Check out Cam Merchants Should Be Wary of Fraud, by SegPay CEO Cathy Beardsley, published on XBiz.com. The article explains how Cam sites, or any business where customers can “feed the meter” by making multiple payments to extend a session, can limit risk. For example:
Payment processors want to encourage responsible spending while protecting merchants from increased exposure. That’s why, for the bigger spenders, I recommend setting velocity limits. Limiting activity on customer attempts and approvals is a quick way to limit chargeback exposure until a customer can be verified. Merchants should determine how many transactions and what spending level to allow during a given period that won’t create too much friction in the checkout process for the majority of consumers.
When those limits are reached, customers should be placed on hold and pushed to an additional verification process. This could be as simple as having the consumer submit a digital photo of their credit card (masking all but the first six and last four numbers) and a government-issued ID. This process will save you from potential headaches associated with fraud; and as the legitimate big spenders are “stickier” than some other verticals, they will tolerate the disruption in order to continue chatting with their model of choice.
Read the entire article on XBiz.com.