Digipay: Where High Risk and High Rewards Meet
Digipay Solutions Inc. is an independent payment provider specializing in high-risk, high-volume, card-not-present and business-to-business merchant services. The company works with leading retailers and financial institutions, bringing a heritage of executive management and vertical market expertise to its banking partners and extended family of agents, ISOS and merchants. The San Diego-based company, with regional offices in Salt Lake City, Los Angeles and New York, is a continually evolving payment service provider (PSP) and proprietary technology platform.
“Our growing family includes 31 banking partners and some exclusive channel arrangements,” said Digipay President Mike Ackerman. “We may be new but our PSP just turned 20 years, and we’re using our technology and industry knowledge to build a different kind of ISO, with people who share our passion for excellence.”
How would you describe Digipay’s culture?
Ackerman and business partner Sandy Travers decided to forego outside investment and build Digipay from the ground up, recruiting team members who shared their values of integrity, intelligence and divergent thinking. The Digipay family brings a diversified skill set to the rapidly changing payment processing landscape. In addition to curated knowledge of banking and payments, team member proficiencies include consulting with venture capital firms, guiding companies through startup, turnaround and critical growth phases, research, analysis and technical aptitude. The family of associates has helped Digipay grow organically.
How do you define a high-risk business?
Payment card brands and acquiring banks examine an industry’s business models, chargeback ratios, fraud profiles and default rates to assess risk. Industries with higher-than-normal refunds, chargebacks and fraudulent activities create liability, not only for merchants, but for credit card processors that fail to comply with Know Your Customer (KYC) guidelines and regulations.
Each individual processor or acquirer assesses risk differently. A business with poor credit may be turned down by one institution and welcomed by another one. The same is true for vertical markets. For example, industries that market products or services that are not legal in all 50 states, are problematic due to transactional risk in restricted territories and regions.
How do you acquire a high-risk account?
Agents who board high-risk merchants need partners who can help mitigate risk, by providing pre-application support and regulatory compliance and oversight. Digipay can tap our extended network of service providers to find the best processing fit and optimal revenue opportunity for each of our agents and their merchants. We help agents navigate the high-risk process and address their merchants’ needs as they grow their businesses.
Digipay is unique because we underwrite merchants in-house.. Our underwriters look at many factors when they review prospective merchants, such as business and industry type, years in business, credit history, delivery methods and projected transaction flows. They also visit websites, run background checks and consult other sources to verify a merchant’s compliance with FTC regulations and card brand rules. Many businesses get approved quickly and easily once all required items have been met.
Digipay underwriters work with more than 31 banking partners and direct each high-risk application accordingly. They peruse numerous account documents
to assure each business is compliant, financially sound, and a good credit risk. High-risk merchants require more due diligence during the new account onboarding process. Our underwriters’ bank relationships and proven prescreening methods help agents board high-risk and previously declined merchants.
How does Digipay mitigate chargebacks?
Chargebacks can be an emotionally charged issue for many merchants, but with the right systems in place, managing and defending against them can be a routine part of any merchant’s business. Maintaining a low chargeback ratio is key to maintaining a healthy merchant account. Merchants can reduce the risk of chargebacks by offering great products, excellent customer service, clear and concise refund/cancellation policies, and practicing prevention. Digipay powered by Tranzlytics offers merchants human fraud experts with real-time access to a fraud and chargeback management platform that is integrated with chargeback alerts and will intelligently score the risk associated with every transaction, customer, and affiliate marketer.
What is friendly fraud?
While industry best practices can reduce chargeback ratios and help prevent fraudulent transactions, there is no silver bullet against chargebacks, because not all chargebacks are caused by fraud, identity theft or processing errors. The leading cause of chargebacks, according to payments industry statistics, is “friendly fraud.”
So-called friendly fraud, also known as chargeback fraud, happens when consumers dispute charges made with their own credit cards, after receiving a product or service. Whether they are dissatisfied with level of service, claim they never received a product, or just want a refund without a return, most friendly fraud begins as legitimate commerce and goes bad after the sale. From a merchant’s point of view, there is nothing friendly about this type of fraud.
What is the Tranzlytics platform?
Tranzlytics uses business intelligence and human expertise to prevent good transactions from being declined. Our transaction analytics can identify good customers based on their transaction history and electronic footprint. For example, the Tranzlytics platform uses advanced technologies to analyze ecommerce transaction flows and assign risk scores to affiliates. Affiliates earn commissions by driving traffic to the ecommerce sites. Managing this traffic, by protecting cardholder data and weeding out fraudulent transactions, protects merchants from chargebacks and fraudsters who are becoming increasingly adept at exploiting vulnerabilities.
The Tranzlytics platform is engineered to adapt and change in response to the ever-changing threat landscape. Our team of fraud and chargeback experts protects merchant accounts while keeping their processing at the lowest rates. Our tailored “Pro Services” continuously monitor merchant MIDS to optimize interchange rates and react to changes and trends in real time.
What differentiates Digipay from other companies in the space?
We do things differently at Digipay. We are an agile, one-stop-shop where agents can speak to one person regarding several processors. The Digipay difference is reflected in our two-fold commitment. First, we commit to book every business, every time. Whatever legal business comes our way, high-risk or low-risk, we have a place to book that business. Second, we commit to keeping MIDS live. In the high-risk space, merchant lifecycles can be short. Our Tranzlytics platform and dedicated specialists combine human oversight and machine intelligence to expand MID longevity and merchant account portfolios.
“Maintaining a low chargeback ratio is key to maintaining a healthy merchant account.”