It goes without saying that the pandemic dramatically changed the payment processing industry due to a lack of in-person payment methods. If you didn’t have a strategy in place for pivoting to online payments, the pandemic likely meant some hardships to your business.
The fact remains that plastic is the future. Look no further than the fact that five countries will launch initiatives to go cashless by 2023. As a result, global cash circulation will be greatly reduced by 2024, according to Gartner.
The new normal
As a significant number of consumer purchases occur online, contactless digital payments are dominating the business world. While that’s a trend that’s here to stay, the future of payment processing, in general, is always in flux. However, we’re here to help you cut through the noise and focus on strategies that will help your business in the long term.
Here are a few ideas for moving forward:
Develop a chargeback strategy
Unfortunately, with the increase in digital shopping comes an increase in chargebacks. We can help you develop the right strategy to get in front of potential threats and reduce the likelihood of chargebacks.
One idea? Be sure your refund policy is clear and concise. Always take care of chargebacks before the credit card company does. Remember: you have to lobby for your case in these situations because the customer gets the benefit of the doubt in the eyes of the credit card company.
Prioritize fraud detection
In order to prevent fraud, you must understand what it looks like in the first place. Below are some of the most common payment fraud schemes and how they can affect your business.
This is the most common kind of payment fraud and related schemes. Your payment processor should have measures in place to detect this threat as well as protect your customers from it happening in the first place.
Credit card tumbling
In this case, identity thieves randomly generate credit card numbers and use online transaction forms to test out the numbers. Your business could be targeted and you’d have to address dozens, or even hundreds, of fraudulent charges.
Equally as concerning as the other schemes, this one involves fraudsters taking a stolen credit card and making a purchase with it. Then, they’ll make a request to cancel the transaction by making a call to their victim’s financial institution posing as them. The end game is to collect the refund from their victim’s account. As a result, your business could be hit with fees.
With the rise in digital payments, you may also experience more fraud. As technology advances, the incidents will likely decrease. However, in the meantime it’s critical you have a fraud detection strategy in place. At the very least, experts suggest updating security measures regularly and proactively automating the process.
Keep the payment process seamless
Payment processing should feel intuitive and seamless to your customers. That does require work on the front end on your part. For instance, you’ll need to create a portal that allows customers to create an account that facilities recurring payments. If the process is too complicated or obtuse, chances are good your customer will abandon their cart and possibly patronize your competition. Yikes!
One specific tip: When designing a customer portal, take care to eliminate all distractions. Don’t include ads or flashy banners that will divert customer attention away from your business.
Get to know AI
AI, or artificial intelligence, will play a major role in payment processing in the not-so-distant future. AI is a boon to the industry because it mimics human behaviors and cognitions and has the power to detect and limit fraud. Human error is the biggest pain point of payment processing. By addressing this factor, businesses can save time and money on matters related to problem-solving.
Manage and leverage data
Every online transaction comes with valuable data that can help you better understand who your customers are and their shopping habits. When you have certain data points collected and organized, certain patterns will emerge that you can use to better target your customer base. Too, certain trends can help you identify potentially fraudulent transactions. Have a plan in place to make the most of these insights.
Look to the experts
As a business owner, you’re an expert in your domain but perhaps not in payment processing hardware or software. Sometimes when your system declines a payment, the problem is on your end. For instance, an obsolete payment processing system may not be able to handle a new card. There are other situations that will result in a rejected payment because of old infrastructure. By keeping your system current you can position yourself to take more payments and maximize your profits.