#secure payment processing

For any U.S. business, cash flow isn’t just important—it’s the lifeline that keeps operations running, inventory stocked, and employees paid. If you’ve ever found yourself asking, why does Chase take so long to process payments?, you are certainly not alone. The frustration of delayed funds—whether they’re stuck in “pending” status or held for review—is a common challenge for merchants.

At Great West Pay, we believe that waiting days for your money should be a relic of the past. We know that understanding why delays happen is the first step toward finding a faster, more reliable merchant service solution. This article breaks down the complex world of payment processing, highlights the specific reasons for delays at major institutions, and shows you how choosing the right partner can streamline your cash flow.

The Hidden Journey: Why Payments Aren’t Instant

While accepting a credit card at the point of sale feels instantaneous, the actual transfer of funds, known as settlement and funding, is a multi-step process.

A transaction moves through authorization, posting, and clearing, with each step potentially adding time before funds become available. This entire journey involves several entities, including the customer, the business, the issuing bank (customer’s bank), the acquiring bank (merchant’s bank), and the card networks (Visa, Mastercard). Settlement—the final transfer of funds from the buyer’s account to the seller’s account—typically takes one to three business days for credit card payments.

So, what specifically slows down the process, causing you to wonder why does Chase take so long to process payments?

1. The Technology Barrier

A significant factor contributing to slow processing is outdated infrastructure. Many large financial institutions rely on legacy systems. While these systems are constantly being updated, discrepancies and compatibility issues between multiple gateways and processors can cause lag time, meaning some payments complete instantly while others take days.

Chase Paymentech, for instance, is classified as a legacy technology provider, and one major drawback is its outdated technology compared to newer industry players.

2. Security Holds and Verification

Banks frequently place temporary holds or delays on transactions, which is often reported by users. These holds are usually implemented for risk or fraud protection, especially for large or atypical deposits. For example, if a user attempts to transfer a large sum, the bank may flag it as atypical activity, triggering a security hold for review. A fund hold is a temporary restriction on availability, and while it safeguards your money, it introduces frustrating delays. These holds usually lift within a few business days.

3. Account Status and Policies

The time it takes for your funds to become available directly correlates with your account setup and banking relationship. For Chase customers:

If you use their QuickAccept® solution with a Chase checking account, you generally receive same-day funding if you settle by 8 PM ET, excluding Saturdays.

If you use standalone merchant services with a Chase bank account, you typically receive next-day funding.

However, if you use a non-Chase banking account, funding requires a transfer between financial institutions, meaning you will receive funds in 2–3 business days.

Furthermore, transaction posting procedures are specific to each bank and depend on the payment type and business rules. Insufficient funds or account-related issues can also lead to processing delays, requiring additional system verification.

Merchant Pain Points: Beyond the Delay

While delays impact cash flow, Chase merchants sometimes report other issues related to their payment processing relationship:

Customer Service Challenges: Some users describe Chase Payment Processing as “horrendous” and criticize the customer service, noting extreme difficulty in reaching representatives by phone and reporting hours-long hold times.

High Costs and Extra Fees: Chase is “definitely not the cheapest option on the market”. Their standard flat rates are high—starting at 2.6% + $0.10 for taps/swipes and 2.9% + $0.25 for online purchases. Merchants also frequently see a “plethora of other charges” on their statements, such as a Voice Authorization fee ($0.90), Chargeback fees ($10), and a monthly maintenance fee.

Negotiation Gaps: While larger businesses may qualify for competitive interchange-plus pricing, their overall pricing is not as competitive as other providers, and they often acquire clients through banking relationships rather than market-leading rates.

Actionable Steps to Minimize Your Wait

As a merchant, you can take proactive steps to ensure smoother, quicker processing regardless of your current provider:

Prioritize Transaction Accuracy: Always confirm sufficient funds are available and double-check account numbers and payment details before initiating a transaction to avoid rejections and delays.

Choose Faster Methods: Where possible, choose quicker transaction types and schedule payments during business days and hours.

Adhere to Limits and Documentation: Avoid drastically exceeding your stated processing limit, as this can trigger holds or account termination. For large transactions, ensure you have proper documentation, such as a numbered invoice and signature, ready to provide if requested.

