Keeping The Online Lights Burning

Chase Paymentech Offers MMO Fraud Protection

Creating and running a massive multiplayer game serving thousands of players is far from child’s play. In fact, there are many challenges that host companies can expose themselves to in regard to accepting electronic payments. The fact is that accepting payments online is an effective way to conduct business, but it’s important to be mindful of potential fraud that could affect any MMO’s bottom line.

The makers of an MMO can actually lose money accepting their payments online if they are not careful. Thankfully, MMO providers have ways to help defend themselves from payment fraud. In fact, veteran merchant acquirer Chase Paymentech has solutions designed specifically to help protect MMOs and their users, keeping everyone safe when connecting to, and paying for, their favorite online worlds.

We logged in with Senior Vice President of Chase Paymentech Solutions, Greg Worch to find out what kind of financial challenges new MMO providers typically run across, and how Chase Paymentech can help provide multiple lines of defense, to keep the gold flowing.

GiN: Chase Paymentech is really taking their knowledge and experience and applying it to the world of online gaming. What specific services do you offer online game companies?

Worch: Chase Paymentech offers online gaming companies efficient, fast, reliable and secure payment processing. Today, we process two out of every three Internet transactions and are the world’s largest merchant acquirer. What does this mean for an online gaming company? It means that we have the breadth and expertise to optimize the value of payment processing for our customers to maximize revenue potential, reduce risk and increase cash flow.

GiN: So how can Chase Paymentech help online games maximize sales?

Worch: We are constantly assessing and developing new products and services to meet the needs of our merchants. Chase Paymentech is the leading provider of alternative payments, offering fully integrated support for PayPal®, BillMeLater®, GreenDot® MoneyPak, electronic checks and PINless debit. GreenDot® MoneyPak, offered this year, offers the cash preferred consumer online payment options. This is a particularly strong payment method for teens and young adults. By offering a wide range of payment types, we provide our merchants with access to markets that they wouldn’t otherwise have.

In addition, helping consumers feel comfortable using online payments is an important strategy in increasing an operator’s sales. Chase Paymentech uses state-of the art encryption technology and a hardened infrastructure to help ensure that merchants and their customers have a seamless and safe buying experience.

GiN: Behind all the elves, dragons and space marines, online games are a business. And like running any business, there are risks. What type of risks are online game providers facing and what kind of protection is available?

Worch: Although credit cards provide a safe and effective means of payment for online gaming, they also expose the merchant to risk not associated with retail face-to-face transactions. In traditional retail environments, merchants receive a signed receipt and can check identification at the point-of-sale. Online merchants don’t have this luxury and fraud perpetrators online seek to take advantage of this. They come in many forms including professional cons created specifically to steal legitimate credit card information, use of false or stolen cards and "friendly fraudsters," amateurs who simply want to "beat the system." Some alter their own cards, use unsuspecting family members’ cards or steal information from their place of employment either for themselves or for sale to others.

Unique in the online gaming environment, credit card thieves have been known to launder money by fraudulently acquiring in-game objects. These fraudsters then sell the virtual objects for cash.

As the scope of digital gaming grows, the opportunity and potential for financial losses increases. That said, digital gaming companies are becoming more sophisticated in the way they combat fraud. They’re choosing to do so because they realize that people who perpetrate fraud on their gaming sites also cause other types of problems within the gaming community.

GiN: How so?

Worch: The people who cause financial losses in game communities are digital con men, using stolen data as a way to turn a profit. For a long time, game providers largely ignored this issue, because the losses caused were relatively modest. But for the same reason you don’t want to let con men operate in your hometown, community owners are starting to crack down on fraudsters. The driver is the impact that they have on the honest players, who can abandon a game if they feel that they’re at risk.

In addition, a number of our merchants have indicated that those who enter a game with fraudulent identities are more likely to be disruptive, causing problems for other game players and increasing operational cost for the game operators.

