Online credit card payments comprise a routine part of daily life these days, especially for those in business. They’re so routine, in fact, that too many merchants take them for granted. It all seems so easy, so automatic. Well, it’s supposed to be that way, but there’s a lot going on behind the scenes.
Fraud, chargebacks, failed payment attempts and angered customers are all among the potential problems that might crop up. The best thing for you to do as a merchant is to set things up so that these headaches are minimized and made as unlikely to occur as they possibly can be.
What follows are some core elements in making online credit card payment processes smooth, simple, and error-free. You might be making use of these methodologies already, but there may be something here that you’ve been overlooking, too, especially if you’re a newer merchant or new to accepting online payments.
Have your payment terms clearly spelled out on your payments page.
Don’t leave clarity to chance, and don’t merely presume lack of confusion on a buyer’s part. Even the font that you’re using on the payments page should be relatively big, perhaps even bold, so that your terms and conditions are easily read. Refund and exchange policies need to be disclosed. A contact link with company details needs to be provided.
Furthermore, if what is being purchased requires recurring payments, this fact needs to be clearly stated at checkout. E-Complish’s RecurPay securely manages recurrent billing for merchants who offer ongoing service contracts or financing options. Features like customized automated email confirmations for clients and daily transaction reporting are designed to take the hassle out of monthly or annual billing and keep records updated and accessible.
Read your own merchant agreement contract carefully and in full, including its fine print
If you retain a lawyer, have him go over it, too. Don’t just skim over your merchant agreement or merely assume what’s in it. Remember that this document spells out your rules and responsibilities regarding your payments service provider. Everything about how you authorize, accept, process, and settle your credit card payments is found herein. Fee schedules and amounts are also disclosed, as are the terms by which you may renew or cancel the contract. None of this is stuff that you want to be blind about.
Make use of fraud detection tools
One of the automated fraud detection processes that you may want to consider setting up is location screening. This will automatically reject a payment if there’s a discrepancy between the billing and shipping addresses. Sometimes, these are legitimate transactions (someone has a PO box, someone wants a package sent to their office instead of their house, someone is sending something as a gift, etc), but many times this will thwart a fraudulent transaction. For the legitimate transactions with differing addresses, you’ll want to set up a way for the buyer to prove legitimacy; few frauds are going to go through that verification process. You’ll also want to automate the verifying of the card’s address and its CVV/CID number.
Settle batches daily
This is a common practice for experienced online merchants, but one that gets overlooked by newer ones. It goes without saying that before you can be paid on your credit card transactions, you have to settle a day’s batch. While batches can be settled more frequently than once per day, there is a charge from the bank or credit issuer behind the card for every batch, so it makes the most sense to automate having a daily batch settled at the same time once each day or evening.
Getting settlements on batch payments is not as easy as it seems, as authorization codes and bank sorting by payment processors are involved. At E-Complish, we developed BatchPay to allow users to upload numerous individual transactions with one easy step. This reduces fees and minimizes delays that may result in charge disputes.
Keep your credit card payment database user-friendly
If payment disputes or potential chargebacks arise, the last thing that your customer service personnel need is to have to sift through dense, complicated sets of transaction and customer information. Delays in reaching resolutions and confusion on both ends are likely to result, making nobody happy and making customers angry. Angered customers often don’t come back and may contribute by word of mouth to the downgrading of a business’ reputation.
Learn from your chargebacks
Simply getting upset about and mindlessly issuing chargebacks isn’t in anyone’s best interests. You need to make it a point to learn from the experience. Is there some systemic problem going on that keeps making chargebacks happen, or which could cause them to repeat? If it was truly an isolated problem with just one particular transaction, what caused that problem? Was there any way in which the chargeback could have been prevented from needing to go through by way of resolution? Was the customer satisfied in the end such that he might still come back and do more business with you?
It’s our hope that these core best practices for processing online credit card transactions will be used to help you out in your business, preventing fraud, chargebacks, and other tangled problems associated with the process of authorizing and settling online card payments. It’s hard to be “too careful” with handling them.