Advancements in payment processing technology have streamlined cashless transactions. You can now send thousands with a push of a button. However, they’ve also increased your risk of fraud. Statistics show that the U.S. loses $221 million to wire fraud per annum. So, if you don’t already know how to avoid wire fraud with high-risk merchants and small stores, now’s the best time to do so.
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Don’t automatically accept every payment request you get. Go through the following wire transfer procedures best practices to minimize your risk of fraudulent transactions:
Contact the merchant involved before proceeding with any wire transfer. Most requests should indicate the store’s email address and phone number, but we advise calling for a verbal confirmation.
Business owners could take days to reply via email. Also, you’ll feel more reassured if you could talk to the merchant’s customer service team and secure wire transfers yourself.
Learn how to verify wire instructions changes. Hackers can override legitimate transfer requests, pose as the merchant via email, and alter the transaction. Unfortunately, you can only expose fake changes yourself. For this reason, always double-check any changes your merchant makes with their wire transfer requests.
You’ll likely receive wire transfer requests regularly if you have subscriptions to several products and services. It might be easier to automate payments for these transactions. However, for wire transfer security, we strongly suggest reviewing them individually. That way, you can easily spot requests you find out of the ordinary.
One of the simplest wire transfer procedures’ best practices is to double-check the request sender’s email. See if it matches the email you’ve already had a conversation with before. Watch out for minor alterations like an extra dot or dash — which are easy to be overlooked.
To double-check the sender’s email address, forward the email request instead of replying to it. Send the email to the address your merchant previously gave you.
Wire transfers should always follow a dual control system. For instance, a common wire fraud prevention tactic is to have different individuals initiate and approve transfer requests. Leaving the entire transaction to just one user poses risks for all parties involved.
Many merchants send time-sensitive requests for wire transfer security. However, super-urgent transfers coercing you into sending funds right away are a red flag. Transfer requests should always leave ample time for verifications.
Apart from learning how to verify wire instructions, make a habit of authenticating transaction purposes. Avoid confidential transfers. When in doubt, always call the merchant’s number for a verbal confirmation.
Overall, the best way how to avoid wire fraud with high-risk merchants is to follow a solid fraud prevention process. Only proceed with a payment request if it passes your screening. Also, ask your accountants and bookkeepers to observe the same practices if they have access to your incoming wire transfer requests.
Do payment processors keep rejecting your merchant account application? Processing Card can help! Check out our brief piece explaining high-risk merchant accounts and how to qualify for one.