Manage Chargebacks: High chargeback rates can signal dissatisfaction or unverified cards, which is detrimental to your processing history. Tools to minimize chargebacks are key.

The Great West Pay Solution: Optimized for Speed and Value

While industry standard settlement time is often one to three business days, Great West Pay is focused on optimizing your cash flow with modern technology and transparent pricing.

We understand that for U.S. businesses, reliable and fast funding is paramount. Unlike legacy providers that struggle with compatibility and charge high default rates, Great West Pay aims to provide the efficiency and reliability that today’s market demands, offering a system where deposits are fast and rates are highly competitive.

Failed payments do more damage than most businesses realize. Customers leave, subscription renewals fail, and international orders get abandoned halfway through checkout. Businesses are now switching to Alternative Payment Methods, smarter payment routing, and stronger international payment processing to improve approval rates and reduce payment friction across global transactions.

Most merchants only discover payment processing problems after revenue starts growing. Payout delays, rolling reserves, fraud reviews, and settlement holds can create major operational pressure for high-risk businesses. This guide explains how modern high-risk payment gateways and scalable international payment processing systems reduce those risks while supporting long-term growth.

The holiday season brings a surge in sales but also increases risks like fraud and chargebacks for high-risk businesses. This blog explains how high-risk merchant accounts address these challenges with fraud prevention, chargeback management, and secure payment processing. Read the whole blog to know more.

High-risk businesses often face challenges in obtaining secure payment solutions. WebPays provides high-risk payment processing with advanced fraud protection, chargeback management, multi-currency support, and reliable transaction handling. Contact us today to get started.

If there was an award for the most convoluted industry on the planet, payment processing would probably win by a landslide.

And if we had to choose the most needlessly complex aspect of our industry, it would have to be how processors choose to charge for their services.

Whether they’re using interchange plus pricing, tiered pricing, or flat-rate processing, typically, payment processors aren’t making things any easier for their customers to understand.

What’s more, business owners don’t seem to have any idea what these various fee structures are, how they work, or which one is going to give them the best deal.

As a result of all this confusion, it seems many businesses are just picking a processor at random without even bothering to look into their pricing.

For instance, a Canadian Federation of Independent Business (CFIB) survey found that 54% of respondents have difficulty understanding the contract they have with their payment processor, and 41% are unsure about their pricing model.

The survey also found that credit card processing fees are unaffordable for 78% of respondents.

However, many business owners are unwittingly choosing to partner with processors whose pricing is deceptively expensive, and the reality is they don’t need to be paying this much.

But given the abject lack of clarity in this industry, it’s no surprise that business owners are getting bamboozled like this.

With that in mind, this article will explain the most common pricing models for payment processing, including interchange plus pricing, tiered pricing, and flat-rate processing.

We’ll break down everything in no uncertain terms, exploring the various types of pricing, comparing them, and explaining why interchange plus pricing is your most affordable option.

If you’re new to this topic, and you’re not sure what the term interchange means in this context, you should start by reading our article, What You Need to Know About Interchange Rates in Canada.

And if you’d like a bit of a refresher on how interchange fees are calculated, you should check out our article, What Determines the Cost of Interchange Fees?

Why Is Interchange Plus Pricing the Best Way to Pay for Processing?

This seems like an easy question to answer, but as you may already suspect, it’s not as simple as you might think.

If you want to understand why interchange plus pricing is your best option, first you’ve got to understand the most common methods of paying for payment processing and compare them.

With that in mind, let’s explore the three most common ways to pay for payment processing, so you can understand why your best option is interchange plus.

Tiered Pricing

Tiered pricing is a pricing model where transactions are categorized into different tiers, each with its own interchange rate. The tiers include these three rates:

Qualified Rate: This is the lowest rate, applied to the most standard and secure transactions, such as swiped or chip-inserted debit or credit card payments.

Mid-Qualified Rate: A higher rate than the qualified rate, applied to transactions that pose a slightly higher risk, such as those involving rewards cards or manually entered card information.

Non-Qualified Rate: This is the highest rate, applied to the riskiest transactions, such as those made with corporate or international cards, or transactions that don’t meet certain security criteria.

This model allows payment processors to charge different rates based on the risk and processing requirements of each transaction.

