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Mitigate Risk of Payment Fraud
Emily avatar
Written by Emily
Updated over a week ago

With any payments system where you are directly collecting payments from your customer, there are some risks to be aware of. The most common risks associated with this are payments made with stolen bank account, insufficient funds, or theft. Textedly offers many layers of protection to help mitigate these risks, but to ensure a safe commerce process you should also be monitoring for fraud.

Please refer to Textedly’s Payments Terms of Use for any questions about using payments.

Payments Made With Stolen Account Information

There is always a possibility of fraudsters using stolen or fake credit card information to make a purchase from you. Businesses offering tangible goods tend to be bigger targets to this type of fraud than businesses offering services to B2B customers. However, no business can be completely without risk.

Legitimate account holders will report a transaction to their bank that they believe to be fraudulent. They will then issue either a chargeback for the charge if it was a card transaction or an ACH return if it was an ACH transaction. The payment of the fraudulent charge should then be returned back to the legitimate account holder. Textedly’s payments partner, Stripe, will automatically handle this exchange. The fraudulent amount charged will either be deducted from your future payouts or your business account will be debited if the amounts are not enough.

Textedly’s payment tool offers layers of protection against fraudulent transactions in a number of ways, which include:

  • Fraud scoring: Stripe provides Textedly with proprietary signals to evaluate the probability that a card transaction is fraudulent. Any high fraud risk transaction is then automatically blocked by Textedly for your protection.

  • Cardholder Verification Value (CVV) and Address Verification System (AVS): Customers must enter CVV and AVS information associated with their card when using the payments tool. This information will then be checked with the card issuer by Stripe to ensure the information matches. Textedly will automatically block the transaction if Stripe reports that the information does not match.

Even with the layers of protection Textedly offers, any form of payment exchange has associated risks. Here are some ways you can protect your business to mitigate your risk of fraud:

  • Turn on your payment notifications so you can easily monitor your transaction history daily. Please contact Textedly support immediately if you have any suspicious transactions.

  • Consider verifying the identity of your first time buyers, especially if you are providing goods of a high value. Verifying the identity of a customer can be as easy as speaking to them on the phone and requesting a document that includes their address.

  • Look for key indicators of an illegitimate buyer. Some signs of an illegitimate buyer could be the use of a gmail address for a B2B buyer.

Insufficient Funds for ACH Transactions

Guaranteed funds refer to any transaction using credit or debit cards. This means that if the transaction is marked as approved, the credit card network guarantees against the possibility of insufficient funds. You will know immediately if the funds are guaranteed since card payments are immediately approved or declined.

For an ACH payment, on the other hand, it can take up to a few days to be approved.

There is no way to know whether the funds in the buyer’s account are sufficient enough for the purchase during this waiting period. The same risks apply when accepting checks.

You may want to consider waiting until an ACH transaction is approved before you provide goods or services to the customer if you are not confident they are legitimate. To check on the status of a transaction, navigate to your transaction dashboard within the payments tool. If you do not have the option to wait, you will want to consider having the buyer pay with a card.

Theft of your Transaction Proceeds

It is vital to protect your Textedly account information. If someone gets access to your Textedly account, they can access your payment account settings and change the bank account information to receive your payouts. Here are some best practices to help protect your Textedly account from unauthorized parties:

  • Turn on payout notifications. By doing this, you will receive an email from Textedly every time a payout is processed. You will want to then check your bank account to confirm that the payout was received. Please contact Textedly immediately if you do not receive the payout.

  • Activate two-factor authentication (2FA). 2FA will help to ensure that it is you accessing the account and no-one else.

  • Protect your HubSpot login credentials. Never share your Textedly log in credentials and change your passwords often.

Please contact Textedly support immediately if you do not receive a scheduled pay out or suspect your bank account information has been changed by an unauthorized party.

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