Entries tagged with “chargebacks”.

It’s a truth that most businesses are likely to balk about: If your company accepts credit cards as payment, you must use a third-party facilitator to complete each transaction. This service often comes at a high price, and small business owners might wonder why they can’t just work directly through the banks to handle this aspect of the company themselves.

Here’s another part to this truth: Not all payment facilitators are created equal. While some payment companies might charge a large fee just to complete a simple transaction, many provide services that a small business simply cannot live without.

The top payment facilitators will offer your business a lot of benefits that have the potential to ultimately help you expand your market and grow your client base. Here, we list eight key advantages to payment facilitators that you may have never considered before:

Flexibility – Many payment facilitators are flexible enough to meet the specific needs of different and unique industries. This flexibility turns to optimization, enabling businesses to lower their transaction costs. In short, having a payment facilitator that knows the business can actually help you save money. This means your customers can reap the benefits through lower costs as well.

Simplification – Quite simply, the use of a payment facilitator will enable you to broaden payment acceptance options, which is vital in this day and age. Customers expect to be able to pay online using their phones and new chip-enabled credit cards, and it’s important for businesses to stay on top of the trends in order to grow. Since it’s nearly impossible for businesses to figure out this technology on their own, they need the assistance of payment facilitators to simplify the process and make it easy to accept any form of payment.

Recordkeeping – Many payment facilitators will let you sync information in other programs, making it easy to do your taxes or manage your accounting. ProPay allows you to import transaction data directly into your QuickBooks account, helping to simplify your bookkeeping and reduce time and resources wasted when entering data twice.

Regulation Compliance – When working with a payment facilitator, they’ll automatically ensure that all regulatory and card brand requirements are met. Since these rules change depending on your business niche and size, it can be difficult for the average business owner to understand all that’s required of them by the government. When you work with ProPay, our early consultation will create a targeted solution that meets the requirements of both your team and the IRS. This includes finding the best possible options for registration, liability, branding, merchant agreements, risk modeling, underwriting, and charge backs.

Other Currency Acceptance – With the right payment facilitator, you can accept payment from clients using foreign currency. Your business will be able to grow in international markets, maximizing your own growth potential and making your products and services marketable anywhere outside the U.S. ProPay offers multi-currency acceptance through a single account, simplifying the process for you. The best part is that funding and reporting are still done in your own currency, making it easy for you to balance the books.

Mobile Apps – Any good payment facilitator will provide you with an app that allows you to accept credit cards anywhere you have data coverage. This is particularly important for businesses that are always on the go, or small businesses that want to set up shop at a farmer’s market or festival. Just capture the customer’s signature at the point of sale and you’re good to go!

Protection from Fraud – When dealing with sensitive cardholder data, it’s always important to employ the best technology to protect your customers. When using the right payment facilitator, you’ll be provided with encryption and tokenization services that keep client information safe. This will help reduce compliance efforts on the part of the small business owner, as they can rest assured that their payment information is securely stored.

Handling Chargebacks – Chargebacks happen when customers file a dispute with their bank about a charge they disagree with. While this is often the result of a fraudulent transaction, chargebacks can also occur with a simple clerical error, such as when a company charges the wrong amount or submits the same transaction twice. A good payment facilitator will become the go-between for your client and their bank, making it easy for you to avoid unnecessary hassle and confusion.

As a small business owner, you need to know about every little thing that happens in your company. You need to know about inventory, profit margins, marketing, and employee retention to name a few. Whether you accept payments online, with a smartphone, or in a brick and mortar store, accepting payment from customers is a vital part of becoming profitable. Here are three payment terms you should know.

1. Chargebacks

Chargebacks happen when customers file a dispute with their bank or credit card provider about a charge they disagree with. The disputed charge might be a result of technical or clerical error (being charged twice or charged the wrong amount) or it might be a quality issue, where the goods received are not what was purchased. The most common reason for a chargeback, however, is a fraudulent transaction. Chargebacks can protect customers from fraud, identity theft, and error, but if they are abused they can cause problems for your business. To avoid chargebacks you should gather detailed information from the customer, (billing address, shipping address, etc.) and be as accurate as possible in all your record keeping. Providing fantastic customer service and making your customers fully aware of your return policy can also help prevent chargebacks.

2. EMV/Chip Cards

EMV stands for Europay, MasterCard, and Visa who banded together to set standards for authenticating credit and debit card transactions. Together they formed a company called EMVCo that promotes the use of “smart cards”. Smart cards contain a micro-chip that can hold far more information than a traditional magnetic stripe. Because a smart card can hold more information, they can support multiple methods of authentication, making them more secure than a magnetic stripe alone. Instead of relying solely on matching a signature with a card, EMV cards require the use of a PIN. This PIN can be authenticated either online, with the PIN being encrypted and verified in real time, or offline, with the PIN being verified by the EMV card itself. While EMV cards are far more secure than the standard magnetic stripe cards, that doesn’t eliminate the need to have data security. EMV cards are common in Europe, and are becoming more common in the U.S. In October 2015, several major credit card providers including American Express, Visa, MasterCard, and Discover will be implementing a liability shift for point of sale terminals. This liability shift means that merchants and card issuers not using EMV compliant cards assume liability for all fraudulent transactions. If you want to be on the cutting edge, you might consider figuring out how to accept multiple payment methods, so you can still accept magnetic stripe cards as you and your customers upgrade to the more secure EMV cards.