GiN: In the future, with more money at stake and more thieves on the hunt for some of it, how does Chase Paymentech Solutions plan to stay one step ahead of the bad guys?

Worch: Our deep industry expertise and strong partnerships with dedicated fraud management providers allow us to help merchants defend against fraud and manage risk. We help our merchants take advantage of all the card association fraud tools, and can provide benchmarking and best practices data. There are a variety of ways to attack fraud, and we help our customers select the approach that best serves their individual need.

GiN: Are the merchants, the online game providers, liable for most losses due to online crime?

Worch: Under the rules established by the card issuers, merchants are liable for most customer disputes, which are often called chargebacks. That’s all the more reason to set up your business in such a way as to avoid as many of them up front as possible. Fifty to seventy-five percent of all chargebacks are a result of fraud. However, merchants can avoid this potential loss if they use Verified by Visa® or MasterCard® Secure Code. These tools require authentication of the cardholder as part of the transaction and are designed to minimize risk.

GiN: Chase Paymentech Solutions’ majority owner is JP Morgan Chase bank, but your company itself has a rich twenty-year history. Tell us a little bit about Chase Paymentech Solutions, how it started and its track record with companies.

Worch: Chase Paymentech has specialized in processing card-not-present transactions since 1985, first for catalog and mail-order companies, and now for a wide range of online and service businesses. Over the years we have built the premier payment processing platform in the industry, which has been designed from the ground up to provide optimal service for online transactions. Because we process a majority of the online transactions in the US, we have also developed tremendous depth of experience in this space, this allows us to provide superior service, and ensure that our customers have the industry’s lowest cost of payment processing.

We have a wide range of payment-processing solutions for virtually every type of merchant, and in over 140 difference currencies. Last year we processed 19.7 billion transactions and $719 billion in transaction dollar value at over one million merchant locations worldwide…

GiN: If you are a new online game company, is it difficult to get setup and working with Chase Paymentech?

Worch: Not at all. We have worked with many small companies over the years, and some have become the largest names in the digital gaming and content industry. Because we have so much experience in the space, we can help new companies optimize their billing and payment acceptance practices to minimize risk and maximize revenue. Our sales professionals have significant industry experience and will work with merchants of all sizes to bring customized payment to the table. When a customer is converting to us from another payment processor, we closely manage the entire process to provide a smooth and seamless transition.

GiN: Can a new company that is just starting out afford to implement Chase Paymentech services?

Worch: Not only can they afford to work with us, they are likely have a lower total cost of accepting payments with Chase Paymentech than they would working a another payment processor. Because of our experience working with digital content companies, we are able to provide ways to reduce chargebacks and processing expenses plus use alternative payments to provide our customers with significant savings.

We focus on a customer’s unique business environment to provide meaningful and cost effective payment services. As a result, we provide measurable, long-term financial benefits. Our interchange management services can help identify cost savings for our customers and our chargeback management services help reduce the cost of managing chargebacks while improving accuracy and documentation.

GiN: How does Chase Paymentech Solutions offer more to customers than its competitors in the market?

Worch: Chase Paymentech has over twenty years of experience and scale in the industry. This tenure has allowed us to have unmatched payment processing expertise, long-term partnerships and comprehensive payment solutions. We are a single source provider to our customers with a state-of-the-art established infrastructure and world-class customer care.

Our leadership in this industry allows us to be an advocate with significant representation and involvement in payment industry governing bodies including Visa®, MasterCard®, STAR® and NACHA-The Electronic Payments Association to name a few.

GiN: So what does this mean for your customers?

Worch: It means that we can ensure that our customers are able to use payments as a strategic advantage. Our customers have peace of mind, knowing that their electronic payments are handled securely, reliably and efficiently. Most importantly, our customers know that Chase Paymentech will be able to support them as they grow, providing the solutions they need to reduce operating costs, increase revenue, and maximize the user experience for their customers.

If you would like more information on Chase Paymentech, please visit their site right here.

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