Category: Security

Virtual Card Reimbursements: Where Posting Breaks Down (And How STP Fixes It)

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Top Takeaways

  • Virtual card reimbursements promise faster, digital payments for physician groups but often involve cumbersome manual workflows that undermine efficiency.
  • Traditional posting processes for virtual card payments create multiple opportunities for errors, delays, and lost revenue—especially when mail, portals, and manual reconciliation are involved.
  • Straight Through Processing (STP) offers a streamlined solution, enabling physician groups to improve payment posting without overhauling existing systems.

If you lead finance or operations for a physician group, you’ve probably heard virtual card reimbursements pitched as a faster, more modern alternative to paper checks.

On the surface, virtual card payments are digital, automated, and convenient. Under the hood, they often behave very differently.

Across multi-site physician groups, Optum and other payer virtual cards still commonly move through mail, portals, terminals, and spreadsheets before they ever become clean, posted cash in your ledger. That “last mile” from approved to deposited + reconciled is where reimbursement performance quietly breaks down.

This post looks at:

  • Where posting fails for virtual card payments today
  • Why that failure is especially painful for physician groups
  • How CSG Forte’s Straight Through Processing (STP) fixes it—without forcing you to rip and replace core systems

 

Where posting breaks down

Those steps create several predictable failure points for virtual card payments in physician groups.

1. Card credentials instead of a postable transaction

A mailed virtual card letter or portal credential is not a transaction—it’s an instruction set your team has to turn into cash. Someone must:

  • Retrieve the credentials
  • Run the card
  • Find the associated remittance
  • Decide how to post it

Each hand-off adds latency and operational risk.

2. Funds and remittance travel separately

Deposits and detailed remittance data often do not arrive together. Teams may see bank credits long before a usable remit, or vice versa. The gap drives:

  • Unapplied cash
  • Misapplied payments
  • Manual research at month-end close

3. One card, many claims

A single virtual card can bundle multiple patients, claims, locations, or specialties. Without a reliable way to tie that card to structured remittance at the moment it lands, your staff are forced into manual, line-by-line allocation.

4. Fragmented workflows across clinics and specialties

Different clinics and specialties often evolve their own rules for handling virtual card payments—different portals, spreadsheets, reconciliation tricks and fee assumptions. The enterprise impact:

  • No single view of the true cost of virtual cards (fees + labor + backlog)
  • Higher audit and compliance risk from inconsistent controls

5. Expanded PCI and security exposure

Mail-and-portal workflows push card credentials and remittance information onto desks, into inboxes and across shared drives. Internal guidance notes that this widens your PCI DSS footprint and increases the surface area for fraud and error compared with a controlled electronic flow.

6. Human-driven exceptions

Because humans drive every step, exceptions are everywhere:

  • Amount mismatches and unexpected adjustments
  • Missing or incomplete remittance data
  • Incorrect routing by TIN, entity or location

Instead of a manageable exception queue, you get daily fire drills, “mystery deposits” and rework that lands on your most experienced team members.

 

What STP does for virtual card payments

STP is defined internally as a payment automation process that allows healthcare providers to receive payments from insurance companies—and from patients via payer portals—in about one day, directly into their bank accounts.

Crucially for posting, STP focuses on the last mile of virtual card payments, not claim adjudication.

In the Optum + CSG Forte model, STP keeps the payer’s virtual card construct, but automates what happens next:

  • The payer or Optum issues a virtual card for an adjudicated claim (or patient balance) exactly as they do today.
  • Instead of printing and mailing, card credentials + remittance data are sent electronically to CSG Forte over secure, encrypted channels.
  • CSG Forte processes the virtual card automatically—no manual keying.
  • Funds are deposited directly into the provider’s bank account, typically the next business day, based on configuration and funding cycles.
  • Payment and remittance data are delivered together in a format that supports auto-posting and streamlined reconciliation in your revenue and finance systems where integrated.

Result: one integrated flow from “payment available” to deposited, posted, and visible, without envelopes, portals, or duplicate data entry.

 

Questions to ask as you evaluate STP

You can frame internal and vendor conversations around a few practical questions:

  • Volume: Which payers and programs generate the highest share of your virtual card payments today?
  • Latency: How long, on average, does it take to move from “payment available” to deposited and posted cash for those streams?
  • Effort: How many touches does one virtual card reimbursement require—end to end?
  • Exceptions: What percentage of payments end up in unapplied cash, rework queues or write-off discussions?
  • Risk: How many people, and which roles, can currently access or handle virtual card credentials?
  • Readiness: Which specialties or locations are best suited for a 90-day pilot, based on volume and operational pain?

If the honest answers describe a process driven by envelopes, portals, terminals and spreadsheets, you’re squarely in the zone STP is designed to address.

 

Next step: move virtual card reimbursements from manual to straight-through

Virtual card payments are not going away—and for many physician groups, they represent a significant, growing share of otherwise reliable payer revenue. The question is whether that revenue continues to move through paper-era workflows, or through straight-through reimbursement that supports your cash, cost and control goals.

Straight Through Processing with Optum and CSG Forte offers a path to:

  • Replace mail and portals with automated, next-day deposits
  • Move from keying every payment to managing a defined set of exceptions
  • Tighten controls and audit trails across payers, specialties and locations
  • Free your teams to focus on strategy, relationships and growth—not manual posting

To see how STP could fit your physician group’s reimbursement strategy, visit the Optum + CSG Forte STP page and explore a pilot program that’s tailored to your payer mix.

 

Frequently Asked Questions

1. What are virtual card reimbursements in healthcare?

Virtual card reimbursements are payer-funded card transactions generated for approved claims or patient balances. Instead of sending a paper check, the payer (or an intermediary such as Optum) issues a single-use card credential that the provider processes like a card payment.

2. Why do virtual card payments create so many posting headaches for physician groups?

Because card credentials and remittance details rarely arrive as one clean, machine-readable package. Staff must retrieve card numbers from mail or portals, run them through terminals, then manually match deposits to 835s or PDFs across systems—creating delays, errors, unapplied cash, and “mystery deposits” at close.

3. What is Straight Through Processing (STP) for virtual card reimbursements?

STP is a payment automation model where payers still generate virtual cards, but card and remittance data move electronically to CSG Forte for automatic processing and deposit. Funds are routed directly to the provider’s bank account and paired with aligned remittance data that supports auto-posting and cleaner reconciliation.

4. Does STP replace ACH EFT for reimbursements?

No. STP is focused on automating virtual card reimbursements—including insurer payments and patient-via-payer portal payments. Many providers run ACH and STP side by side: they request EFT/ERA via ACH where it is available and use STP to handle the growing share of virtual card volume that is unlikely to disappear.

5. How can a physician group evaluate whether STP is worth piloting?

Start by quantifying virtual card volume, staff minutes per payment from “payment available” to posted, effective fee rates, exception rates, and unapplied cash tied to those streams. High-volume, high-friction payer or specialty cohorts—where lag and rework are heavy—are strong candidates for a 60–90-day STP pilot. It’s also a good move to check out this practical guide we put together specifically to help physician groups.

From Patchwork to Platform: An Integration‑First Approach to Healthcare Payments Modernization

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Key Takeaways

  • An integration-first, embedded payments platform lets health systems standardize payment experiences across portals, clinics, and ISV tools without replacing EHR/EMR systems.
  • Payment Facilitation-as-a-Service (PFaaS) models give organizations more control over payment economics, onboarding, and risk while offloading scheme-level compliance and infrastructure to a specialist partner.
  • Straight Through Processing (STP) can automate virtual card and portal-based reimbursements from “approved” to “deposited and reconciled” in about a day, improving cash visibility and reducing manual work.

For many healthcare leaders, payments integration has become a sprawling patchwork of bolt-ons.

Every acquisition adds another patient portal. Every service line has its own clinic workflows. Independent software vendors (ISVs) trying to keep up with modernization see no alternative but to bolt payment widgets onto electronic health records (EHR) extensions and revenue cycle tools.

They end up lost in a maze of gateways, vendor portals, and point solutions that all move money—but don’t share data, controls, or reporting. Bolting these features onto legacy bill-pay platforms only compounds the problem, leading to high denial rates, slow reimbursement, and limited digital options for patients and payers alike.

This blog lays out a solution for replacing that patchwork with one embedded payment layer that spans portals, clinics, and ISV tools—often delivered through a Payment Facilitation-as-a-Service (PFaaS) model and powered by CSG Forte’s Straight Through Processing (STP) in collaboration with Optum Financial for reimbursements.

The result? You get better cash visibility, security, and auditability, without a rip-and-replace of your clinical systems.

