When comparing the cost of handling chargebacks, spending time and money defending them, and dealing with the implications of a high chargeback rate, you may discover that investment in a chargeback solution is worthwhile.
To achieve sustainability, you must develop a long-term, proactive risk mitigation strategy.
This service helps by alerting you of ongoing conflicts and offering you the opportunity to address the issue. To keep chargebacks under control, high-risk merchants increasingly frequently use early warning systems. You reduce chargebacks by up to half with this service.
Companies that have partnered with certain credit card companies offer these chargeback notifications. If you sign up for this service, you’ll receive a notification when a consumer contacts the issuing bank to contest a transfer.
You then have a 24-hour window to act before the disagreement becomes a chargeback. You have two options: either get an immediate refund to avoid a chargeback or do nothing and accept the chargeback.
Managing and contesting chargebacks can be a pain. You can save money by outsourcing chargeback management to a company that specializes in chargeback mitigation services.
This service permits the card issuers and merchants to coordinate on time to prevent friendly fraud. An intelligent merchant early-warning system gives you more choices for solving issues before escalating into chargebacks.
Friendly frauds make up 50%-80% of all chargebacks; their basis is in unethical and unreasonable consumer conduct, such as misunderstandings, confusion, carelessness, or a cardholder’s choice to deal with their bank rather than the merchant. Giving the customer information about the charge is a standard way to resolve such disputes.
For example, in case of a shipping delay, the customer can dispute a charge assuming that the merchant has taken their cash and vanished; through chargeback deflection service, the issuer can share this information with their customers, leading to fewer chargebacks.
Deflecting a chargeback demands a more technical interface than other methods of chargeback mitigation, but it is a cost-friendly and preventive strategy to minimize friendly fraud chargebacks.
This service involves a payment processor screening transactions for probable fraud indications using risk scoring machine learning and other ways. The payment processor will reimburse the fees if a merchant receives a later chargeback on one of these transactions.
Chargeback guarantees have some conditions, such as covering just particular chargeback codes or only charging up to a specific price level. They may also include restrictions, such as delivery confirmation, that you have to meet before the processor guarantees the transaction.
Guaranteed chargeback often drives up your cost per transaction, either through an extra fee on each purchase or because the payment system which offers the guarantee has a higher transaction price.
Artificial intelligence allows banks to detect fraud more accurately while reducing false alarms. The system works by analyzing each customer’s typical payment behavior and identifying suspicious transactions that are out of the ordinary using behavioral risk models.
It puts all aspects of a card holder’s transactions together, such as date, user location, product, value, the supplier, and customer behavior profiles.
Benefits of AI Fraud Protection Services
Industry experience. Do they have a proven track record in the payments processing industry? Check out reviews on the company from neutral third-party sources as well as current customers.
They are tailored to your industry. Every business has different needs depending on the industry. It’s critical to choose a payments provider with experience in your line of business so they can advise you on payment solutions that are the best fit and can help you grow.
Commitment to data security. Data security should always be a top priority. Tools that help you detect and protect against fraud by securing card data are essential. These offerings should be integrated with your processing if possible. And, in the case of many small businesses, security tools should be bundled simply and smartly to take the work off of you and your business.
Customer support. You may need support and training when you’re getting up and running, when systems change, and at any other time you may need help. Look for a processor that offers live 24/7 customer support to help keep your business running at all times.
There will always be some degree of risk associated with handling and transmitting sensitive data, so processing credit cards with a reputable payment processor is vital. Above and beyond securing your computers, terminals, and networks, there are several additional security measures you can implement to boost your security. A reputable payment processor can discuss your options in detail.
Most types of merchant businesses qualify for a merchant account. The application process may vary depending on your business type and the associated risk assigned by credit card networks.
The cost of accepting credit cards varies greatly. When you sign a contract with your payment processor, make sure you pay attention to how and what fees will be assessed. You’ll likely be responsible for interchange fees assessed by the card networks, various processing fees, and other additional fees depending on the services offered. Make sure you understand the fees you’ll be assessed before you sign your contract. And, ask questions. You may be able to negotiable a lower rate.
At the minimum, you should set up your business to accept traditional magnetic stripe cards, EMV chip cards, and eWallets. It would also be best to consider whether you need to accept payments on the go, online or over the phone. Depending on your customer base, you may also want to consider accepting secure check payments.
There are many options in POS terminals. The type of terminal you select depends mainly upon the payments options you want to accept and where and how you need to accept those payments. For example, if you only accept payments from a physical location, a countertop model may be the best option. On the other hand, if you accept payments offsite, such as trade shows, festivals or farmers’ markets, a mobile POS system may be the way to go. For phone payments, you may want to discuss a virtual terminal.
The answer to this question depends on various factors, including your agreement with your merchant processing services provider, how often you send your authorized transactions for settlement, and the financial institution you use. Make sure you understand this timeline at your contract signing so that you aren’t caught low on funds. Today, there are faster paths to funding than ever before.
There is a lot of variation here. Chances are if you’re a small business with only one location and a terminal, this process will be a bit quicker. However, if you’re a larger business with many locations and terminals, your ramp-up time may take longer. Also, you may be able to set up payment processing more quickly if you choose a mobile processing application versus a traditional countertop POS system.
Knowing that your payments processor is there to support you 24/7 is critical to the success of your business. For example, if your POS system or network goes down during a peak business time, you can’t afford to miss out on those sales. So make sure you understand how much support a processor provides before you sign your processing contract.
Some processing contracts include an “early termination” clause, and some do not. In some cases, you may be assessed a fee if you end your agreement early, while other processors may waive such fees. If you think there’s a chance that you’ll need to end your credit card processing early, make sure you check the contract carefully before you lock into an agreement.