For many businesses, payment processing is like a utility – you flip the switch and expect transactions to flow. Until one day, a freeze hits or a spike in chargebacks threatens your merchant account, and suddenly your cash flow is in jeopardy. Payment risk mitigation isn’t the sexiest topic, but as Jed Morley often says, it can make the difference between life and death for a growing business.
Morley, the CEO of Platinum Payment Systems, has guided companies through the minefields of frozen accounts, high-risk processing, and fraud surges. His playbook for managing these risks provides a blueprint for any business that can’t afford downtime in revenue (which is to say, every business).
In this article, we’ll outline Morley’s top strategies to keep your payment processing stable and secure, even during turbulent times. Whether you’re scaling rapidly, operating in a high-risk industry, or just want peace of mind, these insights on backups, compliance, and proactive management will help ensure your ability to accept payments is never in doubt.
The Fallout of Frozen Accounts (and How to Prevent Them)
Imagine waking up to find your payment provider has frozen your account – funds on hold, sales unable to process. This nightmare can happen if algorithms detect what they consider risky activity.
Jed Morley explains, “Payment processors, such as PayPal and Stripe… have protocols and algorithms to identify and manage risk. Since they lack insight into your business, they must rely on these systems, which aren’t always tailored to your needs.” Suspicious activity, a surge in chargebacks, or being labeled “high-risk” can all trigger a freeze.
Morley has a simple but vital piece of advice: communicate and plan ahead. “If your business anticipates significant sales volume increase or a major shift in business model, notifying your payment processor in advance can prevent misunderstandings that might trigger suspicions about your account’s activity.”
In practice, this might mean telling your processor about an upcoming holiday sale or product launch that will spike volume, so their risk systems don’t panic.
Another key tip is to maintain a low chargeback ratio. “Chargebacks can be a sign of poor business practices or potential fraud, so keeping them to a minimum will help keep your account in good standing,” Morley notes. He suggests implementing clear refund policies, excellent customer service, and swift dispute resolution to avoid customers going to the bank for chargebacks.
Essentially, solve problems directly with the customer whenever possible. Morley’s rule of thumb: “Ensure that resolving the issue with you is more convenient than resorting to their bank.
Now, what if despite best efforts, you still get that dreaded email from a processor? Morley would likely counsel having a backup plan ready – which leads us to the next section.
Diversification: Don’t Put All Payments in One Basket
Jed Morley is a big proponent of multiple processing relationships as an insurance policy. “Having a backup payment processing solution is a crucial consideration for businesses of all sizes,” he says.
Why? If one provider goes down (technically or by freezing you), you can quickly switch to another and continue operating. This is particularly important for online businesses that can’t afford any checkout downtime.
Morley practices what he preaches. At PlatPay, they have “over 50 banks and processing relationships to handle every type of business,” ensuring they can route transactions through different channels if needed. He advises merchants to similarly “identify a secondary processor that complements your primary one, offering benefits or features that your primary might lack.”
For example, you might use a mainstream processor for everyday low-risk transactions, but have a high-risk specialist on standby for certain products or international sales.
He also highlights another benefit of diversification: catering to customer preferences. “Different customers have different payment preferences, and offering multiple options can help increase sales and satisfaction,” Morley says.
So a backup isn’t just for emergencies; it can also be an alternate method like PayPal, Apple Pay, or ACH that some customers might favor.
Of course, managing multiple processors means more overhead in reconciliation and compliance. But the cost of being entirely offline for payments even a single day could far outweigh those inconveniences.
It’s about risk tolerance – and Morley’s threshold for risk is low when it comes to ensuring clients can get paid consistently.
Real-world tip: Keep at least one additional merchant account open and tested. If your main account has volume limits, distribute some transactions to the backup to keep it warm (and observe its performance). Morley notes that redundancy is pivotal – much like having multiple suppliers for a product, have multiple “suppliers” for your payment capability.
Navigating the High-Risk and Compliance Landscape
Some industries (supplements, subscription boxes, adult, travel, etc.) are labeled “high-risk” by processors due to fraud rates or regulatory issues. Jed Morley actually built PlatPay by serving many high-risk merchants who were underserved by big processors. His experience yields a few crucial pointers:
Find the Right Processor Niche: High-risk merchants often need to work with banks or ISOs that specialize in their industry. Morley has 50+ banking partners for precisely this reason – if one bank won’t underwrite a certain business type, another might. He essentially acts as a matchmaker between merchant profiles and the appropriate banking partner.
Be Transparent and Documented: When onboarding with a new processor, provide thorough and honest documentation about your business. Morley’s team would echo that surprises are what scare underwriters. If you anticipate a certain chargeback rate or have a history, disclose it along with what you’re doing to mitigate it. This builds trust and can prevent sudden holds since the risk is known and managed.
Compliance as a Shield: Regulations like PCI DSS, GDPR, FTC rules, etc., are not optional. “Ensure that your business complies with all relevant financial regulations. Noncompliance can be a red flag for payment processors,” Morley warns. Being proactive on compliance (PCI scans, following card network rules on subscriptions, etc.) not only avoids fines but also gives processors confidence in you. Morley’s approach is to take compliance burden off clients by keeping PlatPay systems updated and guiding clients through their own obligations.
Plan for Expansion: If you suddenly go international or launch new product lines, consider compliance requirements there (VAT, 3D Secure, SCA in Europe, etc.). Morley observed that as businesses grow into new markets, they encounter new rules – so research and prep in advance.
