• Latest
Top Shopify Fraud Protection Apps [UPDATED]

Shopify Payments Shutdown

June 21, 2022
Moving identity authentication earlier in customer flow is top of mind at MRC Vegas 2023:

Moving identity authentication earlier in customer flow is top of mind at MRC Vegas 2023:

March 28, 2023
How to Strengthen Your Small Business’s Defenses Against Identity Theft

How to Strengthen Your Small Business’s Defenses Against Identity Theft

March 23, 2023
How Companies Can Avoid Zero-Party Data Fraud

How Companies Can Avoid Zero-Party Data Fraud

March 13, 2023
New Podcast Episode: Walls of Thieving Cellphones with Nethone

New Podcast: How to Stop Return Policy Abuse Fraud (Pt. 2)

February 22, 2023
Germany’s Fraud Prevention Firm Hawk AI to Focus on Global Expansion with $17M Series B

Germany’s Fraud Prevention Firm Hawk AI to Focus on Global Expansion with $17M Series B

February 15, 2023
Merchant Fraud Journal Releases Biggest Annual Fraud Trends Report Yet with Insights from 16 Leading Payment and Fraud Solutions

Merchant Fraud Journal Releases Biggest Annual Fraud Trends Report Yet with Insights from 16 Leading Payment and Fraud Solutions

February 7, 2023
Curbing emerging fraud types with network intelligence and data enrichment

Curbing emerging fraud types with network intelligence and data enrichment

January 31, 2023
Policy Abuse Fraud: What Is It and How to Protect Against It

nSure.ai Delivers Growth to Digital Commerce Leaders and Boosts YoY Revenue by 280%

January 25, 2023
Fraugster and Refurbed partner to increase approval rates and reduce fraud for refurbished electronics marketplace

Sift Appoints Former Ping Identity COO Kris Nagel as CEO

January 20, 2023
Veridos Announces Innovatrics as Strategic Partner for Advanced DNA ID Verification

Veridos Announces Innovatrics as Strategic Partner for Advanced DNA ID Verification

January 19, 2023
New Podcast Episode: Walls of Thieving Cellphones with Nethone

New Podcast: How to Stop Return Policy Abuse Fraud

January 10, 2023
How to Write a Strong Chargeback Policy: Tips to Help You Protect Your Business

How to Write a Strong Chargeback Policy: Tips to Help You Protect Your Business

January 6, 2023
  • Contribute
  • Contact Us
  • About
  • Join Us
  • Advertise
Wednesday, March 29, 2023
Merchant Fraud Journal
  • Home
  • Articles
    • Chargebacks
    • Fraud Prevention
    • Influencer Insights
  • Resources
    • Recorded Webinars
    • Podcasts
    • Vendor Directory
    • eCommerce Fraud Reports
    • Training and Certifications
    • Jobs Board
    • Associations and Non-Profits
  • News
No Result
View All Result
  • Home
  • Articles
    • Chargebacks
    • Fraud Prevention
    • Influencer Insights
  • Resources
    • Recorded Webinars
    • Podcasts
    • Vendor Directory
    • eCommerce Fraud Reports
    • Training and Certifications
    • Jobs Board
    • Associations and Non-Profits
  • News
No Result
View All Result
Merchant Fraud Journal
No Result
View All Result

Shopify Payments Shutdown

by Bradley
June 21, 2022
in Articles, Chargebacks
Top Shopify Fraud Protection Apps [UPDATED]

Running a business in a high-risk industry will pretty much always result in issues with payment processing. The problems becomes even more complex if you are running a Shopify store and using Shopify Payments to process transactions. At some point Shopify may decide to shutdown Shopify Payments for the store. This is despite the fact that Shopify makes a list of what it considers to be high-risk available on its website and even if your business is not on the list of industries, merchants may continue to get shutdown. The main reason for this is falling under some definition of the platform’s understanding of ‘high risk’.

There are several factors which may land your business to be classified as ‘high risk’. For example, selling products with complicated regulatory schemes (cannabis), a high potential for lawsuits (nutritional supplements), or licensing requirements (gambling) come with potential payment processor liability attached and so are banned.

But even participating in a legal industry can still get you shutdown. Many merchants fail to realize that high levels of chargebacks or product returns will put you under a microscope. Despite often being the victim, a track record of chargebacks and returns makes a merchant look like they are selling fraudulent merchandise or using deceptive business practices. Too many indicators of eCommerce fraud and your Shopify Payments will be shutdown, or worse your store will get shut down.

Shopify Payments’ terms of service also keeps their policies vague and decision making process opaque, so you could also get shutdown for seemingly no reason whatsoever. This is not by accident but rather by design. It gives Shopify the power and flexibility to shut down any merchant that they deem to be high-risk in order to mitigate their own risk exposure.