 

Why patchwork payment stacks are now a strategic risk

When payment infrastructure grows organically, it quietly raises both financial and operational risk:

  • Fragmented cash visibility: Each gateway, portal, and processor has its own reporting. Neither your internal accounts receivable team nor industry regulators can see a single cash position across organizational hospitals, clinics, and joint ventures. Reconciling card, ACH, virtual card and portal flows becomes a manual, multi-week exercise.
  • Slow, unpredictable reimbursement: Legacy virtual card processes and mailed remittances routinely stretch insurer money from “approved” to “deposited + reconciled” over 30–90 days, while staff hand-key card numbers and re-key payments into EHR systems.
  • Inconsistent controls and PCI scope: Different entities stand up their own payment vendors and workflows. Card data shows up on desktops and in local spreadsheets, expanding payment card industry (PCI) scope and increasing audit and fraud exposure.
  • Disjointed patient experience: Patients may start in a health system portal, get bounced to a third-party payment page, and then see different options at the clinic front desk or call center. That friction directly hurts collection rates and satisfaction.

You don’t fix this with one more bolt-on portal. You fix it with one embedded payment layer that integrates across your existing systems.

 

What an integration-first embedded payments platform looks like

An embedded payments platform brings payment acceptance, routing, settlement, and reporting inside the workflows your teams and patients already use—EHR portals, scheduling tools, telehealth apps, revenue cycle workstations, and more.

In a PFaaS model, your health system:

  • Owns more of the payment journey (branding, pricing, onboarding, basic configuration)
  • Delegates heavy-lift functions—sponsor bank relationships, PCI Level-1 infrastructure, KYC/KYB, fraud tooling and scheme compliance—to a specialist partner
  • Integrates via modern REST APIs and web components, so payments live inside your existing portals and ISV tools instead of redirecting out to generic checkouts

The key is integration-first design: you don’t rip out core EHR/RCM systems. You standardize how money moves around them.

 

One payment layer, many workflows

With the right PFaaS-based platform, “one payment layer” becomes the shared fabric for very different workflows:

1. Patient responsibility across every channel

  • Patients can pay from text-to-pay links, portals, mobile apps, IVR, in-clinic terminals, or call centers—all through the same tokenized card profile and gateway.
  • Staff don’t need different processes by department or campus; they use consistent tools and tender types wherever they work.
  • Finance sees one consolidated ledger for patient payments, with reporting by facility, service line, payer, and channel.

2. Insurer and payer-portal reimbursements via Straight Through Processing

Today, many of your virtual card reimbursements still flow through physical mail, payer portals and manual keying. STP automates that last mile:

  • Payers continue to issue virtual cards as they do today.
  • Card and remittance data are sent electronically to CSG Forte, processed automatically and deposited to your bank—typically about one day after approval, not 60–90 days later.
  • Payment and remittance data land together in your posting and finance tools, supporting auto-posting and cleaner reconciliation where integrated.

Because STP is part of the same embedded payment platform, your teams get a single view of both patient and payer cash. This integration allows for consistent controls and audit trails, without changing how payers adjudicate claims or ripping out practice management systems.

3. ISV and ecosystem tools

Your organization already relies on ISVs for specialty workflows—oncology, orthopedics, telehealth, patient engagement, and population health to name a few.

With a PFaaS-backed platform:

  • ISVs embed the same payment rails into their applications, using developer-friendly APIs and SDKs.
  • Sub-merchants (clinics, foundations, JV entities) can be onboarded and configured under your governance model, not each vendor’s ad-hoc rules.
  • You preserve a single set of risk policies, reporting and settlement rules even as your digital ecosystem grows.

This is healthcare payment integration at the platform level: different software, one payment layer.

 

Why PFaaS makes sense for large health systems

For multi-hospital systems, PFaaS hits a practical middle ground between “just another gateway” and becoming a fully registered Payment Facilitator yourself:

  • Faster time to value: You can launch embedded payment experiences quickly—without building a full acquiring, risk, and compliance stack.
  • Configurable control: Decide which functions you keep (e.g., pricing strategy, merchant support, data ownership) and which your PFaaS partner runs (e.g., underwriting, chargeback handling, scheme compliance).
  • Improved economics: Instead of small referral fees from disparate processors, you consolidate more transaction margin onto a single platform and can reinvest savings into patient experience or margin protection.
  • Risk and compliance by design: A healthcare-ready PFaaS partner brings HIPAA-aware, PCI-Level 1 infrastructure, tokenization, encryption and monitoring that reduce your PCI scope and strengthen audit posture.

 

Proof in practice: an embedded payments partner scaling healthcare payments

A useful way to pressure-test your “single layer” strategy is to look at environments that must scale across many payment flows and merchants.

In CSG Forte’s long-running partnership with National Cash Management Systems (NCMS), NCMS shared metrics from a merchant client accepting online healthcare payments—including average monthly transaction growth from 40,820 (2021) to 91,831 (2021–2025) and monthly transaction totals rising from $3.93M to $12M.

The broader theme: consolidation onto a stable, single-source platform helped simplify operations and support sustained growth.

For health systems, the takeaway isn’t “copy an ISV model.” It’s that standardizing the payment layer is what makes it possible to scale workflows cleanly—without multiplying gateways, processors, and reporting silos.

90-Day Healthcare Roadmap

 

Where to go from here

If you’re done funding a patchwork of gateways, bolt-on portals, and payer workarounds, the next step is an integration-first embedded payment platform delivered through CSG Forte’s Payment Facilitation-as-a-Service and Straight Through Processing.

Explore how PFaaS can give your health system one payment layer across portals, clinics, and ISV tools—with better cash visibility, stronger security, and cleaner audits—by visiting our PFaaS webpage and connecting with our team.

 

FAQs

What is healthcare payment integration, and why does it matter for large health systems?

Healthcare payment integration is the practice of connecting payment acceptance, settlement, and reconciliation directly into clinical, billing, and patient-facing systems so transactions flow straight through without manual re-keying or swivel-chair work. For large health systems, this reduces administrative overhead, improves cash visibility, and supports a more consistent patient experience across sites and portals.

How does Payment Facilitation-as-a-Service (PFaaS) support embedded payments in healthcare?

PFaaS allows a health system or its ISV partner to act like a payment facilitator in the provider’s eyes—owning more of the payment experience and economics—while a specialist provider handles core acquiring infrastructure, PCI-compliant processing, and much of the compliance stack. This is well-suited to embedded payments in healthcare, where workflows span EHRs, portals, and third-party tools.

Can we embed payments without replacing our EHR or practice management systems?

Yes. Modern embedded payments and STP offerings are designed to run behind the scenes, centralizing card processing, deposits, and remittance data while integrating with existing EHR, PM, and RCM tools over time. That means you can standardize your payment layer without a big-bang system replacement.

How does STP help with virtual card and payer-portal reimbursements?

STP automates the last mile of virtual card payments by routing card and remittance data electronically to a payments partner that processes the card, deposits funds, and delivers aligned remittance data for posting and reconciliation—often in about one day instead of 30–90 days. This reduces manual mail, keying, and “mystery deposit” research.

What should healthcare leaders look for in an embedded payments partner?

Leaders should prioritize: healthcare-grade security and compliance (HIPAA, PCI DSS, HITRUST-aligned), proven integrations with EHR/EMR and revenue tools, support for PFaaS and STP models, and clear reporting that link payment activity to remittance and GL outcomes.

Account Takeover Fraud: Building a FORTE Defense

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Key Takeaways

  • Account takeover (ATO) fraud is a business problem, not just a security issue: It drives direct losses, chargebacks and higher support volume while eroding trust in your portals and digital channels.
  • The FORTE framework gives you a simple way to organize defenses: Firewall and front-door controls, OTP, risk-based monitoring, tokenization and encryption give risk and ops leaders a shared language to discuss gaps and priorities.
  • You do not have to implement everything at once to make progress: Start by reviewing login flows, high-risk actions and how your payments partners handle tokenization and encryption, then build a phased roadmap to strengthen ATO defenses over time.

Account takeover (ATO) fraud is one of the most costly—and least visible—ways organizations lose customers and revenue. Instead of headline-grabbing breaches, ATO fraud often shows up as disputed payments, frustrated account holders and support teams left without answers. Why? Because on paper, the logins looked legitimate.

Attackers have learned that if they can get into a user’s account, they can move money, change contact details, enroll new cards and set up recurring payments—often without touching your core systems. That makes ATO fraud a high-impact threat for any organization that offers bill pay portals, customer portals or embedded payments inside software platforms.

Without E2EE, passwords stored in a database could be exposed to a breach, which puts users at risk of identity theft and financial fraud.

The FORTE framework introduced in this blog covers firewall protections, one-time passwords, risk-based monitoring, tokenization and encryption. This easy-to-follow framework gives risk, security and operations leaders a practical way to organize defenses. Read on to learn more.

 

The FORTE framework: 5 layers of ATO fraud defense

For risk, security and operations leaders, ATO fraud is a cross-functional problem. That is why it’s useful to have a simple way to explain defenses and tradeoffs to stakeholders who do not live in security tools all day. The FORTE framework is one way to do that.

F – Firewall and front-door controls: keeping bad traffic out

Your first line of defense is keeping obvious bad traffic away from your login pages and account features. You don’t need to be an infrastructure expert to understand the basics:

  • Web application firewalls (WAFs) block common attack patterns and suspicious requests before they reach your application.
  • Rate limits and velocity checks slow or stop bots that hammer your portal with credential stuffing attempts.
  • IP reputation and geolocation filters flag traffic from known bad networks or regions where you have no legitimate users.

