With e-commerce businesses reeling from various form of online frauds, including fraudulent chargebacks, the news that the industry often has to deal with the loss of revenue, exceeding 9$ billion each year is indeed shocking, to say the least.
This has prompted several governments t set up work study groups to assess the risk posed by online payment options and to come up with viable alternatives, such as electronic check payment processing and to effectively curb any and all forms of online payment fraud. But before that, it is time that you took a closer look at the various forms of online payment fraud, to understand the situation better.
Various types of online frauds
Electronic check payment processing
In fact, most online businesses have become aware of the fact that e-check payments in the USA can be utilized effectively to combat payment frauds like chargebacks. In fact, some of the top retailers have started introducing this option as one of the top online payment options - for example, if you happen to be purchasing an item online from an online retailer in Colorado, you are bound to come across ‘echeck services in Colorado’ or ‘accept payments or send payments by E-check’ as one of the many payment options, when checking out.
How it works-
E-check processing in the USA basically works like this – when a consumer wants to purchase a certain item with an online retailer and chooses e-checks as one of the payment options, he is immediately prompted to enter his bank’s details including routing number and his checking account. He would also be required to add some personal ID such as his license for validation. The system then automatically verifies the bank information and validates and confirms the user’s identity as well. Then, a specified algorithm assesses the user’s risk profile and based on that, approves or declines the transaction.
After this, the electronic check payment processing moves to the next stage where the online retailer asks the user to verify and confirm the transaction. And on the confirmation, the retailer immediately withdraws the amount from the user’s checking account. It is that simple and at no point of time is the online retailer exposed to any fraud online. The merchant usually receives the funds in his bank account, by the next banking day. It is that fast, effective and free from any undue risk. And you can see why most online retailers prefer electronic checks as one of the many payment options.
As you can see, when it comes to online payment frauds, such as chargebacks, E-Check services in the USA happen to be one of the most effective methods there is, to combat online payment frauds, and why you may want to start shopping at retailers that display a payment option for the same.
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