Risk Management

Risk Management Process

Online shopping is clearly an excellent opportunity for any merchant to grow the business and increase revenue.

However, the threat of online fraud and identity thefts can create damaging leaks to your revenue and has the potential to adversely affect your reputation beyond repair. As an e-Commerce entity your interface with your customer is virtual and therefore reputation and trust are of utmost pertinence in the online business space. Hence, preventing online fraud is a vital task for every successful e-Merchant and it is the foundation of building your reputation online.

The platform has been developed with the combination of best practices, leading technology and human intelligence, Master Gate Pay has developed a 'Fraud & Risk Management Tool’ that makes online transactions safer for our merchants. It is an unparalleled Empirical Fraud Detection engine that provides an unprecedented level of risk detection that can help to improve transaction success rates and reduces both expenses and potential chargeback loss.

HERE IS A QUICK SUMMARY OF THE PROCESS

Once the data is collected from your(merchant’s) customer, every single field is assessed and monitored by our experts and every transaction is mapped against a comprehensive negative database. This helps us trap fraudsters by looking for a match among certain parameters against prior fraud cases and illegal fraudulent activities registered in our system and warn you in time.

Each transaction that passes through the Master Gate Pay payment facility is assessed and verified using over 50 parameters. Comprehensive checks and the robust system which helps minimize your risk.

After the assessment transactions are flagged as High Risk if any suspicious activity is noted and where the transaction is marked high risk, you will need to provide additional data as specified by our risk team to process the transaction. And even you have the power and an intelligent choice to process the flagged transaction at your own discretion.

A SNAPSHOT OF SOME PARAMETER CHECKS WE PERFORM:
Address Verification System (AVS)

It identifies the person claiming to own the credit card. The system crosschecks the billing details of the credit card provided by the user against the address at the issuing bank of the credit card.

CVV Matching

It verifies whether the person making the transaction is in possession of the credit card by validating the three-digit code on the back of the card.

Negative and Positive Databases

Checks against Negative Database is done to identify those who have done fraud or chargebacks in the past. Checks against Positive Database are also done to recognize trusted customers who have made genuine online payments in the past. These processes help weed- out bad transactions and to speed up retention of good and genuine customers.

Geo-IP Address Verification

It flags transactions coming from a suspicious computer configuration or categorically high-risk regions.

Bin Checks

It validates the card-issuing bank by checking the BIN (Bank Identification Number) on the Credit Card.

Velocity Checking

It screens multiple payments that come from the same IP address by checking for repeated transaction attempts from the same computer or network.

Components of our fraud transaction monitoring

We have an effective monitoring system that comprises of the following components:

  • Monitoring past transactions: Our team periodically reviews MIS reports and/or alerts, as well as the establishment of proper review procedures to ensure that customer transactions are monitored on a risk-sensitive basis. Periodic transaction- monitoring reports covers should at the minimum covers unusually large or frequent transactions.
  • Identification of suspicious transactions: To determine whether a transaction or activity is unusual or suspicious (fraudulent), an effective transaction-monitoring system is in place that includes procedures to not only evaluate the current transactions of customers, but also the pattern of transactions and transaction flow. The current transaction is compared with past transaction patterns and the customer’s risk profile.
  • Management of suspicious transactions: Our monitoring system identifies suspicious transactions identified and then these transactions are carefully examined and investigated, the follow-up action taken tracked and proper audit trails maintained for inspection by auditors and the regulator. It is therefore important that proper policies and procedures on transaction monitoring are developed and maintained by banks and financial institutions. The procedures should clearly set out the responsibilities of individual departments, e.g., the Business, Compliance, Fraud, Risk and Audit departments, engaged in transaction monitoring.
  • Review of processes and system parameters: Regardless of whether an automated system is used, effective monitoring requires regular review and updating of the parameters or criteria used to generate monitoring reports or issue alerts. We at Master Gate Pay emphasize on Regular enhancements in our system and processes with respect to the overall fraud and risk management of transactions which also considers changes in business operations and new fraud typologies. Any enhancements/changes in the system is properly documented and approved by the management.
  • Management commitment: We at Master Gate Pay give the utmost importance to transaction monitoring and management. Prerequisite for establishing and maintaining an effective transaction-monitoring system is the support and commitment of an organization’s senior management. Our management is highly committed towards continual enhancement of our fraud and risk management systems. No transaction-monitoring system can be effective in the absence of adequate resources to maintain and operate the system.