Together, these front-door controls reduce automated attacks that ever reach your authentication logic. They won’t stop a targeted phish against a specific user, but they make bulk ATO campaigns much harder and more expensive to run. A practical first step is to ask your teams and providers:

  • Which WAF and front-door protections do we have in place today?
  • How do we tune rate limits to avoid locking out real users while frustrating bots?
  • How do we monitor for sudden spikes in login failures or suspicious requests?

O – OTP and stronger authentication: making stolen credentials less useful

If a password is the only barrier between an attacker and a customer account, you’re relying on the weakest link. Stronger authentication doesn’t have to add endless friction—it simply makes credentials alone insufficient for high-risk actions. Core options include:

  • One-time passwords (OTPs) by SMS or email for logins from new devices or locations
  • App-based or push authentication in a trusted mobile app
  • Step-up checks for sensitive actions like changing payment methods, updating contact info or enrolling in autopay

Used well, these controls make ATO far harder because stolen credentials are less useful without access to a device or inbox. Good questions to ask include:

  • Where do we use OTP or stronger factors today?
  • Do we challenge only at login, or also for high-risk actions?
  • How often do users abandon sessions due to friction?

The goal is to balance friction with risk.

R – Risk-based monitoring: spotting suspicious behavior before it becomes loss

Even with strong front-door controls and OTP, some takeover attempts will slip through. Risk-based monitoring helps catch them by assigning risk scores based on behavior and context. Key signals include:

  • New devices or browsers
  • Logins from unusual locations or networks
  • Sudden shifts like many failed logins, rapid password changes, or adding multiple new payment methods

With these signals, you can:

  • Prompt for extra verification when risk is high
  • Flag sessions for manual review
  • Temporarily limit high-value payments or changes to stored data

Behavioral analytics, device intelligence and simple rules can all support this layer. The goal is to move from a one-time yes/no login decision to an ongoing evaluation of whether a session still looks legitimate.

T – Tokenization: limiting the damage if accounts or data are compromised

No defense is perfect. If an attacker does manage to take over an account, the question becomes how much damage they can actually do. Tokenization helps answer that question in your favor.

Instead of storing raw card numbers or other sensitive payment details in your systems, tokenization replaces that data with tokens that are useless outside a specific context. A token replaces the underlying card information when you initiate payments, yet the actual card number lives in a secure vault managed by a trusted provider.

For account takeover scenarios, tokenization offers several advantages:

  • Even if an attacker gains access to an account, they cannot see or exfiltrate raw card data.
  • Backend systems that only work with tokens hold less sensitive information, reducing the blast radius if something goes wrong.
  • You can revoke or rotate tokens without forcing users to reenter full card details in many cases.

In a world where ATO is a persistent threat, limiting what an attacker can steal if they get in is just as important as keeping them out in the first place.

E – Encryption: protecting data in motion and at rest

For ATO, encryption matters in several ways:

  • Transport-level encryption (such as TLS) ensures that credentials and session cookies are not exposed to eavesdroppers as users log in or perform actions
  • Database and disk encryption make it harder for attackers to read sensitive data if they gain access to infrastructure or backups
  • Key management practices determine how easy it would be for a criminal to misuse encrypted data if they obtain partial access

When combined with tokenization, strong authentication and risk-based monitoring, encryption helps ensure that even successful account takeovers do not automatically turn into catastrophic data breaches.

 

Practical steps to strengthen your ATO defenses

No organization flips a switch and implements every element of the FORTE framework overnight. The point is not perfection. It is clarity.

The important thing is to move deliberately. ATO fraud is not going away, but you are not starting from zero.
If you rely on a payments platform or embedded payments provider, bring them into the conversation early. Ask how they support FORTE-style defenses and where they can take work off your plate so your teams can focus on the parts of account takeover fraud defense only you can own.

Taking these steps not only protects your customers and sensitive data, but also empowers your organization to outsmart fraudsters at every turn—because building your fraud-fighting FORTE is the strongest move you can make in today’s threat landscape.

Get Protected with CSG Forte

Ready to put FORTE to work and fortify your defenses against account takeover fraud? Check out what CSG PaymentsProtection.ai can do for you, then reach out to talk to the experts at CSG Forte to learn how to implement firewall protections, OTP authentication, risk-based monitoring, tokenization and encryption.

 

FAQS

Q1: What is account takeover fraud?

Account takeover fraud happens when a criminal gains control of a legitimate user’s account and uses it to make changes or perform transactions without permission. Instead of breaking your systems, they log in with stolen or guessed credentials, then update contact details, swap stored payment methods or move money. Because the activity often looks like a normal login, ATO can be hard to spot until customers complain or losses pile up.

Q2: How do you prevent account takeover fraud?

Preventing account takeover fraud starts with hardening the front door, then layering in smarter checks as activity unfolds. That means putting controls like web application firewalls, rate limits and IP reputation in front of your portals, then adding stronger authentication such as OTP or step-up challenges around high-risk actions. From there, risk-based monitoring, tokenization and strong encryption help reduce both the likelihood and the impact of ATO when it does occur.

Q3: How do you stop account takeover fraud in real time?

Stopping ATO in real time depends on your ability to spot risky sessions quickly, not just bad passwords. Risk-based monitoring that looks at device, behavior, location and velocity can flag suspicious logins or actions as they happen, then trigger extra verification, temporary limits or blocks. When your payments platform and security tools work together, you can challenge or shut down high-risk activity before it turns into confirmed loss.

Q4: How can enterprises prove account takeover fraud prevention reduces losses?

Enterprises can show the impact of ATO defenses by tying security metrics to business outcomes. That includes tracking ATO attempts versus successful takeovers, measuring changes in fraud write-offs and chargebacks over time and comparing loss rates before and after key controls like OTP, behavioral analytics or tokenization go live. When you line those numbers up with support volume and customer complaints, it becomes much easier to show how account takeover fraud prevention contributes directly to lower losses and a healthier digital business.

Payment Fraud 101

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Payment fraud has become more prominent and more damaging as online transactions have grown in popularity. Cybercriminals are using advanced and evolving tactics to access payment information and avoid detection. It’s more important than ever for businesses to recognize the realities of payment fraud and implement prevention strategies.

 

Understanding Payment Fraud

Payment fraud is the illegal process of making a purchase using forged or fabricated payment information. Most payment fraud involves some sort of identity theft. Identity thieves might steal a target’s personal information as a direct or indirect way to access their funds. Vulnerable information can include the consumer’s name, Social Security number, credit card information, bank account information and account passwords.

 

Payment Fraud Across Industries

Payment fraud impacts businesses across multiple sectors. A 2022 report shows that many industries saw numerous instances of payment fraud costing hundreds of thousands of dollars over the year:

 

Industry Number of cases Median loss
Banking and financial services 351 $100,000 
Government and public administration 198  $150,000
Healthcare 130 $100,000
Energy 97  $100,000
Insurance 88  $130,000
Transportation and warehousing 82 $250,000
Construction 78 $203,000
Telecommunications, publishing, media and other information 60 $58,000
Real estate 41 $435,000
Arts, entertainment and recreation 41 $73,000

 

Types of Payment Fraud

Perpetrators use numerous tactics to commit payment fraud. A few common payment fraud types include:

  1. Credit card fraud
  2. Phishing attacks
  3. Friendly fraud
  4. Skimming
  5. Triangulation fraud
  6. Card testing

 

1. Credit Card Fraud

Credit card fraud is a type of theft that occurs when a person steals another’s credit card information and uses it to make fraudulent purchases. Credit cards are common targets for scammers because they have become so prominent in commerce. Credit cards are also vulnerable because few authentication factors are in place—if a person possesses the credit card or the information on it, they can use the card to purchase anything within the holder’s limit.

Consequently, credit card fraud has risen steadily over the past decade. Reports find that credit card fraud occurrences increased by 10% between 2020 and 2021, amounting to over $30 billion lost worldwide and over $12 billion lost in the United States.

Fortunately, credit card companies can combat fraud by flagging suspicious activity, such as abnormally large charges or purchases made in an atypical geographical location.

 

2. Phishing Attacks

Phishing occurs when a thief poses as a reputable company to deceive the victim into sending account or payment information. Phishing attackers use fake emails, text messages, phone calls and websites that look close enough to those of a recognizable business to trick their victims.

During a phishing attack, the victim will receive a website link that often appears safe at first glance. However, the link directs the user to a fake version of the site and asks for login credentials. Submitting the login form will hand account information to the scammer, leading to an account takeover. A phishing link may also contain malware that infects the user’s device to access more information.

Phishing scammers target consumers to access their personal information, especially login and payment information on financial accounts. These scams also frequently target employees through business channels to access company data.

Phishing is one of the most common and dangerous types of fraud in digital payment. One study found that over 80% of employees fell for a malicious email scam and provided sensitive information. Another shows that phishing is among the most common types of cybercrime, doubling in frequency between 2019 and 2020.