If you’re being charged based on tiered pricing, that means you’ll have to pay a set qualified rate on every transaction, plus a mid- or non-qualified rate that applies to any transaction that doesn’t meet the requirements of the qualified rate.

So, for example, if a customer is paying with a qualified Visa and actually inserting their card into a physical machine, you’ll probably get a rate of around 1.45%.

Then for every transaction that’s mid- or non-qualified, that corresponding rate will get stacked on top of the qualified rate.

In theory, this model could offer some pretty decent pricing if the company gives you a good deal, but unfortunately, that’s rare.

Typically, providers will set their mid- and non-qualified rates high enough to ensure they’ll make the most profit they can, so you’re not likely to get a very good price.

In these situations, businesses will end up paying something like 0.85% on a non-qualified card, plus the qualified rate, which means they’ll be paying a total of 2.30% (1.45% + 0.85%).

But compared to what you’d be charged based on interchange plus pricing, this is a higher rate than what you’d pay for almost any card that’s available to consumers today.

So, as you can see, not only is this pricing model difficult to understand, but it’s also going to cost you more, as well.

Flat-Rate Pricing

One of the most common complaints we hear from potential customers is that they never know how much they’re going to pay in interchange fees each month.

As a result, many business owners choose to partner with a processor that offers flat-rate pricing, as this type of pricing tends to be advertised in a way that makes it seem like it’s more convenient and easier to understand.

But despite the clever marketing, the truth is that this is the most expensive pricing in our industry.

Providers who offer flat-rate payment processing will typically charge a highly inflated rate to make sure that they’re able to turn a profit on most transactions.

For instance, the average flat rate offered in our industry is currently 2.4%, with some processors charging up to 2.65% or even more.

So, while it may sound great to know exactly what you’re going to pay on every transaction, in reality, what this means is that for the lower-end cards and less risky transactions, you’ll have to pay double what you’d pay with interchange plus pricing, or even more.

To give you an idea of how much more expensive this kind of pricing can be, below, you’ll see Visa’s current interchange rates for consumer cards in Canada.

As you can see, only two of the dozens of cards on this list have an interchange rate of 2.4% or higher. And if you look at Mastercard’s rates below, you’ll see that the list looks very similar.

Again, only two of the cards on this list have an interchange rate of 2.4% or more.

Judging by these numbers, if you’re paying a flat fee that’s anywhere above 2%, you could be costing yourself hundreds of dollars per month in extra fees, depending on your volume of sales.

Truth be told, there are only a couple of different card types that cost more than 2.2%, so no matter how you slice it, paying these higher flat rates will cost you more money.

Interchange Plus Pricing

Hands down, this is easily the best pricing in our industry.

You’re welcome to try, but we can guarantee you’re not going to find anything cheaper.

We use interchange plus pricing because it keeps us competitive, it’s transparent and easier to understand, and it aligns with our mission of putting our customers first and always acting in the best interests of business owners.

That being said, rather than having to charge a high enough flat rate to profit on all cards or creating a convoluted tier system, interchange plus pricing allows us to offer you the exact interchange rate set by credit card companies like Visa and Mastercard, plus a small markup (usually 0.20% – 0.40%), which is how we make our money.

This means if your customer pays with a qualified Visa, you’ll pay 1.25% plus a markup of no more than 0.40%. That adds up to 1.65% or less, which is considerably lower than the average flat-rate pricing in our industry.

And that’s it. It’s really that simple.

With interchange plus pricing, you’ll pay whatever the interchange rate is on the card your customer is using, plus our markup.

This allows you to not only save money but also have greater clarity and peace of mind when it comes to your payment processing.

Another great thing about interchange plus pricing is that when credit card companies like Visa and Mastercard lower their interchange fees, this will immediately be reflected on your bill, which isn’t the case with many providers.

But with Lucid Payments, you won’t have to call in to try and get a better deal, or make sure these savings will be reflected on your statement.

The savings will simply be passed on to you the second that rates are lowered.

Interchange plus is also much more transparent, as well, because you’ll be able to see on your statement which cards you processed, what the interchange rates were on those cards, and what our markup is.

Time to Compare

Using the three different types of pricing we’ve covered today, let’s run a scenario to see which one will offer the better deal.

