudulent customer behavior, according to a ShiftProcessing study.

Only 60% of Merchants Dispute Chargebacks

Unfortunately, not all business owners have the time or the money to dispute chargebacks. According to ShiftProcessing, only 60% of merchants attempted to dispute them.

Live validation serves as a proactive measure in fraud detection and prevention by flagging suspicious or unauthorized transactions in real-time. By cross-referencing transaction details with account information and transaction history, merchants can identify irregularities. For example, inconsistent payment patterns and discrepancies in account ownership can be an indicators of fraudulent activity. You can take immediate action to prevent fraudulent activities before they occur.

Live validation instills confidence in both merchants and customers by strengthening the integrity and security of payment transactions. Live validation of customer bank accounts before initiating draft payments empowers businesses with real-time insights. You can be protected from risks associated with insufficient funds, chargebacks, and fraudulent behavior. Start by leveraging cutting-edge validation technologies and integrating them into your payment processing systems. You can improve the overall payment experience for both businesses and customers alike.

Learn more about live validation by speaking to one of our industry experts now. Schedule a free consultation today.

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