 

3. Friendly Fraud

Friendly fraud, also known as chargeback fraud, occurs when a customer falsely disputes a legitimate transaction. The fraud claim causes the merchant to refund the customer after providing the product or service.

Friendly fraud can also occur when a dispute is legitimate, but the merchant isn’t at fault. If a thief steals a customer’s card information, the customer will rightfully flag the fraudulent purchase. Their credit card provider will likely pass the burden onto the merchant unless they find the person who’s truly behind the fraud.

Friendly fraud is a delicate subject for businesses striving for customer satisfaction. Helping legitimate customers avoid fraud is essential, but businesses must implement measures to verify online purchases. One study found that 23% of consumers admitted to falsely disputing charges. Fraud prevention efforts can mitigate the harm that friendly fraud and chargebacks cause.

 

4. Skimming

Skimming is a tactic that involves stealing a cardholder’s information from their physical credit card. Here, a criminal uses an inconspicuous device to read a customer’s credit card information as they complete an in-person transaction. Some skimming devices have cameras that sneak a peek at the card number, while others are installed inside the scanner and read the card’s magnetic strip.

Criminals used skimming to compromise upwards of 120,000 cards in the first half of 2023. This type of fraud is most likely to occur at a gas station or automated teller machine (ATM).

 

5. Triangulation Fraud

Triangulation fraud is a scam involving two separate consumers and a merchant. These attacks are complex and difficult to track and quantify.

This type of fraud begins with a cybercriminal posing as a merchant by using a similar web or email address. The first consumer doesn’t notice the discrepancy and completes a purchase. As a result, the cybercriminal steals the consumer’s financial information.

After stealing the first consumer’s information, the cybercriminal visits the legitimate merchant’s website and places the intended purchase in the consumer’s name—but they use a second consumer’s stolen payment information for the transaction.

The merchant accepts and fulfills the order, only later recognizing that the shipping information and billing information do not match. The initial consumer receives illegally purchased items, often without realizing it. Meanwhile, the cybercriminal has their payment information to use in a future scam, and the second consumer loses money to the fraudulent transaction.

The second consumer can report the event and receive a refund when they notice the attack. The merchant will need to forfeit their payment despite delivering the product or service. The cycle continues with another victim, another merchant and the initial victim’s payment information.

 

6. Card Testing

Card testing is a tactic that cybercriminals use to verify stolen credit card information before they sell it off. The crime is harmful to customers and merchants alike.

During a card scam, the perpetrator submits numerous small transactions to an e-commerce site. The card number may be the same each time, but other information, like the CVC or expiration date, will change as the scammer attempts to find the right combination.

When the scammer sees that the transactions are processing, they launch a full-scale attack. The e-commerce system may receive thousands of small transactions at once, all using stolen payment information. The scammer automates their guessing processes using a bot or another technological tool.

As payment requests roll in, the fraud victims will recognize fraudulent transactions on their accounts. They’ll submit chargeback requests to retrieve their money. The business will experience a sudden influx of transaction fees and chargeback fees that can amount to thousands of dollars. The scam may also lead to a freeze of the business’s merchant account.

 

The Impact of Payment Fraud on Businesses

Payment fraud can have a widespread impact on a business, affecting everything from its revenue to its reputation:

  • Financial losses: Payment fraud can bring significant financial consequences for merchants. In 2022, online payment fraud caused $41 billion in e-commerce losses worldwide.
  • Customer trust and loyalty implications: Consumers trust merchants to facilitate secure transactions, and breaches of this trust could cause them to take their business elsewhere. One survey found that 87% of consumers will choose a competitor after a data breach.
  • Legal consequences: Payment fraud leaves businesses liable. Merchants often must repay the cardholder’s financial institution after a breach. Additionally, the Federal Trade Commission (FTC) details legal guidelines for protecting customers’ personal and payment information.
  • Reputational damage: The reputational damage that payment fraud causes extends beyond lost revenue. As consumers turn to different businesses, prospective employees, investors and partners may do the same.

 

Common Warning Signs of Payment Fraud

While payment fraud is common and detrimental, your business can mitigate its harm. Monitor transactions for these warning signs that indicate payment fraud:

  • Unusual transactions or spending patterns
  • Multiple failed payment attempts
  • Inconsistencies in consumer information
  • Sudden changes in consumer behavior
  • High-risk transactions or unusual activity spikes

 

Payment Fraud Protection Strategies

Explore some of the top fraudulent payment prevention strategies and practices your business can adopt today.

 

Secure Payment Processing Systems

You can implement an advanced payment platform to protect customers and your business while meeting Payment Card Industry Data Security Standards (PCI DSS) requirements. A cloud-based payment platform can provide a seamless customer experience while bolstering your business’s fraud prevention strategy.

 

Identity Verification

Methods like two-factor authentication and Know Your Customer (KYC) procedures can help verify purchasers’ identities to prevent fraud. Two-factor authentication requires customers to confirm their identity after submitting their password by responding to a text message, phone call or email. KYC procedures are internal measures your business can take to identify customers and qualify leads.

 

Tokenization

Tokenization is a data security method that replaces raw payment information with a digital placeholder.

When a customer completes a purchase, their payment information enters your payment portal. There, tokenization software can create a nonsensitive version of the payment data. The nonsensitive version of the data, or the token, travels onward for payment processing. The original sensitive information remains in the payment portal.

Payment processing systems have the credentials or tools necessary to decipher the token and view the sensitive information in the payment portal.

 

Real-Time Fraud Detection

The most secure payment processing systems include real-time fraud detection. Fraud detection systems use behavioral analysis to separate legitimate customer behavior from fraudulent activity. Behavioral analysis can prevent fraudulent purchases and help your business resolve claims faster.

 

Education and Training

Employees are often the target of phishing and other scams. Train your personnel to use secure practices and recognize attempts at data theft. Cybersecurity training should be a part of onboarding and ongoing learning to ensure employees build strong fraud detection skills and keep them current as tactics evolve.

 

Regular System Audits and Updates

Cyberattackers constantly adapt, so it’s important to update your infrastructure and protection on a regular basis. Analyze your fraud prevention system as a part of annual or semiannual risk assessments.

 

Protect Your Business Against Payment Fraud

Payment fraud is prominent and takes many forms. Understanding the possibilities and implementing prevention strategies can save your business countless hours and thousands of dollars.

At CSG Forte, we develop cloud-based payment systems with payment fraud security integration. Our systems and resources will give you peace of mind as you accept payments online, in person and over the phone. We encourage you to request access to our payment security whitepaper to learn more about effective payment security strategies.

We’re also available to discuss your situation, so contact us to learn more about our secure, scalable payment solutions.

Why Secure, Modern Payment Portals Are the New Standard for Businesses

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Digital payments provide convenience and processing efficiencies, but they also introduce several risks for both payers and businesses, including cyberattacks. Cybercriminals target all types of organizations large and small, including healthcare providers, financial institutions, government agencies, retail businesses and most other types of transaction-based businesses. They’re looking for security weaknesses in outdated payment systems that make it easy to access sensitive information. Ransomware attacks, phishing schemes and data breaches jeopardize personal information—and trust.

Consumers are increasingly and justifiably worried about data security. A 2024 survey found that 78% of U.S. consumers expressed concerns about data security when using online services, up from 73% the previous year. Almost half (44%) of respondents had experienced data loss, identity theft or online fraud, with 29% of the victims experiencing significant harm. Only 26% of respondents believe digital payment methods are secure from theft.

Identity theft or a data breach shatters trust. Across industries, security is the most valued factor when making any kind of payment, as identified by 94% of respondents to an American Express survey. Most (84%) consumers expect strong security—to protect their data and credit—from any organization requesting payment. When their financial information isn’t protected, customers may hesitate to use online payment portals again. Or they may take their business elsewhere.

A single security lapse can have devastating consequences for a business’ reputation and finances. More than half (58%) of U.S. consumers believe that brands that get hit with a data breach are not trustworthy, and 70% said they would stop shopping with a brand that suffered a security incident.

Businesses and government agencies must prioritize payment security and risk management to safeguard customer data and revenue and maintain trust. That means investing in digital payment solutions that meet the highest standards for cybersecurity, compliance, and fraud prevention.

 

Common Payment Risks in Digital Transactions

As digital transactions gain popularity, businesses and consumers alike must understand the various risks.

Payment fraud is the main risk in digital transactions, and comes in many forms, such as:

  • Identity theft: Bad actors steal personal information to make unauthorized purchases.
  • Account takeovers: Bad actors gain access to accounts and initiate transactions without the account holder’s knowledge.
  • Phishing scams: Bad actors trick victims into revealing sensitive information such as passwords or card details.
  • Social engineering: Bad actors manipulate individuals through social engineering tactics to gain access to sensitive information or trick them into authorizing fraudulent transactions.
  • Data breaches: Hackers infiltrate systems and steal sensitive customer data, including payment information, to make fraudulent transactions.
  • Card-not-present (CNP) fraud: Common in online purchases, this refers to fraudulent transactions that occur without the presence of the physical card.

