When people talk about ‘high risk merchants‘ they naturally assume online gambling, adult entertainment, and weapons merchants. In any case, high risk merchants come in all shapes and sizes, from aircraft and jet charters, antique sellers to moving and transportation bearers. The main things they truly share, are intense terms and high rates for their monetary transactions.
If your business is viewed as high risk by banks and credit card organizations, it can make payments a genuine agony. Customers payments will probably be hinder as ‘false positives’, it can be very difficult to open merchant accounts with best retail banks, and credit chargebacks are all too common. It is imperative for all retailers to find a way to lessen the risk of costly payment chargebacks to build their ROI and enhance the odds of arranging a superior transaction fee from a bank or payments processor.
One of the main reason behind affirmed chargebacks is the use of unclear billing descriptors – the organization data which appears on a shopper’s credit card statement. On the off chance that clients who bought items online can’t rapidly and effectively recognize the billing descriptor as having a place with your organization, their automatic response is to consider their bank and put a stop on the payment.
So what impact do wrong or unclear descriptors have, and in what capacity can organizations find a way to protect themselves?
For what reason are unclear descriptors costing your organization cash?
A billing descriptor is a form in which an organization’s name shows up on a credit card statement and is for the most part set when a retailer opens a merchant account. The descriptor is utilized by the client to distinguish who a payment was made to for a specific transaction. The name used is generally the trading name of the business with the goal that it is effortlessly recognizable by the client or a dynamic descriptor which incorporates the name of the service or product sold.
Choosing a reasonable billing descriptor is essential for a merchant to avoid chargebacks. As per our information from a huge number of chargeback cases, unclear descriptors are one of the main reason for an increase in chargebacks by up to 25 percent, since clients can’t distinguish the merchant, and immediately accept the charge must be invalid or because of fraud.
At the point when a chargeback occurs, merchants lose almost double the transaction amount while considering the item cost, marketing cost, fulfillment cost, transaction cost, and chargeback fees. The procedure to claim chargebacks is confusing, tedious and merchants win only 21 percent of disputes.
Wrong descriptors can likewise spike transaction decline rates by as much as 10 percent. On the off chance that an organization gets a high volume of chargebacks – in excess of 1 percent of transactions – a bank or payment carrier will probably decline payments in ‘false positive’ cases, trying to reduce online fraud. At the point when organizations fix their descriptors and make them all the more obvious to customers, our analysis shows a drop in decline rates by as much as 2 percent.
But aside from costing organizations money in chargebacks and payment declines, ambiguous descriptors can at last influence brand trust with shoppers. The internet gives another level of straightforwardness for clients, who can leave remarks and reviews on sites, for example, Trustpilot and Yelp, which are promptly accessible for many other potential purchasers to see.
In the event that a business has so many declined payments, substantial chargebacks or cases of online fraud, it expands the odds of having their ‘dirty washing aired in public’ with negative feedback and reviews, which thusly could dismiss potential clients from utilizing a service and push them into the inviting arms of competitors.
How can retailers reduce the risk due to Wrong Billing Descriptors?
When you get chargebacks on regular basis, time is of the quintessence and organizations should contact their bank or payment processor immediately. Here are some simple steps which retailers should take to reduce damage and lost custom:
- Co-ordinate with your processor/bank to change your descriptor so clients can easily identify the product, organization or service they decided on. Numerous organizations wrongly use the name their business is enlisted under, rather than its business name, yet this can confuse consumers. It is best to use the most commonly known name for your business, or the name of the item, so it is effortlessly to remember for customers.
- Do a test transaction and perceive how the descriptors show up in your credit card statement. It is in every case preferable to be safe than sorry, so it is a smart thought to process a payment utilizing an organization card and afterward check the online banking service to confirm the new billing name is clear and brief when appeared on a purchaser’s bank records.
- Make a request to your processor to incorporate your phone number, organization name, and address in the second detail of the descriptor. Most of the organizations use these dynamic billing descriptors which offer more details. While not all banks and payment bearers may permit this, is it always worth asking.
- Make sure that your descriptors are searchable in Google. If not, register a domain in the descriptor name. Organizations should then incorporate the new domain name on their items and website landing page. Organizations who need to go the extra mile can likewise embrace SEO strategies with the goal that their site is noticeable on a Google search.
Credit card chargebacks have increased by in excess of 20 percent in the recent year, and are evaluated to have cost retailer $5.8 billion of every 2016. These charges are hitting smaller merchants – both offline retailers and E-retailers – – the hardest, which are directly influencing their primary concerns. It is up to retailers to make all of the necessary actions in their capacity, to make the payments procedure as clear, and straightforward for shoppers as could be allowed, to diminish chargebacks and enable their business to develop.
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.