An anecdote: One of Morley’s clients started selling to EU customers from the US and got hit with high declines due to Strong Customer Authentication (SCA) rules. PlatPay helped them implement the necessary 3D Secure verification, which is a compliance fix that also reduced fraud and increased approval rates.
Morley sums it up: “Guarantee a comprehensive grasp of and comply with all relevant regulations to avoid potential pitfalls,” especially when expanding. In simpler terms, know the rules of the game, because regulators and banks won’t accept ignorance as an excuse.
Handling Chargebacks and Fraud Like a Pro
Even with great service, chargebacks happen. Fraudsters may test stolen cards on your site, or customers might dispute legitimate charges. Jed Morley treats chargeback management almost as an art form. He once ran “Merchant Lifeline,” dealing with thousands of disputes, so he’s developed strategies to both prevent and respond to chargebacks.
Prevention – Morley suggests multiple layers of defense:
Use clear billing descriptors so customers recognize charges (avoid their “what is this?” panic).
Implement fraud detection tools – many processors offer basic screening, but consider advanced tools or services if you’re a target. PlatPay leverages machine learning to flag suspicious orders before capture.
Offer easy refunds and have a visible satisfaction guarantee. As Morley notes, sometimes customers charge back because the return process is too hard. Make it simple, and they’ll come to you for a resolution rather than the card issuer.
Response – When a chargeback does occur, speed and thoroughness matter. Morley’s advice:
Dispute when you have evidence. Provide tracking info, proof of service usage, customer correspondence – whatever bolsters your case. Morley’s team often guides businesses in compiling strong rebuttal letters.
Learn from each one. Was there a recurring cause? If friendly fraud (customer lying) becomes an issue, consider adding verification or requiring signature on delivery for high-ticket items.
Use chargeback alerts or mitigation services if volume is high. Morley’s Merchant Lifeline presumably engaged in automated alert systems that notify merchants about impending chargebacks so they can refund the customer first (which can prevent the chargeback from being filed).
Morley puts emphasis on keeping chargeback ratios below critical thresholds (often 1% of transactions or 100 per month, depending on card network rules). If you flirt with those thresholds, even if your sales are booming, you risk processor action.
It’s a strange irony: too much success, if accompanied by proportionally more chargebacks, can sink you.
Morley recounts, “Rapid growth can be exhilarating… but if expectations aren’t clear, a massive sales weekend [could] shut down the company’s ability to process, causing huge losses and stress.” This scenario happened when a business scaled without informing their processor, and when chargebacks rose, they were caught unprepared.
The takeaway: Growth is great, but grow responsibly. Put infrastructure and customer support in place to handle it, or growth can “kill” as Morley bluntly puts it.
Building a Resilient Payment Operation
Jed Morley’s risk mitigation playbook essentially builds a resilient payment operation – one that can take a punch (or a surge) and keep moving.
Summarizing his key points:
Proactive Communication: Always keep your processors in the loop about major changes or spikes. It’s easier to get their blessing beforehand than forgiveness after a freeze.
Backup Processors: Have at least one alternative channel ready. It’s like a spare tire; you hope not to use it, but you’ll be grateful it’s there.
Quality over Rock-Bottom Price: Reliable, knowledgeable processing partners may charge a bit more, but they’ll save your business when trouble hits. Don’t sacrifice stability for slightly cheaper rates. (Morley often wins clients who learned this the hard way from using a big faceless processor.)
Monitor Metrics: Know your chargeback ratio, refund rates, fraud flags, etc. If they trend poorly, act before your processor does. Morley’s team, for instance, provides detailed reporting so merchants can react promptly to issues.
Stay Educated: The payments world changes – new card rules, new fraud tactics, new technologies (e.g., tokenization, AI fraud scoring). Follow blogs, or lean on your processing partner to brief you. As Morley says, staying ahead of changes is part of keeping your business safe.
Perhaps Morley’s most reassuring advice is that you’re not alone in this. Working with a provider like PlatPay means you have an ally. “We’re not just a payment processor; we’re a partner committed to helping businesses navigate the complex world of payment processing,” he emphasizes.
That kind of partnership mindset can be invaluable – because when a crisis hits, you want someone like Jed Morley (who’s seen it all) in your corner, guiding you to a solution.
Takeaways
By implementing Jed Morley’s risk mitigation strategies, you can protect your revenue streams and sleep better at night. Plan for the best but prepare for the worst: have backup processors, keep a vigilant eye on transaction health, and maintain open lines with your providers.
In the event something does go wrong, act swiftly and learn from it. With diversification, compliance, and proactive management, your business can achieve what Morley calls “a stable and reliable payment processing system during periods of rapid growth.” And that stability is a competitive advantage in its own right – it means you can focus on growing your business, confident that the payments will keep flowing no matter what.
About PlatPay
Platinum Payment Systems (PlatPay) is a trusted payment processing partner dedicated to risk mitigation and reliability. Under CEO Jed Morley’s leadership, PlatPay provides businesses with multiple banking channels, advanced fraud protection, and hands-on support to prevent freezes and downtime. From high-risk merchant solutions to chargeback management, PlatPay helps clients navigate the complex payments landscape safely. Secure your revenue with PlatPay – learn more at JedMorley.com.
About PlatPay: PlatPay lets brands track, reduce, and offset payment-related CO₂ in real time. Discover Jed Morley’s ESG philosophy in his ValiantCEO profile.
