In the card-not-present environment, merchant misrepresentation has become one of the most dangerous—and costly—threats for Payfacs. What today looks like a T-shirt store, tomorrow could be processing prohibited or high-risk goods payments.

The shift from onboarding to oversight

While rapid onboarding drives growth, it also creates blind spots. Some merchants intentionally misclassify their business or pivot after approval, selling high-risk or prohibited goods under false MCCs. Others serve as fronts for laundering schemes or fraud rings.

Unfortunately, when things go wrong—when the chargebacks spike or card brands raise flags—it’s the Payfac that’s left to deal with the fallout: financial loss, regulatory scrutiny, and reputational damage.

Hidden risk in plain sight

Here are a few signs of evolving or concealed merchant risk:

• MCC (Merchant Category Code) mismatches between declared activity and actual transactions
• Sudden shifts in descriptors that could confuse cardholders or hide product types
• Transaction behavior anomalies, including unusual ticket sizes, volume spikes, or odd geographies

These signals often surface too late, after disputes, not before.

Why static risk models fall short

Traditional onboarding checks aren’t enough. Static underwriting doesn’t catch changes made post-approval. What’s needed is an always-on, adaptive layer of risk intelligence that goes beyond checklists and into real-time behavioral analysis.

The future of risk monitoring for Payfacs

Modern risk management for Payfacs should include:

✅ MCC consistency checks to validate merchant-reported categories against real-world behavior

✅ Dynamic descriptor monitoring to catch shifts that could signal misrepresentation or fraud

✅ Behavioral profiling that maps merchant activity over time and flags abnormal patterns instantly

✅ Integrated rules engines to automate responses and stop high-risk processing in real time

Speed to market is good. But speed to detection is what protects your bottom line—and your reputation.

Maksu’s approach: Real-time risk infrastructure

At Maksu, we’re building a next-generation PSP infrastructure.

Our online payment processing platform combines:

✅ Real-time risk detection

✅ Smart orchestration and adaptive rule logic

✅ Frictionless, compliant onboarding and checkout

✅ Infrastructure built to support growth without blind spots

Want to hear more about Maksu? Let’s talk.