DISPUTE

Dispute is a disagreement against a transaction raised by the cardholder (end-user) and reported to their card issuing bank.

A Dispute is a provision by banks and card networks such as Visa & MasterCard to protect buyers from unauthorized or fraudulent payments. Once the cardholder files a complaint, the bank reports the same to Payment Gateway and initiates an investigative procedure.

Reasons of Dispute: There could be several reasons of Dispute against a transaction. A list of the most common reasons of Dispute is listed below.

  • A customer has not received goods or a service.
  • The received goods or service are not as described.
  • The customer needs more details, such as a copy of the transaction or a receipt.
  • I have neither incurred nor authorised the above transactions

Generally, Disputes can be associated with unsatisfactory customer service/product or poor service delivery experience. Disputes can also be filed if the customer suspects fraudulent activity on their card.

Higher Disputes Ratio : It is best to avoid any kind of Dispute, as banks and card networks can label your business as a fraudulent/high risk business, hampering your image. A customer has a right to file a Disputes for the transaction made, which means your sales are reversible for that amount. A high number of Disputes can lead to the banks holding remittances for the business as well. The worst-case scenario could be a ban of online payment services imposed upon the business.

Dispute Resolution Process:

Disputes should be considered high priority issues due to the involvement of risk teams of both the customer’s bank as well as our partner banks.

Notification about the dispute : We will notify you by email/telephone about the dispute, mentioning the payment ID and the reason of Dispute, if provided by the bank..

Review the Dispute

To represent the Dispute, review the Dispute and explain to us the chain of events that took place.

  • In case the goods/services have not been provided, review the issue and let us know if the customer is willing to accept the goods/services.
  • In case the goods/services have been provided, share the proof of deliveries, invoices, any other authorised proof of product/service delivery.
  • In case of a duplicate payment made, let us know so we can ask the bank to refund the amount back to the cardholder.

Share documents

Share all documents as per the requirement of the bank with us. We will represent the dispute on your behalf.

Chargeback Management:

Chargeback is a process that allows the customer to reverse all kind of transactions when there is a problem with the goods or services they've purchased using any of these options.

Master Gate Pay has automated process of chargeback management where Master Gate Pay mark chargeback in system and automated email flow to merchant to submit documents. Merchant can upload the documents on merchant portal as per acquiring bank TAT.

Master Gate Pay Operation’s team will verify the document and send it to acquiring bank for Verification. Acquiring banks verify the document and accordingly send it to schemes. Visa/Master/issuing bank to investigate the chargeback and update the status to acquiring bank as per TAT. Master Gate Pay put payment on hold till update from acquiring bank comes. Depending on Acquiring bank revert, Master Gate Pay reverse the amount to customer or make the payment to merchant. Master Gate Pay follows CTS ratio as per acquiring bank.

Reason for Chargeback

Chargebacks are common practice and sometimes unavoidable. There are multiple reasons why a buyer would request a chargeback, but most fall under these explanations.

Fraudulent transactions

This happens when the credit card is used without the authorization of the credit card holder. Merchant is fully responsible to remedy this chargeback reason. For example: the credit card is stolen and used to make purchases at the merchant’s online store.

Service dispute

Disputes can occur when buyers feel that a service was not rendered, or an item was not as described. In these cases, buyers will often request a chargeback. Merchant is fully responsible to remedy this chargeback reason. Example: an item purchased in a merchant’s online store does not match the description.

Process of chargeback

In case of any Chargeback reported by the acquiring bank an immediate query is raised with the merchant to obtain documents for representation of the case such documents will include Service Rendered Proof Service, Invoice Receipt, and Delivery Receipt of the Product.