Online business is a fast growing industry, online merchants and consumers expect that the buying and selling experience should be easy, safe and efficient. With the ongoing technological advancements in the online retail industry with international payment options, mobile payments, wallets and payments security, there are still challenges in online payments like fraud and chargebacks are the two most common challenges that impact businesses of all sizes around the world. E-commerce transactions trigger the chain of complex automated processes that bank and payment processors took care off. Also, innovative advances in e-wallets, multi-currency electronic payments, demand for cross-border, and shifting purchase patterns have fueled PSP competition in order to increase its market share. New technologies have effectively improved and smoothed business-to-business and business-to-customer experiences with e-wallets and mobile payments.
Due to social media and easily scalable global platforms and services, it became very easier for global brands and even small and medium-sized merchants to enter to e-commerce. Finding and reaching potential clients has never been simpler. At the same time, risks from cyber hacking, fraud and oppressive charges, keep increasing.
Here are some of the payment challenges that make it hard for businesses to accept online payments and we have added some tips on how to quickly overcome them.
The merchants and consumers experiences in Cross-border transactions are not always up to their expectations because these transactions can be slow, expensive, inefficient, and can create difficulties regarding language barriers, conflicting banking infrastructures, currency exchange, payment, and technology standards but they play an important role in global trade. When you are selling products and services internationally, it’s very important for your business to deal in currencies preferred by your customers and the same case with payment methods. I order to meet these expectations you need to open new bank accounts, new business entities, and new regulatory hurdles in each national market. You will also need to be able to adjust quickly for varying trade rates and adhere to international taxes, tariffs, and charges.
National banking infrastructures can’t deal with cross-border payments, resulting in an autonomous and non-uniform improvement in technologies and software platforms that convoluted or slow down cross-border transactions. New changes are beginning to shape cross-border payment requirements:
- Government-drove activities and orders will begin to regulate payments and fees
- Developing transnational systems will diminish dependence on correspondent networks
- Payment systems will oversee costs, credit risk and liquidity more effectively
- Multinationals will accomplish economies of scale, with a side advantage of consolidating credit risk
- Outsourcing will increase processing productivity and drive down expenses
CARD DATA SECURITY
Taking care of online payments requires consistency with legal guidelines. For example, a PCI DSS compliance certification is required by card brands, such as Visa, MasterCard, and Discover. The certification should be renewed every year and accomplish a passing score, which depends on an arrangement of very stringent criteria. A quarterly scan by an approved scanning vendor is mandatory, if your business stores cardholder electronically stores cardholder information or if your processing systems have any Internet connectivity. Any non-compliance could convey the potential for fines and punishments. PCI DSS standards require merchants and processors to meet 12 criteria across six security fields:
- Build and maintain a protected system and frameworks
- Ensure cardholder information
- Maintain a vulnerability management program
- Execute strong access control measures
- Regularly monitor and test networks
- Maintain an information security policy
Recent healthcare, retail, and government security breaches underscore what every trader knows: client and card information security is the top priority. Preventing online payment security issues is an absolute necessity for anybody doing business online. This should be possible by either obtaining PCI DSS Level 1 accreditation or utilizing a PSP-hosted payment page.
FRAUD AND CHARGEBACKS
The transactions involved in the online business are always “card-not-present” transactions. As the online business grows, the chances for fraudulent misuse of payment networks and data theft grow right alongside. Fraudsters are continually searching for new vulnerabilities. If your business acknowledges a fake payment online, you could end up being considered financially charged for that loss. There is no chance to have extra protective measures in place. Indeed, even the slightest hint of a security breach or cyber attack will badly affect your reputation and as a result, you may lose your clients. Fraud-monitoring tools such as the validation services, customer account, and purchase tracking, a certified Level 1 PCI DSS payment processor’s risk management staff can sniff out fraud before it occurs.
Chargebacks are there to simply protect customers against unusual transactions, but on the other hand, they have serious financial repercussions for e-commerce merchants. In many cases, chargebacks, where credit card issuers return funds to consumers who oppose a particular transaction’s authenticity, can have long-lasting effects on an e-commerce merchant’s reputation and credit score, and a large number of chargebacks can get your merchant account closed, effectively killing the business. Chargebacks can be controlled by the use of effective customer service practices and merchant accessibility, can substantially reduce or eliminate chargebacks.
New innovations, for example, EMV and fingerprint recognition are additionally being utilized by PSPs to reduce fraud and chargebacks.
Advanced EMV technology is utilized to approve that a payment card is genuine and encourage the approval of the transaction. At the point when an installment is made in-store, the card is inserted into a compatible card reader, the EMV chip is read, and data is exchanged in a very secure way, utilizing encryption.
Obviously, when making an online payment, the purchaser physically enters card data, so the chip seems to have no advantage. In any case, EMV still gives an indirect security advantage to online payments. In the occasion that card data is stolen on the web, it’s significantly harder for fraudsters to clone and utilize a card with an embedded EMV chip.
Customers are ending up progressively comfortable with biometric identification, for example, fingerprint recognition, which is frequently used to unlock phones. It is now being introduced to increase mobile payment security and prevent fraud. Amid the mobile payment process, the purchaser just sweeps their fingerprint utilizing a perfect cell phone, to prove their identity. This is a powerful tool for fraud prevention, as it guarantees the individual performing the transaction is truly authorized to do so.
While a secret word or PIN code can be stolen or guessed, fingerprint data requires the purchaser’s physical presence. This innovation is as of now being executed by Google Play, permitting users of Android phones with worked in unique finger impression scanners to validate Google Play buys utilizing their fingerprints.
ACQUIRING A MERCHANT ACCOUNT & PAYMENT GATEWAY
Merchant Account and Payment gateway are the two components that allow businesses to acknowledge online payments. Once a customer submits their payment on a checkout page, Payment gateway authorizes the transfer of funds between buyers and sellers. Yet, with a specific end goal to process transactions using a payment gateway, a merchant account is required.
Charge card-affiliated payment processors, while more secure, can be costly for online retailers. Added to the cost is the lack of interface between processing systems—it might be troublesome or unimaginable for a PSP to connect with different frameworks, resulting in processing and payment delays, lost transactions, and expensive fees.
In true real-time processing, a combination of features, including integrated systems and gateways, addresses liquidity issues and minimizes delays, while saving online transaction integrity. A payment processor that accommodates prompt and independently processed transactions can open customer accounts in excess of one acquiring bank, thus avoiding the delays often inherent in automated clearinghouse processes.
If you are looking for a reliable merchant account provider, you are in the right place, as IPAYTOTAL provides the best solutions for e-commerce businesses. We guaranty quick real-time credit card processing, top-notch services and at reasonable rates. Give us a call at +44 800 776 5988 or get in touch with us through our website.