Causes of Shopify Payments Shutdown

To reiterate, running a business in any of the legally dubious industries mentioned above or in an industry known for high chargebacks is problematic. Individual stores with high fraud indicators can expect to get closed down, regardless of industry.

Anything commonly considered illegal or deceptive will get you shutdown immediately regardless. Get rich quick schemes, multi-level marketing schemes, ‘revenge’ sites, and anything blockchain/crypto are out. Anything in the financial and investing world like bill pay, debt reductions, and brokerages is also out. Stealing IP by creating merchandise for creators that didn’t give you permission or selling fake LVHM products that you imported from China — also out. And intuition tells you you can find on the dark web like drugs or drug paraphernalia will also get you banned. Explicit material is a grey area, but it’s far from clear what the criteria is for remaining open.

What you may not be aware of but some industries which may appear to be legitimate low-risk are in fact considered by Shopify to be High-risk. For example hair-extensions merchants and some digital goods merchants would not be able to get past Shopify’s risk assessment thresholds. This is typically due to the high rate of chargebacks these industries face.

How to Restart After Shopify Payments Shutdown?

What you don’t want to do is quickly create a new Shopify store to keep doing the same thing. Algorithms are good and will catch you; you’ll get banned again and again. It’s not worth the hastle and stress of wondering when you are going to have to start over again.

Payment processors compete with one another but not on attracting the high-risk payments market. You can try moving to Paypal, but their Acceptable Use Policy is pretty similar to Shopify Payments’. Again, the threat of chargebacks looms. Preventing Paypal chargebacks is no different than on any other platform. Shopify charges you for using their store platform and a % of transactions if you use their payments service, if you use an external payment provider you’ll just end up paying both fees.

You may want to consider a different eCommerce platform. There are several self-managed solutions such as Magento and WooCommerce that do not have the strict regulation Shopify has. In addition you may also want to consider a ‘high-risk’ payment processor. Although the transaction fees are typically higher you don’t have to worry about having something as mission-critical as your payment provider shutting your store down with little to no warning.

What to do after a Shopify payment shutdown

Working in a high risk industry requires specialized payments and fraud prevention knowledge. One thing to keep in mind is machine learning fraud prevention can do the job well but requires contracting with an additional vendor. Most take a percentage and will charge a premium for high-risk industries if they even take them at all. You can go it alone with a human fraud analyst, but it’s not advised in a high-risk industry.

High-risk payments specialists exist. First, you’ll need to pay a gateway to connect to Shopify or whatever other platform you want to use and transfer the payment data to a payment processor. The payment processor sends the data to your customers’ issuing and acquiring banks. Both charge percentage fees on transactions.

Payment processing is a challenge for all merchants. Mainstream payment providers like Shopify worry about protecting themselves by limiting their exposure to liabilities. High-risk industries require more patience and scrutiny to successfully sell.

Knowing the eCommerce fraud trends and staying within the platform rules will help avoid pitfalls. Closed stores can be reopened, but should be done so wisely. You may also want to examine your eCommerce stack and see if your store may be more suited for a different provider or a high-risk payment processor.

 

Tags: Shopify fraud prevention
ShareTweetShareSend
Previous Post

Influencer Insights: An Interview with SEON

Next Post

Influencer Insights: An Interview with Riskified

Next Post
Influencer Insights: An Interview with Riskified

Influencer Insights: An Interview with Riskified

Our Latest Reports

2022 Chargeback Consumer Survey Report

Fraud Prevention Tactics that Enable Exceptional Customer Experience

Addressing Payment Fraud and The Customer Experience in 2022

2022 Fraud Trends Report

ATO Fraud In Retail Report

2022 Customer Experience Report

3 Ways a Unified Chargeback Management and Fraud Platform Increases Revenue

Digital Trust And Safety Report: Combating the Evolving Complexities of Payment Fraud

On-Demand Webinars

Balancing Customer Experience and Fraud Prevention: What’s the Secret?

