Fake sub-merchant accounts and counterfeit sellers are flooding eCommerce platforms, including giants like Amazon, prompting a fraud alert that all merchant acquirers, payment facilitators and ISOs should take seriously.
Fraudsters are setting up fake storefronts to sell counterfeits and other suspect goods more easily than ever, using increasingly sophisticated techniques to circumvent traditional fraud detection measures. For example, even though many fake sub-merchants on Amazon have addresses listed as operating in the USA, they are actually based in China.
How can you ensure that your sub-merchants are really located in the area they claim to be?
When onboarding new sub-merchants, merchant acquirers and payment facilitators do little or no checking of an applicant’s actual location in order to verify that it matches what they are claiming on their online application. If they check at all, it’s simply an IP address check, which all fraudsters know can be easily spoofed by using a VPN. It’s no exaggeration to say that every online fraudster will try to hide their actual location.
But there is help. By integrating accurate, authenticated and unaltered location data into your sub-merchant onboarding process, you can quickly detect a fraudster and stop them before they can even get on your platform.
GeoGuard has developed award-winning geolocation solutions that have already reduced fraud by 90% in the iGaming industry. These proven solutions are available today and can be easily integrated into your onboarding processes to stop fraudulent sub-merchants from getting onto your platform.
Mastercard expects 50 million new online businesses to be onboarded by 2025. Fraudsters will be looking to take advantage of this frenzy of activity in order to “slip through” the KYC cracks that exist in many outdated onboarding systems. It’s time for merchant acquirers and payment facilitators to take advantage of new data points such as accurate, authenticated and unaltered location data, to both detect and stop fraudsters before they can even start.
Check out our White Paper to learn more about the advantages of integrating location data into your sub-merchant onboarding processes.
