Fraud and risk in the electronic payment space
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Fraud and Risk in the Electronic Payment Space . Michelle Marshall-Thompson VP, Fraud/Risk Officer FirstMerit Merchant Bankcard. General lack of understanding within the payment space. “Authorizations” are not a guarantee of payment

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Fraud and risk in the electronic payment space

Fraud and Risk in the Electronic Payment Space

Michelle Marshall-Thompson

VP, Fraud/Risk Officer

FirstMerit Merchant Bankcard


General lack of understanding within the payment space
General lack of understanding within the payment space

  • “Authorizations” are not a guarantee of payment

  • Settlement of funds to a deposit account does not ensure funds will not be retracted

  • Inappropriate data verification


General lack of understanding of payment risks
General lack of understanding of payment risks

  • Chargeback Risks

  • Financial Risks:

    • Expense of payment acceptance

    • Loss exposure after payment acceptance

  • Sensitive Data Security Risks:

    • Human behaviors

    • Network risks


Opportunities for fraud
Opportunities for Fraud

  • Internal Fraud

  • External Fraud

  • Network Breach, Data Theft, Fraud


Internal fraud
Internal Fraud

  • Employee Embezzlement:

    • Fraudulent returns

    • Credentials theft

    • Misuse of position

    • Most unsuspecting person


Internal fraud1
Internal Fraud

  • Compensating Controls:

    • Oversight

    • Password protection

    • Policies regarding information sharing

    • Random Google or background searches


External fraud
External Fraud

  • Fraudulent use of card information

  • Lost/stolen card numbers

  • Alleged fraud

  • Merchant financial exposure


External fraud1
External Fraud

  • Compensating Controls:

    • Exposure of swiped, keyed & e-commerce transactions

    • Use of data verification: address, zip, CVV

    • Additional red flags

    • Work with banking partners


Network security risks
Network Security Risks

  • PCI non-compliance

  • Human behavior

  • Banking credential hacks

  • Wire fraud, sensitive data breach


Network risks
Network Risks

  • Compensating Controls:

    • Utilize the expertise of third parties

    • Work within well established guidelines

    • Oversight of employee responsibilities


Where to turn
Where To Turn

  • If you believe your organization/entity could be vulnerable to risks reviewed today, contact me directly at 330-849-8937, for further discussion

  • Contact your banking institution to inquire about additional controls and risk mitigating options

  • Don’t expect to “go it alone” - work with your partners



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