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Education

The shift in risk perception, post-pandemic

By Elaina Smith type and card-present don't translate to lower likelihood of
Secure Bancard loss. Risk perception has shifted. The simplistic methods
some companies used to underwrite risk before 2020 no
merchant portfolio made up of mostly retail longer suffice. This paradigm shift underscores the need
businesses is inherently less risky than one for more sophisticated risk monitoring tools.
made up of mostly ecommerce. Or is it? The Single-platform merchant and risk management
A pandemic caused numerous businesses to
change the ways cards were accepted and products or Many ISOs rely on a mix of processor applications,
services were delivered, triggering payment processors to homegrown systems and third-party services to manage
adapt to these new business needs. But those weren't the merchant portfolios. This dispersed infrastructure is ripe
only changes for payment processors. for errors, particularly in risk. If risk managers review
transactional data to make risk decisions, but then must log
Processors and ISOs that held portfolios consisting mostly into a separate system to implement the requisite changes,
of retail and restaurant businesses—the very type of such as a merchant hold or reserve setting, what is the
portfolios that have long been considered low risk—fared likelihood these changes will be completed accurately?
the worst during the pandemic.
The complexity of using different systems is eliminated
So, what are the new definitions of high risk and low when ISOs bring decision-making and resulting actions
risk in merchant portfolios, and how can these risks be to a single platform. The only way to accomplish this is
sufficiently managed? In this post-COVID world, business to perform all merchant management functions, such
as billing and funding, and risk review on the
same platform. Anything less introduces a higher
likelihood for human error and diminishes the
overall risk management program.

Underwriting and continuous risk monitoring
Payment Solutions The pandemic moved the underwriting goalposts for

For App Developers many ISOs. Card-present, future-delivery business
types that had long been considered low risk (hotels,
catering and events) suddenly posed a real threat
of loss to ISOs. This shift forced us to revisit how
eProcessing Network provides we underwrote new business. Business type and
payment solutions that intergrate presence of card were no longer enough to determine
directly into web pages, shopping likelihood of loss. If these types of businesses, along
with retail and restaurants, could no longer be
carts, third-party software, considered low risk, was anything left in the low risk
and mobile apps for both iOS category?
and Android. A solid underwriting program remains a necessity,
but if the definition of low risk is constantly in flux,
ePN’s FREE Developer the only remaining solution is a robust, continuous
Support Center provides risk monitoring program once merchants are boarded
and processing.
online documentation,
sample code, and support Again, this approach employs a single merchant
for registered developers. and risk platform with timely, accurate data and
sophisticated risk metrics. ISOs can hedge against
risk by reviewing current processing trends against
ePN has payment options to fit all of historic averages and by continuously monitoring
your merchant’s needs credit, retrieval and chargeback ratios. A robust risk
(800) 296-4810 scoring system that prioritizes review of merchants
that have riskier activity in any given day is also
eProcessingNetwork.com required. No ISO can review every transaction for
every merchant, but with the proper tools, ISOs can
© eProcessing Network, LLC. All Rights Reserved. All trademarks are the property of their respective holders. ensure the right transactions are getting reviewed.

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