What makes an account "High Risk" for IntraFirst?

Fundamentally, when you work with any merchant service provider to accept credit cards, you’re inherently dealing with a certain amount of risk – risk that your customer disputes a sale, risk that your company goes out of business and can’t fulfill previous obligations, and risk of being defrauded by a criminal. As your provider, if your business/organization can’t absorb any losses associated with one of these risk factors, IntraFirst and our banks are responsible! As such, we do our best to mitigate risk in our portfolio. A good rule of thumb is that any of the following criteria, all else being equal, will make an account “more risky”:

  • Card-not-present sales: Fundamentally, when you process a credit card sale without swiping/dipping the card, you’re losing a lot of inherent protection. You’re not getting a signature or PIN number, and you’re not able to verify the customer in person. As such, card-not-present sales are far more likely to be charged-back or are later determined to be fraudulent.
  • High future delivery: Whenever you sell a good/service that gets delivered immediately, you are reducing risk – most customers will share frustrations at the time of sale, or will simply not purchase if they’re not satisfied. This changes when you sell something today but don’t deliver for weeks/months. There’s a much higher chance your customer either changes their mind, or changes their expectations of the product/service, thus resulting in a costly chargeback.
  • Direct-to-Consumer Large sales: Historically speaking, the larger a sale is, the more likely your customer will be reviewing the sale for accuracy. They’ll also likely have higher expectations of service/quality – and if anything doesn’t meet their expectations, there’s a much higher chance they dispute the sale. In addition, fraudsters are more likely to try and defraud you out of a large sale instead of a small one. This does not apply to B2B payments, where large sales are common.
  • International Sales: You lose out on a lot of fraud-prevention measures in an international sale. You won’t be able to perform an address verification, since international zip codes often include characters that AVS systems don’t recognize. In addition, you will likely have language barriers to overcome, and confusing shipping requirements. Fraudsters latch onto all of these avenues, and target international sales in particular. You’re simply more likely to encounter losses in international sales.
  • New Businesses: Like any financial service, IntraFirst uses historical data to determine/mitigate risk. So, as a new business, we inherently have less to look at. We can’t view processing histories, bank statements, customer invoices, lease agreements, etc – because they don’t exist yet! As such, we likely will have additional questions or documentation requests for all new businesses.
  • Bankruptcy/Credit problems: At the end of the day, we recognize that a for-profit business is only as strong as its ownership/management. That’s why we’ll always require the owner to sign our agreement – part of the reason is that in addition to researching the business, we want to verify that the person running the business is capable of meeting merchant services obligations. Active bankruptcies are an indicator that payment problems will arise down the line, so we’re unable to support accounts where there’s an active bankruptcy – although we can typically work with merchants who have discharged bankruptcies.