How can monitoring the percentage of keyed transactions assist in evaluating a merchant's status?

Monitoring the percentage of keyed transactions is crucial for evaluating a merchant's status, particularly because it can indicate possible fraud or shifts in their business model. Keyed transactions occur when a cardholder's information is manually entered into a system rather than being processed through more secure methods, such as chip or contactless payments. A high percentage of keyed transactions may signal a higher risk of fraud, as this type of transaction is often less secure than those using EMV chip technology.

Additionally, a significant increase in keyed transactions could suggest a shift in the merchant's business model, which may require further investigation. For example, if a merchant typically relies on in-person payments and starts recording more keyed transactions, it might imply they are facing operational challenges, such as equipment issues or evolving customer payment preferences. Thus, monitoring this percentage provides valuable insights into the merchant's operations and risk management strategies.

In contrast, the other options do not accurately reflect the implications of keyed transactions; they focus on aspects like transaction confirmation or customer loyalty, which are not directly assessed through the percentage of keyed transactions.