Chargebacks are another key risk in digital transactions. Customers can request a chargeback—a reversal of funds following a debit or credit card purchase, initiated when the customer files a dispute over the charge with their bank or credit card provider. A large proportion of chargebacks reverse legitimate fraud (i.e., transactions that show up on a customer’s account due to fraudulent activity). However, some chargebacks occur due to “friendly fraud”—when the customer doesn’t recognize the charge, has delivery problems or wants to avoid the return process. Whether they’re due to legitimate or friendly fraud, chargebacks are costly for businesses. Payment processing providers charge fees—up to $50 or $100 for each chargeback.

Maintaining regulatory compliance is one of the most complex ways businesses navigate online payment risk. Regulations such as Payment Card Industry Data Security Standard (PCI DSS) for data security and strong customer authentication must be adhered to, and they change regularly. Organizations have to get it right, or risk steep fines and penalties.

 

Key Components of a Successful Payment Risk Management Strategy

To effectively manage payment risk, choose a payment system that includes:

Verification services

To reduce payment failures, fraudulent transactions and chargebacks, proactively verify:

  • Routing and bank account numbers
  • Account ownership
  • Customer account data is current (e.g., card not expired)
  • Accounts are active and have sufficient funds

 

Modern Security Measures

When it comes to payments, security is about more than just locking down individual transactions—it requires a comprehensive strategy that addresses every point where sensitive data is stored, transmitted, or accessed. A strong payments platform weaves together multiple safeguards to reduce risk, strengthen compliance, and maintain customer trust. The following measures form the foundation of a modern, secure system.

  • Encryption & Tokenization: Protecting sensitive payment data requires a layered approach. Tokenization and encryption safeguard information both at rest and in transit. PCI-validated end-to-end encryption disguises card data during transmission, making it appear valueless if intercepted. Meanwhile, tokenization randomly generates a unique token with no intrinsic value for every set of sensitive information. This allows credit card or ACH data—such as the primary account number (PAN) for credit cards or the bank account or bank routing number for ACH transactions—to be safely stored, processed, and transmitted across systems without exposing the actual details.
  • Access Control: Payment systems must employ strong authentication protocols so that only authorized personnel can interact with sensitive data and systems. Multi-factor authentication (MFA) adds a critical layer of defense by requiring multiple identifiers to access a system or approve a transaction, making unauthorized access far more difficult.
  • Built-In PCI Compliance: Another essential safeguard is built-in PCI compliance. A payment system must meet the highest compliance and regulatory standards, including PCI Data Security Standard (PCI-DSS) requirements for handling credit card payments, as well as local and federal regulations. A trusted payments partner helps businesses navigate this complex landscape by providing secure solutions and supporting compliance in real time—minimizing risk and reducing the likelihood of breaches that can erode customer trust.
  • Hosted Payment Pages: Hosted payment pages also offer strong protection. Instead of entering bank account or card details directly on an organization’s website, customers are redirected to a secure checkout page managed by a third-party gateway or service provider. On that page, sensitive data—such as account and routing numbers, PANs, CVVs, and expiration dates—is collected and transmitted by the provider’s secure servers. Because the organization’s systems never touch or store this data, PCI scope is significantly reduced.
  • Reducing Access to Sensitive Data: Some platforms go even further by offering solutions that limit direct access to sensitive data. For example, having customers pay through secure, unique microsites rather than sharing payment information over the phone reduces both the number of people who handle sensitive details and the risk of fraudsters posing as customer service representatives.

 

Advanced Fraud Detection

Even with strong security controls and compliance in place, fraud is an ever-present threat. Fraudsters constantly adapt their methods, meaning businesses can’t rely solely on static defenses. Instead, payment systems must incorporate tools that can learn, evolve, and recognize the signs of suspicious activity before losses occur. Modern fraud detection is about continuous adaptation and proactive monitoring.

Today’s platforms use advanced tools like machine learning (ML), artificial intelligence (AI), and behavioral analytics to spot subtle, complex patterns of fraudulent activity that would slip past basic rule-based systems.

These tools analyze transaction data and user behavior, monitoring elements such as transaction timing, frequency, device fingerprints, and even typing speed. Anomalies are flagged for further investigation, giving businesses the ability to react before fraudulent activity escalates. The key is adaptability—fraud detection systems must continuously learn and evolve in order to keep pace with increasingly sophisticated threats.

When You Don’t Want to DIY: Secure, Compliant Payment Processing Builds Trust

Even with a strong payment system, risk management is a heavy lift. Cyber threats, fraud schemes, and regulatory requirements are rapidly evolving. The good news? You don’t have to shoulder fraud detection and prevention on your own.

Knowing that their payment data is handled securely gives customers peace of mind and builds trust. By using secure, compliant payment solutions and prioritizing risk management, your organization demonstrates a commitment to safeguarding customers’ personal data and financial transactions. This proactive approach to cybersecurity and compliance not only helps prevent fraud but also reassures residents that your business is trustworthy, responsible and transparent. When customers know your business is taking the right steps to secure their personal information, they are more likely to pay online—and on time—and continue doing business with you.

Ready to strengthen your payment security? Discover how CSG Forte’s secure, compliant payment solutions can help you protect customer data, reduce risk, and earn lasting trust. Contact us today to learn more.

What Are NSF Payments? NSF Re-Presentment Basics

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Handling returned non-sufficient funds (NSF) automated clearing house (ACH) payments accurately and efficiently helps businesses protect themselves from financial losses by minimizing the impact of unpaid transactions. Promptly addressing NSF returns through clear communication, compliant follow-up procedures and a timely resolution enables merchants to recover funds and prevent further losses. Streamlined handling can also help businesses maintain strong customer relationships, reducing the likelihood of service disruptions due to unsuccessful payments.

At CSG Forte, our recovery solutions can help equip your business to handle NSF returns effectively. Our re-presentment options enable you to recover the funds for each NSF payment at no charge to you. More importantly, these automated solutions save significant time and resources, allowing you to focus more on the responsibilities that matter most for your business.

What Is an NSF Return?

An NSF return in banking stands for non-sufficient funds, otherwise known as an ACH network payment that was returned due to its inability to be completed. This means the bank has refused to honor the payment because there isn’t enough money in the account to cover it. Having a check returned due to NSF is often referred to as having a “bad” or “bounced” check.

When the merchant processes the payment and the receiving bank returns it due to non-sufficient funds in the account, this situation can result in fees for both the payer and the recipient trying to collect the funds. These fees are known as NSF fees or returned item fees, which are charged to the account that lacks the funds to cover the payment.

How NSF Fees Work

NSF fees can occur as a result of a customer writing a check or making an ACH payment believing they have ample funds available for a transaction. For instance, let’s say a customer has $2,200 in their checking account and makes a purchase of $2,000 for your product or service. However, it turns out that customer had recently withdrawn $300 from an ATM and forgot to account for it.

Because of this oversight, let’s say the customer makes an online ACH payment for $2,000 when their bank balance is only $1,900. Their payment is $100 more than what they currently have available. It’s possible this payment could be returned due to NSF and incur a fee to the customer’s bank account.

FAQs About an NSF Return

A returned NSF payment can be complex to navigate and remedy. Here are some commonly asked questions about what to do when you receive an NSF return and how to avoid them in the future.

1. Are NSF Fees the Same as Overdraft Fees?

Anyone who has tried spending more money than what’s available in their bank account has likely been issued an overdraft charge or an NSF fee. Although many believe the two terms are interchangeable, there are some critical differences between them:

  • Overdraft fee: Banks typically charge overdraft fees when they allow a transaction to process that would have otherwise overdrawn an account. Customers can view an overdraft as a temporary loan from the bank, and they can expect to pay back the amount the bank covered plus an overdraft fee. For example, if you have $200 in your checking account and initiate an electronic check payment for a purchase of $230, the bank may accept the check. However, your account balance will be in the red by $30, incurring an overdraft fee. Overdraft fees have typically been around $35 per transaction for most large banks.
  • NSF fee: Banks commonly charge an NSF fee when an account lacks the funds required to cover a transaction and the bank doesn’t permit the transaction to process, resulting in a bounced check or denied electronic bill payment.

2. What Happens When an NSF Payment Is Returned?

When an NSF return occurs, a number of consequences may follow. The payor’s bank makes one of two choices:

Allow the Payment

The bank may decide to let the ACH payment or check post. This, however, would put the account holder into an overdrawn status. For some banks, this means the bank will charge a fee for overdrawing the account. The bank may continue to charge for each day or it can charge a specific flat fee to cover the amount that the account is overdrawn. These charges can end up burning quite a hole in the wallet.

Refuse the Payment

The bank may refuse to honor the payment. The bank will not allow the funds to be processed, and the account holder will likely be charged a fee just for issuing the payment without having funds available.

If a check is returned due to NSF, it could potentially sink the depositor’s account into overdrawn status, also initiating an overdraft fee.