Let’s say your customers purchased $5,000 worth of products this month, and they all paid with a Visa Infinite card, which has an interchange rate of 1.57%.

For the tiered pricing, you’d be paying 1.57% plus 0.85%, so each one of those transactions would cost you 2.42%.

If you were being charged based on interchange plus pricing, you would’ve paid that same 1.57% interchange rate plus our markup of 0.20%, which would cost you 1.77%.

And for flat-rate pricing, you would’ve paid at least 2.4% on each transaction, regardless of what the interchange rate is on the card the customer is using.

So, if we do the math here, the flat rate pricing would cost you $120 in fees for those $5,000 in sales, and the tiered pricing would cost you $115, but the interchange plus pricing would only cost $88.50.

As you can see from this example, clearly, interchange plus is much cheaper.

And if you’re with a processor who charges you anything but interchange plus, you are simply paying too much.

Payment processing technology is constantly evolving, and things can change so rapidly that trying to keep up with it all can be incredibly overwhelming.

But as a business owner, if you want to give your customers what they want, and be able to compete with others in your industry, you can’t just ignore this stuff.

You’ve got to do what you can to stay up to date on the latest technologies and trends in payment processing, otherwise, competitors who are paying attention to this stuff could gain a significant advantage.

And as much as possible, you’ve got to facilitate the forms of payment that consumers want to use, regardless of what they might be.

What’s more, being informed on payment processing industry trends can help you to understand where this technology is going, allowing you to know how your business may need to adapt in the future, and what you can do now to prepare for those changes.

With that in mind, we wanted to help make things easier for you by publishing an article on how payment processing technology will be evolving in 2024.

So, if you’re wondering where payment processing technology is headed, and you want to stay up to date on the latest payment processing trends, then this is one article you’re not going to want to miss.

Trends in Payment Processing Technology for 2024

As we already mentioned, trying to stay on top of this stuff can feel like a full-time job, and believe it or not, sometimes we even struggle to keep up.

But we’ve given it some thought, done some research, and below, we’ve listed what we believe will be the dominant trends in payment processing technology for 2024.

Increasing Popularity of Smart Terminals

Nearly everyone with a cell phone today is using some sort of smartphone.

There are still a few holdouts who will choose to use an old flip phone, for instance, but they’re few and far between, and becoming increasingly fewer.

Similarly, there will come a day when nearly all businesses are using smart terminals, and the popularity of these devices will undoubtedly continue to soar in 2024.

Smart terminals enhance the user experience with intuitive touchscreen interfaces and offer many different functionalities, including things like apps for inventory management, sales tracking, and loyalty programs.

And with all the apps you can download on these things, and all the apps that are currently in development, the functionality of these devices is only going to expand exponentially, and so it’s no wonder they’re becoming so popular and will continue to do so.

Smart terminals continue to stand out for their seamless connectivity, allowing for real-time data synchronization with cloud-based services, CRM systems, e-commerce platforms, and accounting software, which not only streamlines operations but also provides businesses with valuable insights into their performance.

What’s more, their adaptability and ongoing technological advancements position them as an integral tool for the future of retail and service industries, as they do a great job of catering to the dynamic needs of businesses in a marketplace that’s becoming more and more digital.

At any rate, the evolution of smart terminals in 2024 and beyond will also include a focus on sustainability by using things like energy-efficient designs and sustainable materials, which align with the growing consumer demand for more eco-friendly practices.

Terminals with Both Mobile Data and Wi-Fi Capability

In 2024, payment terminals with both mobile data and Wi-Fi capability will continue to gain popularity due to their ability to provide consistent, flexible, and reliable payment processing in many different environments.

This dual connectivity offers unparalleled flexibility by letting businesses operate seamlessly in areas with spotty Wi-Fi by switching to mobile data, allowing transactions to proceed without interruption.

These kinds of terminals are especially beneficial for mobile businesses like food trucks, pop-up shops, and service providers who work across multiple locations, as they can help enhance their ability to offer seamless experiences for customers, regardless of location.

Moreover, having two connectivity options reduces the risk of transaction failures, which is incredibly important for maintaining customer satisfaction, particularly during peak times. This adaptability not only improves operational efficiency but also gives businesses a competitive edge by meeting consumer expectations for hassle-free, quick payments.

