A modern business website needs a functional and pleasant interface for your customers that works consistently across a multitude of different devices including PCs, tablets and smartphones.
Take it a step further, and by receiving orders and processing payments via your website, you can streamline your business processes and handle things in a consistent and organised way. While ‘plastic’ is ideal for consumers, card acceptance in eCommerce has become a lot more complicated. For merchants, the responsibility for ongoing security standards compliance, the increasing amount of fraud and data breaches means the burden of proof is placed squarely on the merchant to defend any disputed transactions. Accepting card payments online can produce unexpected headaches for any business owner – even with technologies such as Verified by Visa (VbV) or MasterCard SecureCode designed to ensure the cardholder is the person making the transaction.
Certainly your existing bank would like to provide you with merchant services, providing you meet minimum revenue or turnover requirements and are in a low risk merchant category code (MCC). It’s the ‘easy’ option when starting out. It’s the option most businesses feel compelled to take so that they have one less administration task to manage.
But due to the differences in risk between accepting payments offline (card-present) vs online (card-not-present) it can be difficult for new businesses to qualify for merchant services with their bank. Your business type could also be classified as higher risk which would results in the commercial terms being too restrictive to growth and settlements not meeting your cashflow requirements.
So before you sign an agreement you should consider the following:
– Are there other payment methods you can offer to your customers in addition to cards through this provider?
– Will their solution (payment gateway) work well with your website and display consistently on all the devices your customers may use?
– Even when your bank provides you with merchant services, they may not have the dedicated resources to assist you with the integration to your site or your web design team might not have specific expertise. Consider the potential additional cost implications on web design and development that you may not be prepared for?
– Is it acceptable to you that if you use the same supplier for your business banking and also your payment processing that a payments related issue with could affect your ability to accept payments and have consequences to your business banking also?
If your answers above are ‘No’ or ‘Maybe’, then it could be worth considering a payment processing partner. We’ve deciphered the jargon to explore all options available for your business.
Payments beyond cards
CHAPS, Faster Payments, SEPA (if dealing with European clients) as well as cash options (e.g. voucher issuing and redemption) can integrate to your website to unify the processing of your sales as well as provide alternative options for your customers to pay if they don’t wish to use a payment card. Many of these alternative options provide more security for the merchant with dispute resolution procedures that are more balanced than the cardholder biased chargeback process associated with traditional payment cards.
Options for overseas buyers
When considering international expansion look for a payments partner that has country-specific knowledge of payment methods and is able to present solutions for payment acceptance that would be unavailable with a typical bank’s merchant services offering. Additionally they would be able to offer acceptance in multiple currencies and favourable Foreign Exchange terms.
Mobile point-of-sale (mPOS)
If you have in-person sales the partner should provide a smooth way for you to accept card-present transactions with a mPOS device that can integrate back to your website for order processing. mPOS provides the security of a card present transaction without the rental expenses associated with a traditional POS terminal
Handling sensitive cardholder data
The partner should provide a modern and secure gateway integration method that sends to cardholder to the partners secured payment webpage so that your business is not responsible for handling or storing cardholder payment data which could put your business in breach of payment card industry standards and subject you to fines or non-compliance fees. They can also provide a more hands-on level of integration support. A truly outstanding partner should even be able to offer this in such a way that the cardholder doesn’t even feel like they have been redirected outside of your business website.
Offer options for enhanced anti-fraud measures such as customer location checking, identity validation and fraud alerts from the cardholders banks which allow you to take pre-emptive actions in the event of cardholder disputes.
Up-to-date legal information
Information to keep you appraised of issues relating to the payments industry especially in regards to accounting and tax implication with particular emphasis on cross-border payments handling.
Most PSP’s (Payment Service Providers) will offer some or most of these services. It’s important for you to know your business and what level of risk you anticipate. This will help you to find the right mix of fraud management tools and payment acceptance methods to enable your business to securely process payments online for both you and your customers.
Once you’ve identified a potential payment services provider we’ve identified a few tips to ensure your application is processed smoothly and rapidly. It’s a fantastic exercise to go through in order to create a solid foundation of company documentation that could help you to be more efficient when dealing with contracts and other compliance procedures on behalf of your business.
1. Gather clear and legible copies of all Directors’ Identity documents and proof of home address.
2. Gather clear and legible copies of the company incorporation documents or order a set from Companies House to include in your application packet.
3. Have a business overview prepared or a copy of your business plan ready for review. This should include things like:
– All of your sales methods (e.g. in-person, eCommerce URLs, telephone sales etc.) you intend to use to process payments.
– A process flow of the sales and order fulfilment process.
– A list of your major suppliers including contact details for business references when applicable.
– A Copy of Balance Sheet and P/L statements.
4. The last six months of processing statements from your existing payment services provider or in case of new businesses a sales forecast with some explanation as to how you arrived to your estimation.
5. Your plans for customer service and support online. Explain how you will provide contact points for complaint handling either internally or contracting a call center to manage order processing and customer disputes.
6. Copies of your customer privacy, data usage and refund policies, these will show a payments service provider how you will respond in the cases of both explicit fraud and “friendly” fraud i.e. when a customer knowingly orders products, receives them and then initiates a chargeback with their bank in order to avoid paying for goods or services.
The more information you provide to your payments partner the better as it will help them to reduce your costs as more transparency equates to lower risk factors when performing credit decisions.
When your payments are handled professionally you deliver a better experience to your customers. Make it easy for people to make a payment and they will return to buy again versus a competitor whose payment page doesn’t display properly on a smartphone or tablet!
For more information visit Paymundo.