3. What Do I Do When I Get a Check Returned Due to NSF?

Consumers who get charged an NSF fee will have to pay the fee as outlined in their bank’s policy. The merchant will likely try to contact the customer about the returned payment. This is an important step because an NSF payment isn’t always intentional.

The merchant can send a new bill for the original item the customer purchased, the NSF returned check fees and any fees received for trying to deposit an NSF payment. If possible, the merchant can try to deposit the payment again manually. However, this step should be taken with caution as there’s always a chance the check could bounce again and incur another fee. This is also can be a manual process for a merchant to manage.

Businesses that still do not receive payment may send a demand letter, hand the payment over to a collection agency or initiate legal actions in a small claims court.

Working with a trusted payments partner like CSG Forte can help merchants navigate arduous NSF payments and automate the process to make recovery simple.

5. How do You Protect Your Business From NSF Payments?

NSF payments can be very frustrating and costly to businesses that need to process the transactions. Some businesses decide not to accept ACH payments or checks at all as a last resort. For example, debit card payments are authorized in real time, enabling you to confirm that the customer has enough funds for the purchase. However, this choice limits payment options for your customers.

For many businesses, accepting paper and eChecks is a wise decision. This practice gives customers the flexibility of selecting a payment option that works for them—and many people want to simply have a payment come right out of their bank account.

But how can businesses handle NSF payments? It’s wise to have a plan in place so that when NSF payments appear, they aren’t a complete disaster. NSF re-presentment is your best option, as it allows you to recover the funds for each unsuccessful ACH transaction.

Some other tips for protecting your business against NSF checks include:

  • Create a check acceptance policy and ensure employees follow it.
  • Train staff on red flags to look for, such as missing the preprinted name and address or having a fake routing number.
  • Require ID verification when accepting a check in person.
  • Use a verification service like CSG Forte Validate+ before accepting payment.

6. Can I Redeposit an NSF Check?

Yes. It’s possible to recover the funds by attempting to re-deposit the payment once it is returned, also known as NSF re-presentment.

7. What Is NSF Re-Presentment?

When an NSF payment occurs, re-presentment will strategically re-present the payment at a later date. This way, the payment has another chance to clear. CSG Forte’s NSF re-presentment option lets you select the date you wish to re-present payments that are returned, enabling you to choose a time when you think there is a stronger likelihood that the funds are available with your customer base.

You may know, for instance, when your customer gets their paycheck. Scheduling NSF re-presentment on or directly after this date increases your chances of accessing the funds and clearing the payment.

The Benefits of Using CSG Forte’s Recovery Solutions

Whatever the causes, NSF payments cost your business valuable time and money. At CSG Forte, it’s our goal to help streamline payment processing and protect your business from potentially nefarious actors. Our recovery solutions allow businesses to automate the process of recovering NSF payments. We will attempt to re-collect NSF payments up to two times on your behalf for ACH payments, saving you significant time and hassle. Benefits you’ll enjoy with this service include:

  • Improved payment recovery: Our smart re-presentment functionality allows companies to re-present payment when they will most likely receive a recovered payment.
  • Boosted revenue: Besides receiving the complete value of recovered payment, your business will receive part of the collected NSF fee and experience a revenue share.
  • Nacha compliance: Recover NSF payments with peace of mind. Our recovery solutions meet Nacha regulations.
  • Reduce service disruptions: Enhance customer satisfaction by reducing service disruptions due to incomplete or returned payments.

How It Works

At CSG Forte, we make collecting NSF payments simple. When you’re hit with an NSF payment, our solutions will automatically attempt to recollect the ACH or eCheck payment up to two times. Here’s how it works:

  • Returned NSF payment: Our recovery solution automatically queues the payment for strategic re-presentment.
  • Automated re-presentment: Using our advanced re-presentment technology, we strategically reattempt payment.
  • Successful collection: If the collection is successful, your business will receive 100% of the face value of payment.
  • Unsuccessful returns: If we cannot successfully recover the payment for you, we’ll return the check to you so you can move into collections and get your funds back. With a 60% average recovery rate, we’re confident we can help your business collect payments and avoid returned payments in the future.

Get in Touch With Us Today

When a customer’s payment is returned, it results in frustrating service disruptions and cash flow issues. At CSG Forte, we’ve developed a solution to automate the process of reattempting and collecting payments lost to NSF checks at no cost to you. With our recovery solutions, you can minimize the risk of time-consuming recovery processes and focus on driving business growth. Contact us today to learn how one large enterprise organization recovered $78 million through CSG Forte’s recovery solutions.

 

Finding a Secure Approach to Accepting Phone Payments 

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Credit card fraud is widespread—and it’s expensive for U.S. consumers. In fact, one recent survey found that 60% of Americans have experienced credit card fraud at least once, and 45% have been victimized multiple times. It should be no surprise, then, that according to a recent McKinsey & Company report, 69% of U.S. bill payers rank security as a top feature in the digital bill payment process.

One area of heightened risk is taking credit card payments from your customers over the phone. Your organization needs to get paid, and you can leverage tools to make taking over-the-phone and call center payments more secure.

Merchants who accept credit card payments must comply with the Payment Card Industry Data Security Standard (PCI DSS). Payment card brands may fine merchants up to $500,000 per incident if they aren’t PCI compliant at the time of a data breach.

 

Taking Credit Card Payments by Phone Can Be Risky Business

When consumers think of how contact center agents take payments, they often think of being asked to read off their credit card number, expiration date and card verification value (CVV) code over the phone.

If that doesn’t make you a little nervous, it should. Why? That method of sharing card information may increase the risk of credit card fraud for several reasons:

  1. A contact center agent may write the credit card information down on a piece of paper or somewhere visible where another person could walk by and steal the information.
  2. A disgruntled employee taking the payment may steal the credit card information, using it to make unauthorized purchases or obtain funds from the account.
  3. The customer may be in a public place when reciting credit card details. Someone may overhear the conversation and jot down the credit card information.
  4. Reading out a CVV code negates the reason for having it. This code is used to prove the payer has possession of the card at the point of payment. Someone who overhears and captures that CVV can use it to make card-not-present charges.

 

Discover Better, More Secure Ways to Take Credit Card Payments Over the Phone

  • Inbound and outbound interactive voice response (IVR): Customers can pay via IVR by using automated voice prompts and keypad inputs, eliminating all four problems listed above. The contact center agent transfers the caller to the payment IVR system. The customer enters the card number, expiration date and CVV on their phone keypad when prompted. The IVR system is integrated into a payment gateway to make the transaction and provide the customer with a receipt number. To make it even more convenient for your customer, you can leverage an outbound IVR, where a customer can schedule a time to receive an automated call to make their payment.
  • Live agent assist technology: Businesses can leverage payments technology to have contact center agents quickly send customers a link to a custom online payment page for payment. By using a solution like CSG Forte’s Payer Engagement Platform, contact center agents can easily create an invoice with a few clicks of a mouse and send it to the customer via email or text message. This allows customers to pay promptly and securely—without sharing their credit card information with the agent. This method of payment greatly reduces the risk of fraud, as well as the risk of exposing customers’ personally identifiable information, or PII.

The Payer Engagement Platform is a secure digital payment solution that enables customers to make payments using their preferred channel and payment method, at any time. By incorporating IVR and live-agent assist technology, businesses can ensure secure, efficient and customer-friendly payment processes that minimize fraud risk and protect sensitive information.

Contact us to learn how the Payer Engagement Platform simplifies bill payment, improves customer experience and reduces fraud exposure.

‘Tis the Season for Secure Payments: Protecting Your Business from Holiday Fraud

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With shoppers feeling the pinch of inflation over the last year, the holiday spending outlook is a mix of cheer and bah, humbug. Just more than one-quarter (27%) of consumers plan to spend less this year than last, but slightly more (28%) plan to spend more, according to Boston Consulting Group research.

And a large portion of those consumers will be doing their holiday shopping online. In 2023, global online retail sales reached an estimated $5.8 trillion U.S. dollars globally, and projections show an expected 39% growth rate, with the global totals to exceed $8 trillion by 2027. And despite high inflation in 2024, holiday sales are expected to increase between 2.5% to 3.5% this year, bringing the total to between $979.5 billion and $989 billion, according to National Retail Federation information. E-commerce holiday sales will reach between $289 billion and $294 billion in 2024, according to research by Deloitte, compared to $252 billion in 2023.

While that’s overall good news for businesses, it also means competition for buyers’ attention (and cash) is fiercer than ever. To make sure your business stands out among other companies vying for consumers’ holiday purchases, focus on keeping your company and your customers safe from that ever-present Grinch: holiday fraud. Here are three ways you can keep your customers’ (and therefore your own) holiday merry and bright:

 

1. Hosted Payment Pages Are Your Digital Shield

The global community continues to adopt online payments at breakneck speed—65% of adults reported using a digital wallet at least once a month. And all that money moving around means cybercriminals are eager to find ways in. That’s why safeguarding your customers’ payment data on securely hosted payment pages with a reliable payments provider should be top of your holiday to-do list. By directing your online payments through secure pages, you’re ensuring that sensitive payment data doesn’t linger in your system like a misplaced ornament.