Furthermore, the expansion of global mobile networks, including the rollout of 5G technology, will improve the performance of these terminals even more, making them an increasingly attractive option for businesses, especially those that operate across multiple locations.

Better Inventory Management

Inventory management on smart terminals is advancing rapidly, integrating real-time tracking, enhanced data analytics, and seamless supply chain integration, and will continue to do so throughout 2024.

Smart terminals are becoming much more sophisticated, using AI and machine learning to provide predictive insights, automate restocking, and optimize inventory levels based on sales patterns and demand forecasts.

User interfaces are also evolving to be more intuitive, with simplified navigation and customizable dashboards, making inventory management increasingly accessible to businesses of all sizes.

The integration of Internet of Things (IoT) devices, such as RFID tags and sensors, offers detailed tracking of goods, improving inventory accuracy and visibility throughout the supply chain.

In addition, cloud-based solutions are usually a standard feature of these devices, which help to ensure secure, scalable storage and remote management capabilities, and allow businesses to monitor inventory from anywhere.

Furthermore, an increasing number of smart terminals now support sustainable inventory practices, helping businesses to reduce waste and manage eco-friendly products more effectively.

All things considered, the evolution of inventory management on smart terminals in 2024 will be characterized by greater efficiency, intelligence, and integration, empowering businesses to respond more dynamically to market demands and manage their inventory in a more informed and sustainable manner.

Enhanced Security Measures

When it comes to payment processing technology, security remains a major concern.

The surge in digital transactions, not to mention the massive increase in data breaches over the last decade, has necessitated the development of more sophisticated security protocols to protect against fraud and other threats.

As a result, security measures for payment processing are continuously evolving, and the improvement of these safeguards will no doubt continue in 2024.

Technologies like tokenization and end-to-end encryption will continue to become more advanced, ensuring that sensitive information is securely transmitted and stored.

Furthermore, the adoption of blockchain technology for payment processing provides an added layer of security through decentralized ledgers, making transactions virtually tamper-proof.

Moreover, biometric authentication methods, such as fingerprint scanning, facial recognition, and voice authentication, are also becoming more prevalent, offering a seamless yet secure way to verify transactions.

These methods help to not only enhance security but also improve the user experience by simplifying the authentication process, and they will continue to evolve throughout 2024 and beyond.

Integration of Artificial Intelligence (AI)

It seems like every single industry has been disrupted by artificial intelligence technology, and the payment processing industry is no different.

AI already plays a crucial role in the evolution of payment processing technology, as AI algorithms are increasingly used to detect fraudulent activities and analyze spending patterns, offering real-time insights and proactive fraud prevention.

Machine learning models can also adapt and learn from transaction data, continuously improving their accuracy in detecting anomalies and suspicious behaviours.

In addition, AI can help to enhance customer service on payment processing platforms, as chatbots and virtual assistants, powered by natural language processing, provide instant support and guidance, facilitating smoother transactions, resolving issues, and answering questions more efficiently.

That being said, with all the benefits offered by AI, it will undoubtedly become a key element in the evolution of payment processing technology, both in 2024 and into the future.

Contactless and Mobile Payments Expansion

The trend toward contactless and mobile payments continues to accelerate in 2024, driven by consumer demand for convenience and speed.

Near Field Communication (NFC) technology has evolved, allowing for quicker and more reliable contactless transactions, and mobile wallets and payment apps have become more sophisticated, integrating loyalty programs, personalized offers, and financial management tools, which further enrich the experience of users.

Wearable technology has also entered the payment processing arena, with smartwatches and fitness bands equipped with payment capabilities becoming more and more common.

These technologies offer users an unprecedented level of convenience, allowing for seamless transactions with a simple tap or gesture, so it’s no wonder they’re becoming so popular.

If you want to learn more about contactless and mobile payment technology, you can check out our article on The Evolution of Mobile Payment Processing: A Look at the Latest Trends and Innovations.

Cross-Border Payment Innovations

As the global economy becomes more and more interconnected, the need for efficient cross-border payments has become more pressing.

