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2 mins Read | 2 Years Ago

Don’t fall victim to Merchant Frauds

Don’t fall victim to Merchant Frauds

We’re well aware of the recent frauds and security breaches in India. Having affected large sections of the population, cases of people getting conned have only been on the rise. The media has also begun reporting such incidents, triggered by the numerous complaints raised with relevant authorities. Hence, it's critical to remain alert and cautious, and also learn how these scams really work.

Let us understand what exactly merchant frauds are:


When a scammer appears as a merchant and tries to execute transactions or steal payments, we call it a merchant fraud. Obtaining a merchant account to process payments using stolen cards, or enticing real customers to make futile purchases, are some examples of this kind of fraud.

How these scams work?

A "bust out" scam is one of the most common ones. It is activated when a perpetrator registers one or more merchant accounts, pretends to be a legitimate merchant, and begins processing transactions and extending credit lines.

While on one hand, some criminals make false claims of having set up businesses to attract actual consumers and take fake orders, others just utilise their merchant accounts to make transactions using stolen Credit Card details. These conmen wipe the cash out and disappear once the merchant accounts are full.

The surge in peer-to-peer (P2P) payment apps has dramatically increased the risk for clients that fall prey to these scams. Such apps were originally designed to be used for peer communication, however they are increasingly being used to make transactions. While recurring billing is available for Credit Card payments in the event of a crime, most P2P apps offer no way for users to get their money back.

Often legitimate merchants find themselves barred from creating an account in a preferred market, either due to preceding wrong doing, misconduct, mismanagement, or because of regulatory restrictions in their native country.

These merchants may resort to switching accounts with businesses that are allowed to open local accounts. Quite often, the merchants that participate in such identity swapping scams simply want to sell legitimate things and make money, but on rare occasions, they will want to indulge in theft or offer illegal items.

Stay secured and protected 

Though scams involving money laundering and identity theft might go unnoticed for even longer, merchant fraud is easier to detect once fake bills appear on bank records and cardholders contact the bank to dispute them. Before that happens, a great deal of damage may have already been done.

The reality is, there isn't much that a genuine merchant can do to combat these scams besides declining to participate in such trickery themselves.

So, take enough time to acknowledge and clarify your acquirer's or payment processor's agreements, observe their transaction rules, and contact them, immediately, if you have any question regarding a transaction you've been requested to make.

Why ICICI Bank Super Merchant Current Account:

As ICICI Bank recognises all the expectations and standards of merchants, we have introduced a full-fledged Super Merchant Current Account that provides simple and rapid collection options, including QR Codes, payment gateways, POS Machines, and more. These services are designed primarily for merchants and retailers that want to conduct business or trade via secure and safe pathways.


Terms and conditions apply.

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