What’s so special about securely hosted payment pages? Both your company and your customers are safe, and transactions are seamless. Customers enter their payment details on a page hosted by the payments provider, keeping the crucial data away from your servers and reducing your PCI (Payment Card Industry) Data Security Standard scope. This ensures a worry-free experience for both you and your customers that leaves would-be fraudsters out in the cold.

 

2. Digital Wallets: Secure, Convenient—and Gaining Popularity

There’s no better gift to offer your customers than secure and convenient digital payment methods. That’s why offering your customers payment options using their preferred digital wallet is guaranteed to put you on their “nice” lists. With enhanced security features, digital wallets provide a seamless, hassle-free and speedy checkout experience.

By offering popular digital wallets at your checkout, you’re not just embracing the holiday spirit—you’re also aligning with what consumers trust. Because digital wallets have such a robust safety record, consumers are trusting their services more and more. In fact, more than half (57%) of respondents to a National Retail Federation survey say they plan to use digital channels for their 2024 holiday purchases, and more than three-quarters (76%) of respondents to a Bain & Company survey said they planned to buy at least half of their holiday purchases online, creating more opportunities for bad actors’ schemes to steal valuable data. That’s because digital wallets safely store payment credentials and employ advanced encryption techniques to keep them protected. It’s a win-win—customers get a seamless payment experience, and you get the peace of mind that their data is protected.

 

3. Use Tokenization to Thwart Fraudsters

While fraudsters will always try and bring a little Grinch to the holidays, you can keep them off your payments platform (and on the “naughty” list) by replacing actual card and ACH payment data with generated randomized tokens. This “tokenization” converts your customers’ sensitive personal information into tokens that have no intrinsic value and provide no value to fraudsters—you can think of it as the equivalent of leaving fake presents under the tree for anyone attempting to snatch them. A reputable payments provider can assist you in implementing this robust layer of security, ensuring that even if a Grinch manages to sneak into your system, they leave empty-handed.

Don’t let the fear of fraud steal your joy this holiday season. By following these three tips—utilizing hosted payment pages, offering secure digital payment methods and embracing tokenization—you can ensure your online business stays secure while shoppers stuff their carts.

CSG Forte is here to protect your payments this holiday season. Contact us to get started today.

Payment Authentication

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Payment authentication is critical for businesses and entities accepting payments from clients and end users. The right solution goes beyond mitigating fraud. It helps identify incorrect details to reduce payment errors and lessens waiting time due to identification failure, ensuring a swift, successful payment process.

Types of Payment Authentication

The two primary types of authentication are two-factor authentication and biometric authentication.

Two-Factor Authentication (2FA)

When the end user transacts with you, your security system will prompt them to verify their identification through two distinct forms. Usually, the first step is entering their password and the second is validating their identity by entering a code they received via text. The second authentication method could also include fingerprint or face recognition.

Biometric Authentication

Biometric authentication uses facial recognition, retina identification or a fingerprint to authenticate the end user. Biometrics is a safer, more secure way to validate your client’s identity than other legacy methods.

Payment Authentication and Authorization

Both payment authentication and authorization serve as means to ensure that a transaction is successful. The two do, however, have distinct roles within the payment process.

During authentication, the client or end user must show that they’re the person authorized to use the credit or debit card. They have to share information to verify their identity. Authorization is essentially the second step, which ensures there are sufficient funds in the user’s account to complete the transaction.

With this layered approach to payment authentication, it’s vital that your business has the necessary tools to accept payments seamlessly.

The Importance of Payment Authentication

Payment authentication is critical in protecting your business and end users. CSG Forte helps you scale your business while protecting users’ data with a unified payment platform. You can accept debit, credit and ACH payments safely with our comprehensive approach to payment authentication.

Stay Nacha-compliant by validating payments with real-time, actionable data so you can keep business transactions going without delays caused by manual errors. Our payment authentication solution:

  • Protects you from unauthorized transactions: Unauthorized transactions can cost you money and downtime. Payment authentication helps ensure users are authorized and transactions are valid.
  • Mitigates fraud: A comprehensive, secure authentication system helps mitigate fraud and identity theft. Successful authentication gives you the confidence to transact with end users.
  • Reduces payment errors: Manual insertion of account numbers and other important details can result in errors. Payment authentication can help identify them before authorization.
  • Builds client trust: Your customers will appreciate your protecting their data with high-level security solutions. Security builds trust and confidence, ensuring you foster good client relationships.
  • Engages end users: The right payment authentication method can engage users when you utilize industry metrics to your advantage. Evaluate and quantify user experience from different methods to maximize client satisfaction.
  • Increases your bottom line: Reliable authenticating and validating payment systems that decrease transaction delays can reduce returned checks and speed up the payment process.

Future Trends in Payment Authentication

Payment authentication systems are becoming more secure and decentralized. Here’s a look at what’s ahead.

Technological Evolutions in Payments

Payment ecosystems are becoming more future-ready. The industry is introducing new ways of securing systems and standardizing operations, including:

  • Artificial intelligence (AI): AI can process large batches of information faster and more securely than humans. It’s paving the way for innovative, dynamic security solutions in the fintech industry.
  • Blockchain: Blockchain cuts out intermediaries and decentralizes the payment process. It offers transparency and robust protection against fraud and hackers.
  • Payment as a Platform (PaaP): PaaP revolutionizes the payment experience. Third parties can offer their services on payment platforms and create new revenue streams.

Continuous Authentication Methods

Continuous authentication methods validate users throughout online sessions, not just at the beginning. Validating users throughout an online transaction helps prevent fraudsters from hijacking the session. When the user pauses, ends or is away from their screen for an extended period, the software prompts them to enter their security credentials again.

Best Practices for Implementing Payment Authentication

Implementing a secure payment authentication process is just the start. It’s best to complement it with other security measures, including:

  • Require strong passwords: A strong password policy for your end users secures your platform and their payment information.
  • Upgrade your communication channels: Whether you use an online chat service or automated cross-application communication, secure your communication channels with a robust system.
  • Regularly update your security patches: When you update your system regularly, you strengthen your security. Close patches that could threaten your sensitive information with regular checks.
  • Train staff and keep your end users informed: Maintaining cybersecurity is a team effort. Keep all parties updated about the latest threats and adequate security measures.

Implementing Payment Authentication in Your Business

Integrating secure authentication processes is paramount to protecting your clients’ data. There are several factors to keep in mind, such as:

  • Authentication and validation: Authenticating and verifying identity can reduce returned checks and costly fraud.
  • Accepting payments: An agnostic payment system can accept payments cross-border and from any channel.
  • Integration: Add-ons and third-party integration should be flexible. Seamless integration and effective resale of separate software components bring new streams of revenue.

Payment authentication should be implemented in any business that accepts payments locally or globally. It can benefit small and medium companies and entities in healthcare, property management, insurance and government.

Payment integration scales your business, which is especially valuable for independent software vendors (ISVs). Integrating the right payment software with your existing offer allows you to deliver more in one streamlined solution.

CSG Forte Is Your Trusted Partner in Payment Authentication

A comprehensive payment authentication system protects you and your end users from fraud and reduces payment errors before authorization, ensuring seamless transactions. With the rise of AI and forward-thinking technology, payment solutions will continue to evolve. Adopting an all-in-one solution from CSG Forte can help you scale your business, ensuring you accept payments seamlessly and safely.

We at CSG Forte work hard to simplify your payment processes. Create an account today if you’re ready to get started. You can also call us at 866-290-5400 or reach out online for more information.

Frequently Asked Questions About Payment Processing

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The digital payments market is projected to reach $16.62 trillion by 2028. All businesses should be familiar with the basics of payment processing to remain agile in a competitive industry and ever-expanding landscape. We’ve answered some frequently asked questions (FAQ) about payments and their processing to help you get started.

Payment Methods

Understanding the terms and systems that go into payment processing gives you the edge to offer your customers frictionless, secure and simple ways to pay. Here are answers to some common questions about payment methods.