That being said, in 2024, blockchain-based payment systems will be increasingly adopted for international transactions, offering faster, cheaper, and more transparent payment solutions compared to traditional banking systems.

These blockchain platforms can handle multiple currencies and automatically comply with various international regulations, simplifying the complexities of cross-border transactions.

In addition, these platforms will help to facilitate the use of digital currencies, including central bank digital currencies (CBDCs) and stablecoins, which can streamline global trade and commerce by facilitating quicker international transactions and reducing the dependency on conventional banking infrastructures.

These currencies, which will be more and more common as we move into the future, are becoming more integrated into payment processing systems, and that will continue to be the case this year.

Regulatory Evolution and Compliance

As payment processing technology evolves, so does the regulatory landscape.

With that in mind, in 2024, regulatory bodies worldwide will be adapting to the rapid technological advancements in payment processing, implementing new guidelines and standards to ensure consumer protection and the integrity of payment systems.

Regulators will also be focusing on open banking standards, which promote greater transparency and interoperability among financial institutions.

This regulatory environment will help to foster innovation while ensuring that new payment technologies adhere to strict security and privacy standards.

Emergence of Super Apps

The concept of super apps, which consolidate a wide range of services within a single platform, has significantly impacted payment processing technology, and there’s no sign of this slowing down in 2024.

These apps integrate payment functions alongside other services, such as messaging, social media, and e-commerce, creating a comprehensive ecosystem for users.

This integration offers a seamless experience, allowing users to perform multiple functions, including financial transactions, without switching between different apps.

Sustainable Payment Solutions

As is the case with practically everything else, in the world of payment processing technology, sustainability has become a significant consideration, and in 2024, that trend will certainly continue.

Keeping that in mind, this year, and into the future, there will be a growing emphasis on things like eco-friendly payment solutions, including digital receipts and more sustainable payment cards made from recycled materials.

What’s more, the shift toward digital transactions will also contribute to reducing the environmental impact associated with traditional paper-based payment methods.

For most of us, the holiday season tends to be a particularly positive time of year.

We get to spend time with family and friends, give gifts to our friends and loved ones, and enjoy all the festivities that this time of year has to offer.

For business owners, the holidays are also filled with positive vibes, not least because they tend to be the most productive and lucrative time of year.

Unfortunately, the holidays are also a time when things like theft and payment fraud become more prevalent.

According to a report from Visa, during last year’s holiday season, the merchants who tend to be most targeted by fraud, including home improvement and supply, telecommunications, business-to-business, healthcare, automotive, entertainment, education, government, lodging, insurance, airlines, drug stores, and pharmacies, saw a significant increase in this kind of nefarious activity.

For these unlucky merchants, payment fraud increased by 11 per cent compared to the rest of the year, and actually went up 8 per cent compared to what we saw during the 2021 holiday season.

Clearly, the incidence of these crimes is becoming more common, and sadly, most businesses have pretty much come to expect this sort of thing around this time of year.

A survey from Trustmi confirms this, as it found that the vast majority of businesses are more concerned about payment fraud during the holiday season.

We’ve also been seeing this happening more frequently in our own backyard, and it breaks our hearts to see small business owners getting scammed like this.

According to an article from Global News, Exile Electronics, which is a Vancouver-based music store, was hit by three fraudulent transactions last year, totalling more than $20,000.

The article reports that “the credit card owner disputed the charges and was granted refunds, even though the equipment was long gone. The credit card company then came after Exile for the money.”

At this point, they’re on the verge of bankruptcy, but thanks to a GoFundMe they started, they’ve been able to raise even more than their goal of $13,955 thanks to about 250 generous donations.

All things considered, we want to offer some advice on how you can protect your business from payment fraud during the holidays, so we can do our part to help prevent these heinous crimes.

So, if you’re looking to learn about fraud prevention and want to protect your business against fraud this holiday season, then this is an article you’re not going to want to miss.

Why Does Payment Fraud Increase During the Holidays?

If you want to understand how to prevent payment fraud during the holidays, it’s important to know why these crimes are more common at this time of year.

