Merchant acquirers are making big changes to fight a recent surge in card fraud, but those changes could cost credit unions a lot of money.
According to Monica Eaton-Cardone, co-founder and COO of dispute mitigation and risk management firm Chargebacks911, a spike in card-not-present fraud in recent months has prompted acquiring banks to put more and more online retailers on their unapproved lists. The result is a mushrooming number of declined transactions, which could threaten interchange income for credit union card issuers.
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“How do you predict behavior? It always starts with a trial-and-error process,” she said of the algorithm approach.
“Unfortunately, you have innocent retailers who become guinea pigs, innocent cardholders who become guinea pigs.”