What am I Responsible for?

It’s a logical question and worth asking. Think of credit cards as just another payment method. Every payment method comes with its own risk. For example, someone might pay by check, but the check could bounce. You might accept cash, but your store might get robbed, or your safe could be stolen. Similarly, credit cards have risks, with fraud being the biggest concern in credit card transactions.

Here’s what you need to know about handling fraudulent processing via your merchant account:

PCI Compliance: You are responsible for complying with PCI standards. Regardless of size, these rules apply to any business handling credit card data. Compliance means following specific safety measures to protect your business and customers from fraud.

Losses from Fraudulent Transactions: You are liable for any goods or services lost due to fraudulent transactions. If you send out products and later discover that the buyer is not legitimate, you will lose both the merchandise and the sales value. Verifying the legitimacy of buyers is crucial.

Costs and Chargebacks: You will face costs related to the sale, as you would normally. Additionally, you’ll be charged a chargeback fee for any disputed fraudulent transaction. If there are specific documentation requests from the issuing bank, you must pay a retrieval fee per request.

Authorization Fees from Fraudulent Testing: If your website is targeted by fraudsters testing credit cards, you will be responsible for the authorization fees. Set up your gateway’s fraud and daily transaction filters to prevent this. For instance, if you block transactions after a specific number (say, the 20th transaction in a day), any further transactions will be held for review, which can help you avoid thousands of small authorization fees.

By understanding these responsibilities, you can better manage the risks associated with credit card payments.