That being said, there are many reasons why payment fraud tends to increase during the holidays, and this includes things like:

Increased Transaction Volume

The holiday season sees a surge in shopping and transactions, both in-store and online, and this higher volume of transactions creates more opportunities for fraudsters to exploit vulnerabilities.

eCommerce Growth

Online shopping continues to grow, especially during the holiday season, and this increase in online transactions provides more opportunities for cybercriminals to execute various types of fraud, such as card-not-present fraud or account takeovers.

New Account Openings

Some people open new accounts (credit cards, store accounts, etc.) during the holidays to take advantage of discounts or offers, and this presents an opportunity for fraudsters to create fake accounts or steal identities.

Fraudulent Gift Cards

Criminals may tamper with or use stolen credit card information to buy gift cards, which can be used for personal use or sold for cash, making them a target during the holiday season.

Lack of Vigilance

With the holiday rush and excitement, people may let their guard down or overlook suspicious activities, making it easier for fraudsters, as they can exploit this lapse in vigilance.

How to Protect Against Payment Fraud During the Holidays

All this talk about holiday payment fraud can be pretty depressing, especially if you own a business.

But the silver lining to all of this is that there’s actually a lot you can do to protect against payment fraud during the holidays, including:

Password-Protecting Refunds

We’ve heard horror stories of business owners hiring a new employee, only to find out after they’ve quit that they were handing out refunds to their buddies left, right, and centre.

With that in mind, make sure to password protect the ability to give refunds, and only provide that password to people whom you know you can trust.

Otherwise, you’re leaving yourself open to a scam that seems like it’s becoming increasingly common.

Prioritizing Card-Present Transactions

For some businesses, this won’t be possible, but one of the best things you can do to protect against payment fraud is to prioritize card-present transactions and limit card-not-present transactions.

Card-present transactions are one of the most secure forms of payment, as they utilize chip-and-PIN technology, so whoever’s using this form of payment will need to have the card in their possession and also know its PIN.

Again, this may not be practical for some businesses, but, if at all possible, you should try to limit the number of phone and online orders you’re doing, and if it’s applicable, you can even incentivize customers to make in-store purchases by offering them discounts if they make a purchase from your store in-person.

Batching Out More Frequently

Some merchants are used to only batching out their terminals once a week, but this can expose your business to serious risks, especially during the holidays, when you’ll probably be doing a much higher volume of sales.

Because if someone decides to steal your terminal before you’ve batched out, the transactions that are still on there probably won’t get processed, and you’ll lose all that money.

Moreover, all the payment data will remain on your terminal until you’ve batched out, and this puts your customers at risk for fraud, as well, as criminals can steal their information.

That being said, during the holidays, or whenever you’re doing a significantly higher volume of sales, make sure to batch out every day, as once the information is sent to your processor, it’s essentially locked in, and you don’t have to worry about anything being taken or lost.

Using Multi-Factor Authentication

If you enforce multi-factor authentication for online transactions, it can add an extra layer of security by forcing customers to use a combination of passwords, SMS verification, biometrics, or one-time codes.

Regular Security Updates and Patching

One thing that you’ll want to do all year round, not least during the holiday season, is to ensure software, systems, and applications are updated with the latest security patches, as outdated software can have vulnerabilities that criminals can exploit.  

Using Advanced Fraud Detection Tools

Another thing you can do to protect against payment fraud all year round is to employ robust fraud detection systems, which can use machine learning and AI to analyze patterns, detect anomalies, and flag potentially fraudulent transactions in real time.  

Monitoring Transactions and Setting Up Alerts

Something else you can do to prevent payment fraud is make a point of monitoring transactions regularly for any unusual or suspicious activity and setting up alerts for large transactions, multiple purchases within a short time, or transactions from new or unusual locations.  

Customer Verification Processes

Implementing strong identity verification methods for new accounts or high-value transactions offers another way to protect against payment fraud. This could involve verifying personal information, sending confirmation emails, or requiring additional documentation.  

Educating Employees

No matter what time of year it is, you should also make sure to educate your employees so that they can recognize potentially fraudulent activity, and create protocols for handling suspicious activities and reporting them promptly.  

Secure Payment Processing Systems

It’s unlikely that you’ll ever come across a company with payment processing systems that aren’t secure, but it doesn’t hurt to ensure your processor is using secure and encrypted systems that comply with industry standards and protect customer data, both during transmission and storage.