Stopping Fraud Across the Customer Lifecycle

Addressing Payment Fraud and the Customer Experience in 2022

 

Get the 2023 Fraud Trends Report

Search Our Site

No Result
View All Result

Our Sponsors

Featured Directory Listings

  • logo
    NoFraud
  • SEON. Fraud Fighters
  • sift logo
    Sift
  • Signifyd
  • Ekata
  • Microsoft Dynamics 365 Fraud Protection
  • PayRetailers
  • Spotrisk

Our Sponsors

Fraud Industry News

Moving identity authentication earlier in customer flow is top of mind at MRC Vegas 2023:

Moving identity authentication earlier in customer flow is top of mind at MRC Vegas 2023:

March 28, 2023
How to Strengthen Your Small Business’s Defenses Against Identity Theft

How to Strengthen Your Small Business’s Defenses Against Identity Theft

March 23, 2023
How Companies Can Avoid Zero-Party Data Fraud

How Companies Can Avoid Zero-Party Data Fraud

March 13, 2023

Connect With Us

Quick Navigation

  • Home
  • News
  • Join Us
  • About Us
  • Contact Us
  • Advertise
  • Contribute
  • Privacy Policy

The Payments Media Network

Merchant Fraud Journal
Payments Review

Privacy Policy

Our Privacy Policy
Our Terms of Use

Resources

  • Articles
  • eCommerce Fraud Reports
  • eCommerce Fraud Webinars
  • Training and Certifications
  • Jobs Board
  • Associations and Non-Profits
  • Podcasts
  • Vendor Directory

Popular Posts

  • How to File a Claim With FedEx + What To Do If Claim is Denied

    How to File a Claim With FedEx + What To Do If Claim is Denied

    0 shares
    Share 0 Tweet 0
  • How Does Two-Factor Authentication (2FA) Work?

    0 shares
    Share 0 Tweet 0
  • Top eCommerce Fraud Prevention Companies

    0 shares
    Share 0 Tweet 0
  • The Best Reverse Email Lookup Tools in 2022 (with pricing)

    0 shares
    Share 0 Tweet 0

Featured Vendors

  • NoFraud
  • SEON. Fraud Fighters
  • Sift
  • Signifyd
  • Ekata
  • Microsoft Dynamics 365 Fraud Protection
  • PayRetailers
  • Spotrisk

Download the 2023 Fraud Trends Report

No Result
View All Result
  • About Merchant Fraud Journal
    • Interested in Contributing or Guest Posting to Merchant Fraud Journal?
  • Advertise on Merchant Fraud Journal
  • Articles
    • Chargebacks
    • Fraud Prevention
    • Influencer Insights
  • Contact Us
  • Download Addressing Payment Fraud and Customer Experience Report
  • Download Chargebacks Consumer Survey Report 2022
  • Download Evolving Complexities of Payment Fraud Report
  • Download Fraud Prevention Tactics that Enable Exceptional Customer Experiences Report
  • Download Merchant Fraud Journal 2023 Fraud Trends Report
  • Download the 2020 Chargeback and Representment Report
  • Download the 2020 Merchant Fraud Journal Vendor Guide
  • Download the 2021 Fraud Trends Report
  • Download the 2022 Fraud Trends Report
  • Download the 3 Ways a Unified Chargeback Management and Fraud Platform Increases Revenue Report
  • Download the MFJ 2022 Customer Experience Report
  • Download the MFJ ATO in Retail Report
  • Home
  • Job Dashboard
  • Join The Merchant Fraud Journal Community
  • Merchant Fraud Journal Advertising Agreement
  • MFJ Fraud Trends Report Giveaway
  • News
  • Post a Job
  • Privacy Policy
  • Resources
    • 2020 Chargeback Representment Guide for Merchants
    • 2020 Vendor Guide
    • 3 Ways a Unified Chargeback Management and Fraud Platform Increases Revenue
    • Addressing Payment Fraud and the Customer Experience in 2022
    • Associations and Non-Profits
    • ATO Fraud In Retail Report
    • Balancing Customer Experience and Fraud Prevention: What’s the Secret?
    • Chargebacks Consumer Survey Report 2022
    • Digital Trust & Safety: Combating the Evolving Complexities of Payment Fraud
    • eCommerce Fraud Reports
    • eCommerce Fraud Webinars
    • Fraud Prevention Tactics that Enable Exceptional Customer Experiences
    • Fraud Prevention Training and Certifications
    • How to Build a Recession Proof Chargeback Prevention Strategy
    • How to Stop Fraud During the 2022 Holiday Season
    • Jobs Board
    • Merchant Fraud Journal 2023 Fraud Trends Report
    • Merchant Fraud Journal’s Fraud Trends 2020 Report
    • Merchant Fraud Journal’s Fraud Trends 2021 Report
    • Merchant Fraud Journal’s Fraud Trends 2022 Report
    • MFJ’s 2022 Customer Experience Report
    • Podcasts
    • Prevent High-Velocity Fraud Attacks During the 2021 Holiday Season
    • Stopping Fraud Across the Customer Lifecycle
    • Vendor Directory
    • Webinar – Addressing Payment Fraud and the Customer Experience in 2022
    • Webinar – Mitigating Fraud and Risk on the ACH Network
    • Win January Chargeback Disputes
  • Subscribed
  • Terms and Conditions

© 2021 Payments Media Solutions Canada Inc.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?