Preventing Costly Chargeback Charges
Credit card chargebacks can be very troublesome for a business, especially one that is newer. A chargeback often results in funds being reversed, even if products have already been shipped or services have already been completed. A chargeback often occurs when a banking institution claims that a transaction is unsafe. It may be a legitimate chargeback, resulting in a stolen credit card or it may be to protect the consumer. Either way, a business needs to take the necessary precautions to prevent chargebacks from occurring.
Utilize a trusted third part payment processor. Many new businesses make the mistake of using a cheap or free payment processor. They may do this to save funds, but it can actually result in costing you more. Cheaper credit card processing programs are not as secure. They do not protect the customer?s information in the same way. They also can result in much higher rates of card not present chargebacks, resulting in lost profits for the business,
A cheap or poorly working credit processing system may also deter customers from purchasing items from a webpage. They are likely to choose another business for their products or services if the checkout process is not trusted. In 2014, there were $16.31 billion worldwide fraud losses from payment card fraud. Customers who have had have their credit card information previously are even more likely to choose checkout programs carefully.
Keep in touch with customers. Customers feel more secure about their online purchases when they have personally communicated with the business owner. Otherwise, they may question the authenticity of the business and if it is actually a real business. However, if they actually have the opportunity to contact the business owner or a customer support team, they are more likely to make a purchase. They are also more likely to approve the transaction should a chargeback protection occur.
Offer multiple forms of payment. Some customers are not comfortable with providing their credit card information over the internet, regardless of how safe the credit processing system is. Offering customers a variety of payment methods can increase their trust with a business, and can increase the number of customers willing to work with your business.
Approximately 82% of American Express card members and 79% of Visa and MasterCard card holders agree that regardless of the natural of the business, merchants should offer customers as wide an array of payment vehicles as possible. Also, chargeback protection is not needed for other types of payment, which can improve the finances of an online business.
Be mobile friendly. More and more customers are relying on their cell phones for internet usage. The same privacy that you utilize for your internet users needs to translate into mobile use, as well. The checkout process for mobile should also be just as simply as if the customer were using a desktop computer. Customers who choose to make a payment on a mobile device also tend to prefer to have their information saved, making a secure checkout process even more important.
Outsource credit card processing needs. Smaller businesses may struggle with providing the level of security they need to. It can be beneficial to outsource the credit card processing system to ensure that it is both safe and secure. It reduces the amount of chargeback protections that occur and helps to reduce card not present fraud prevention during the card not present transaction.
The most secure apps use data encryption techniques. The max is a 256 bit encryption which is difficult even for the most able hackers. Having the highest level of bit encryption is important to prevent chargeback protection. However, most businesses are not able to reach this high of encryption without outsourcing their credit card processing needs.
The internet is an exceedingly popular tool for shopping today. In fact, many businesses operate successfully solely on the internet. However, there is more risk with internet shopping and credit card theft. A business needs to take the necessary steps to reduce the amount of card transaction chargebacks they get, both for the privacy of the customer and the profits of the business.