Categories: FinanceNews

Transaction Laundering Becomes The New Form of Online Fraud

New forms of fraud and misbehavior are becoming more prominent in the payments industry as of late. The rise of e-commerce is a positive development, but it also increases the risk of transaction laundering. To make matters worse, very few payment processors can pick up on this new threat, as it usually goes by unnoticed.

Transaction Laundering Is A Grave Threat To Payment Processors

To put this news into perspective, one has to fully understand how the payment industry works. In the e-commerce industry there are merchants processing payment card transactions on behalf of other merchants. On paper there is nothing wrong with this concept. However, this method increases the chance of funneling sales through transactions launderers.

Linking existing payment pages to other businesses is illegal, yet this type of fraud is not being picked up by the majority of payment processors. The vast majority of these funneled transactions are related to illicit content providers, ranging from pornographic material to gambling and even drug trading. This is a very worrisome development for the payments industry as a whole, to say the least.

To make matters worse, setting up merchant service providers to process illegal transactions has become significantly easier for criminals. Retailers all over the world have a far easier time setting up their e-commerce front, as they can get up and running within hours. Adding payment pages and accepting different payment methods is usually only a matter of installing the right plugins and creating a merchant account.



Related Post

Unfortunately, this also makes the job a lot easier for criminals. Merchant service providers are struggling to distinguish between legitimate and fraudulent transactions. The number of available payment platforms is overwhelming, and tracing the origins of money is nearly impossible. The vast majority of merchant service providers is unaware of the transaction laundering problem, which is not helping matters either.

Solving this problem will require a lot of work and research. Thankfully, we live in an era where new technologies are making these jobs a lot easier, although they will still require some effort. A new plan has to be developed by merchant service providers to combat fraudulent transactions, as their current security standards are insufficient.

Automated technologies and transaction processes are convenient, but also prone to abuse. Manual checks need to be enforced more actively, rather than being a sporadic occurrence. Sorting through all of the

big data generated by these payment transactions should be the number one priority of any merchant service provider in the world today.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

Share
Published by
JP Buntinx

Recent Posts

Aptos (APT) and Tron (TRX) Prices Slide, As Volume Soars For Rollblock Suggesting Parabolic Rally

As Aptos and Tron prices take a recent downturn, the spotlight shifts to Rollblock, whose…

2 hours ago

Altcoins to Watch in November: Binance Coin (BNB), Rollblock (RBLK), and Neiro (NEIRO)

As the crypto markets roll into their most bullish time of year, we present three…

2 hours ago

Analysts Forecast $1 for Cardano and Lunex Network As Dogwifhat Plunges To Former Lows

As the crypto market prepares for a major rally, experts believe that two top altcoins,…

2 hours ago

Retail Traders Panic Sell During ‘Fake Dip’; Whales Hold Tight to SOL, DTX, and SHIB for a Millionaire-Maker Bull Run

Solana (SOL): A Strong Ecosystem Despite Volatility Solana (SOL) has been all over the place…

3 hours ago

Llama 3.2 Predicts Price For Dogecoin: $2 Peak By 2025 And $5 Rally For DTX Exchange This Winter

Cryptocurrency trends are keen on the forecast that was recently released by Llama 3.2 model…

4 hours ago

Crypto Whale Sparks 8x Surge In $OPK Price with Massive Buy-in

A mysterious crypto whale, who previously invested 9,600 SOL into tokens $Pnut and $FRED, has…

6 hours ago