1. What Goes Into a Transaction Flow?

The transaction flow consists of various participants and components, including:

  • Customer: The customer is the individual or organization paying for services or products.
  • Merchant: The merchant is the service provider or business receiving payment from the customer.
  • Payment method: The payment method is how the customer pays—via check, credit or debit card, cryptocurrency, or electronic wallet.
  • POS system: The point-of-sale (POS) system is a digital platform or physical device used for the transaction. The POS system can be on an e-commerce website, app or terminal point at a store.
  • Payment gateway: The payment gateway safely captures and sends information from the POS system to the acquiring bank or payment processor. This gateway encrypts and secures the data during the transaction.
  • Payment processors: The payment processor is a third-party company managing the technicalities of the transaction. These technicalities include validating information, receiving authorization, and facilitating communication between the acquirer and issuer.
  • Acquirer: The acquiring bank, or the acquirer, is the financial institution where the merchant’s account is. The acquirer receives payments on behalf of the merchant, processes transactions for the merchant and settles the funds in the account.
  • Issuer: The issuer or issuing bank is the financial institution that authorizes or declines the transaction on behalf of the customer. Issuers consider customer account status, the validity of the transaction and available funds.
  • Card network: The card network includes organizations like Mastercard, Visa and American Express. These organizations provide the infrastructure, rules and standards for processing transactions.
  • ACH network: The Automated Clearing House (ACH) network is used to move money between bank accounts in the United States electronically. Nacha, previously called the National Automated Clearinghouse Association, runs the ACH network and ensures the payment system is safe and efficient. Transaction types include business-to-business, consumer and government transactions.
  • Payment security: Payment security consists of a range of technologies and standards to ensure transactions are secure from breaches and unauthorized access. Security involves encryption, tokenization and compliance with the regulations set by the Payment Card Industry Data Security Standard (PCI DSS) Council or the ACH network for bank-based payments.
  • Settlement: Settlement and reconciliation are the processes of transferring funds from the issuer to the acquirer and updating the transaction records to reflect the funds transferred.

2. What Is Payment Authorization?

Payment authorization is when the issuer verifies that the customer has the available funds and confirms that money can be released from the customer’s account. The issuing bank conducts thorough checks before authorizing transactions.

3. What Are Payment Settlement and Operations?

Payment settlement starts with customer payment initiation and ends once the funds are deducted from the customer’s account and paid to the merchant.

During settlement, the issuing bank verifies the transaction details and authorizes money to be debited from the customer’s account and credited to the merchant’s account. This settlement communication operates through the payment network.

4. What Are the Needs and Considerations of E-Check and Credit Card Payments?

E-checks and credit card payments have a few key differences:

  • E-check payments: The Automated Clearing House (ACH) merchant network processes e-check payments between participating financial institutions. E-checks are categorized as electronic funds transfers (EFTs). They work like ACH transfers with routing and account numbers, facilitating funds transfer between accounts. Electronic checks can save your business on payment processing costs—they’re typically more affordable than card transactions.
  • Credit card payments: Card authorization occurs when the merchant accepts a card payment and the payment processor reaches the card issuer. The issuing bank ensures the credit card is valid, verifies the transaction amount and available funds, and does security checks. The issuer will deliver a two-digit code approving or declining the transaction. Credit card transactions are convenient for customers, especially those who prefer to have a range of payment options.

5. What Are the Top Digital Wallets and How Do They Work?

The top digital wallets in North America include:

  • Apple Pay
  • Google Pay
  • PayPal
  • Venmo

Digital payment wallets use software that links your payment details from your bank account to the vendor you’re paying. Some apps offer open wallets that allow contactless online and in-store payments.

Electronic wallets make payments easy for customers—there’s no need to keep card details on hand to pay, and the information is stored in one central, protected location.

6. What Does Accepting On-Site Payments With Devices and POS Entail?

If you want to accept on-site payment with POS systems and devices, you need the associated hardware and software. You’ll also need a payment solutions provider.

The necessary hardware includes a card acceptance machine, like a POS terminal. The hardware connects to software that processes transactions via the provider’s solution. POS terminals can accept several types of payments, including contactless payments, credit and debit cards. Customers can tap, swipe and insert cards depending on their preferences.

Processing Models

Processing models allow transactions to happen between the issuer and the acquirer. Here are the related questions answered.

1. What Is a Payment Gateway?

A payment gateway links all entities involved in a transaction and helps systems communicate with each other. Payment gateways establish secure connections to transmit data and process the transfer of funds from the customer’s account to the merchant’s to complete payment.

2. What Is an Enhanced Payment Gateway?

An enhanced payment gateway is a robust version of a standard payment gateway. This solution goes beyond processing payments, leveraging advanced fraud detection capabilities. Enhanced payment gateways may also feature subscription billing and customizable checkout options.

3. What Is an Acquired Payment Gateway?

An acquired payment gateway is a payment processing solution offered by a payment service provider. This solution lets you securely receive customer payments using online wallets, debit cards and credit cards. The gateway handles authorization, transaction processes and the transfer of secure funds into your account.

4. What Is a Payment Facilitator?

A payment facilitator (PayFac) simplifies the setup of payment processing for your business, allowing you to accept in-person and online payments. The PayFac has a master merchant account. Your business becomes a sub-merchant under the PayFac, eliminating the lengthy underwriting process. The PayFac enters a contract with the acquiring bank and manages the approval process on your behalf.

5. What Does It Mean to Be a Third-Party Sender?

A third-party sender (TPS) facilitates ACH transactions by having funds flow through its account. Third-party senders act as intermediaries, making payments on behalf of customers. This approach provides little protection in terms of risk management and adherence to safety standards. A TPS typically comes with higher transaction fees because of the higher involvement in the flow of funds.

6. What Is the Difference Between a Third-Party Sender and a Third-Party Service Provider?

A third-party sender directly receives and transmits funds through its bank account on behalf of a company. A third-party service provider does not hold funds and transfers funds to ACH network users.

When third-party senders pay on behalf of a client, the risk involved tends to raise the price. A TPS solution can also cause customer onboarding friction.

Leveraging a third-party service provider (TPSP) offers greater security, as these entities strictly adhere to regulations and don’t automatically move money. You’ll also benefit from faster processing times, better customer onboarding, flexible transaction limits and lower transaction fees.

Pricing

Payment processing pricing is also an essential consideration for your business.

1. What Is an Interchange Fee?

Interchange fees make up the majority of payment processing fees. You pay interchange fees to financial institutions that manage the customer’s card payments. These are standard charges that come with the convenience of using a specific payment method.

2. What Is Pass-Through Pricing?

Pass-through pricing includes interchange, assessment and payment processor fees. These fees are typically itemized or combined monthly on a statement for a merchant to pay. Pricing structures differ, so it’s important that your business partners with a competitively priced payment solutions provider.

3. What Is a Flat- or Fixed-Rate Model?

A flat- or fixed-rate model charges your business the same processing fee percentage regardless of the card used. The flat-rate percentage is typically based on the cards with the highest interchange rates.

4. What Is a Convenience Fee?

A convenience fee is an additional credit card or online payment charge. It’s sometimes charged by a payment processor when a customer does not pay by cash, check or ACH. It can be applied as a split charge or split fund.

5. What Is a Split Charge?

With a split charge, the payer sees two entries on their statement—one for principal and another for convenience.

6. What Is a Split Fund?

Merchants can set up predefined splits to go to different bank accounts. Split funds come in handy when your business charges convenience fees that need to go to a separate account from the transaction amount. Debit and credit funding bank accounts are usually set up this way for merchants.

CSG Forte offers split funds and handles the setup to ensure hassle-free allocation.

Integrations

Integrated payments connect your POS system to a payment processor, offering streamlined transactions.

How Does Integration Impact the Payment Experience?

Integrated solutions enable you to offer a better payment experience. Customers can pay using various methods without the need for different payment terminals or manual processes, making transactions frictionless.

With CSG Forte, integrated payments are an all-in-one solution that benefits your business and customers.

 Payment Security

No payment processing FAQ would be complete without info about payment security.

1. What Is Tokenization?

Payment tokenization is a security measure that uses unique tokens instead of transmitting sensitive payment data during transactions. These tokens protect information like banking details, primary account numbers (PANs) and credit card numbers.

2. What Is the Payment Card Industry Data Security Standard?

PCI DSS is a set of standards requiring all businesses that handle credit card or payment information to maintain a secure environment. These compliance standards apply to all organizations, no matter the size of your business or the amount of transactions it handles.

3. What Are the Top Considerations for Nacha Compliance?

Nacha offers rules and requirements for any organization leveraging ACH payments. Here’s a brief overview of what Nacha expects your business to do:

  • Secure payment transmission and storage of sensitive information.
  • Store hard copies of documents with customer information safely.
  • Validate customer routing numbers.
  • Guard against possible fraud.
  • Verify customer identities.
  • Outline and enforce an official security policy.

4. What Is End-to-End Encryption?

End-to-end encryption (E2EE) is a way to safeguard your customers’ data during transactions. This encryption prevents data breaches and unauthorized access to sensitive information like credit card or bank account details. Sensitive information is encrypted and securely transmitted from one point to the next, allowing your customers to pay you safely.

The payment gateway performs the encryption when the customer initiates the payment, and it decrypts the information when it reaches the acquirer.

5. What Is Point-to-Point Encryption?

Point-to-point encryption (P2PE) is an encryption method established by the PCI DSS Council. It offers excellent protection, using an algorithm to encrypt card information when the customer initiates payment. The unreadable code is transmitted to the payment processor with a decryption key. The decryption happens virtually, so your business never comes in contact with customer payment information.

While P2PE and E2EE are similar, the PCI DSS Council only accepts point-to-point encryption.

Ready to Streamline Your Payment Solutions?

CSG Forte will help you scale your business rapidly and make payments frictionless for you and your customers. Each year, we help process over $84 billion of payment transactions.

Contact us online to simplify and secure your payments.