Millions of retailers and service providers accept credit card payments on a regular basis, and with this exchange of sensitive information comes risk for both the merchant and the consumer. These risks can include fraudulent transactions, and unverified chargebacks.
Sensitive business information could be stolen
When a business opens an account with a credit card processing company, it should have a payment gateway programmed into your web page software. This is a secure method for the consumer to input credit card data and have the transaction sent to the processing center. Although careful measures are taken to ensure that all data is encrypted, the information is still viewable once it is in the hands of the merchant account service.
Remember that a merchant account involves transferring funds from the customer’s account to the business’s bank, so there is a risk for all parties involved. When business information is lifted by a hacker or online thief, the business will be vulnerable to fraudulent charges, such as chargebacks and extra charges, in the future.
Consumer information can be stolen
If you are a consumer paying by credit card, your account number, and payment data is generally safe. However, if the merchant you purchase from does not have a secure payment gateway system in place, your information could be stolen. Even if the merchant has all the proper safety measures, this data is stored with the credit card processing company and, therefore, is vulnerable to hackers. In this case, your banking, personal, and credit card information can be obtained and then used to make unauthorized purchases. This can be disastrous because it is difficult to rid your credit history of all fraudulent card use.
Protect your information
Before opening a credit card merchant account, businesses need to check out the credit card processing company and view its history. The company information can usually be accessed through an online search.
If you are a consumer, remember that some credit card companies guarantee the removal of questionable charges. These are the safest accounts to use because you will not be burdened with the task of trying to clear your name with the credit reporting agencies.
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