3 Online Payment Processing Challenges Your Business Should Know
Thanks to advancements in payment technology and online payments platforms, accepting credit card payments online has never been easier. Many of these popular online payments solutions allow business owners to seamlessly integrate and take advantage of the rise in online shopping. While accepting payments online is definitely an advantage for business owners, it does have it’s set of challenges. Here are three online payment processing challenges that you should be aware of for 2017.
Despite increases in payment security, credit card fraud has been steadily increasing worldwide. It’s estimated that in 2015, the United States quoted fraud losses at more than $8 billion. As new technological advancements attempt to address these trends in fraud, new kinds of fraud surface to combat the security measures. It’s imperative that your business takes adequate measures in securing customer information and reducing fraud.
A great way to mitigate the chances of fraudulent activity is to choose a reputable payments provider that has systems already in place to reduce fraud. Most payments companies will have entire departments that check for fraudulent activity. Take the time to research what security measures are taken and how you can work with your payments provider to keep transactions legitimate.
Chargebacks are a business owner’s worst nightmare. Chargebacks can potentially add huge costs and can severely damage customer confidence. Not only that, chargebacks can put you out of business.
Make sure you’re doing everything in your power to reduce chargebacks. Here are some strategies you can use:
- Use Address Verification System (AVS). AVS checks to see if the cardholder’s billing address matches the address entered in the order form. Merchants should be extremely cautious of orders using different addresses.
- Always require CVC2 and CVV2 Verification Numbers. It’s estimated that these will reduce chargebacks by about 26%. The majority of processors will support this option.
- Respond to inquiries and support tickets ASAP. If you take too long to respond to a customer complaint, they may just issue a chargeback. Make sure your support staff is well trained and readily available.
- Use a clear and familiar descriptor. Make sure your descriptor is clear on your customer’s credit card statement.
The majority of large businesses take online payment processing as an ordinary part of doing business. That being said, they will typically set aside a hefty budget to make sure it’s done right. The technology needed to accept online payments can get a bit complex and the integration can get quite expensive.
For smaller business owners, a complex integration may be the nail in the coffin when looking to accept online payments. However, many of the top payments companies will offer public API’s that allow you to easily integrate with their payment technology. If you built your online store using WordPress you can take advantage of a plethora of shopping cart plugin’s that allow any business owner, tech savvy or not, to integrate with a payment processor.
For any business owner, it’s important that you take the time to fully understand the online payment processing landscape. Just as it can greatly benefit your business, it can severely hurt it as well. Make sure you take note of these three challenges associated with online payments so you can grow your business!