3. Magnetic Stripe Cards

Magnetic stripe cards are the most common type of card in the U.S. However, since these cards rely on a visual authentication via a small hologram and the cardholder’s signature, these cards are far from secure. These cards are easily counterfeited and far more likely to result in security breaches so it is vital to secure your financial information to protect yourself and your customers. A good payment processor will keep customer financial data secure, even with the less secure magnetic stripe cards. While magnetic stripe cards are far from the most secure method of payment, they are still the most common payment method, so you can’t just default to accepting only the more secure types of payment. New payment methods like the EMV card, Apple Pay, and Google Wallet are becoming more and more common. Being able to accept these newer, more secure forms of payment while still accepting magnetic stripe cards is becoming a necessity.

Knowing these three vital payment processing terms can help you protect yourself and your customers’ financial data. It will also keep you on the cutting edge and help you know how you need to prepare for the future.

About ProPay

Since 1997, ProPay has provided simple, secure and affordable payment solutions for organizations ranging from the small, home-based entrepreneur to multi-billion dollar businesses. ProPay is a leading provider of complete end-to-end payment security solutions that reduce, and may even eliminate, an organization’s risk of having sensitive payment data compromised. ProPay can help you:

  • Enable merchants to quickly begin accepting credit and debit cards through instant underwriting
  • Secure payment data
  • Reduce compliance obligations
  • Reduce overall transaction costs
  • Enable companies to ACCEPT and MAKE payments in multiple international currencies

When a customer decides to return an item, he or she can either return it for a refund or store credit, or they might initiate a chargeback. But what is a chargeback? How is it different than simply returning an item?

A chargeback is when a customer files a claim with his or her bank or credit card provider to recall funds from a merchant, rather than dealing with the merchant directly. A chargeback can be issued for a number of reasons including:

- Technical Error – when there is a technical error with the card or bank

- Clerical Error – when a transaction is billed incorrectly

- Quality Issues – when goods are not received

- Fraudulent Transactions – when a customer claims that he or she did not authorize a purchase or is a victim of identity theft

Chargebacks are mostly in place to protect consumers in cases of error, fraud, or identity theft. It keeps them from being held responsible for purchases they didn’t make, or for incorrectly billed purchases. However, there are some who abuse chargebacks, which could cause your business major problems. So how can you avoid chargebacks?

1. Make sure the billing and shipping information is complete and accurate.

If a customer never receives a purchase because it was shipped to the wrong place, you could not only lose the item and the money you would have received, but you could also lose the customer. You can’t prevent user error, but you can ask if the billing address and the shipping address should match—and they usually do. You can also ask customers to confirm their address before you proceed, to make sure that you are being as accurate as possible. In addition to ensuring address accuracy, you and your customers can track packages to ensure safe, on-time delivery.

2. Make sure credit card information is complete and accurate.

When processing a “card-not-present” transaction—where chargebacks are most likely to occur— do all you can to ensure accurate credit card information. You could use a service that makes sure you can’t authorize an invalid or expired account, reducing your risk of a chargeback. Another important piece of information to obtain is a card’s CVV2 (card verification value) number. A CVV2, sometimes called a CVD (card verification data), CVN (card verification number), or a CSC (card security code), is a three- to four-digit code usually found on the backs of credit cards, under the magnetic strip, next to your signature. Having this code can help ensure that you are accepting payment from the cardholder.

3. Provide excellent customer service.

Providing excellent customer service throughout a customer’s experience with your business could encourage him or her to simply return or exchange a product, rather than initiating a chargeback. It will also encourage your customers to continue their business relationship with you even after a return, rather than terminating it all together.

4. Be straightforward from the beginning.

Making sure that your customers are aware of your return policy is another great way to avoid chargebacks. Whether you offer a return of funds or in-store credit, a return is far easier to deal with than a chargeback. Informing your customers of your return policy at the time of purchase, and making it easy to find later on, can go a long way in preventing chargebacks.

While you probably can’t avoid chargebacks altogether, ensuring accurate customer information, providing excellent customer service, and being straightforward from the beginning can decrease your risk of customers initiating chargebacks.

If your small business is taking credit card payments through a credit card processor, then you may have had to go through the often long and painful chargeback process. If you haven’t, you should probably learn as much as you can so you can be fully prepared. Chargebacks are one of the more frustrating realities of accepting credit card payments, but they can be much easier to handle with a little background knowledge of how the process works.

This infographic displays the chargeback process step-by-step, from the customer’s request of a chargeback to the resolution of the case. Check it out to learn more about what you can do to speed the process along, and to get a favorable resolution more frequently.


“When good people…cease their vigilance and struggle, then evil men prevail.” - Pearl S. Buck

When I was learning to ride a motorcycle my instructor gave me one piece of advice that always stayed with me.  He said “keep your head on a swivel.”  In other words, while I had to make sure that I was doing everything I should be doing, I also had to make sure that I was constantly looking out for what other people may be doing.  That way I could correct my course, or at least take some action to ensure that what the other people were doing wouldn’t put me in danger.  While this is certainly good advice for riding motorcycles, it is also good advice for data security.  It may seem like a stretch, but bear with me.

In securing our customers’ payment data, we have a guideline (actually a set of fairly stringent requirements) in the form of the Payment Card Industry Data Security Standards (PCI DSS).  To learn more about these standards visit this site.  Following these guidelines ensures that we are doing what we “should” in terms of protecting the data.  But that doesn’t mean that others won’t be taking action to put you (and your data) in danger – in the form of data compromise.  That means that you have to stay vigilant for what others might be doing – “keep your head on a swivel” –  to ensure that you are addressing newly identified risks and vulnerabilities that may not be addressed by the guidelines.

Recent trends indicate that small merchants are increasingly becoming targets of data thieves.  In a recent interview, Vantiv Vice President David Mattei stated, “…now we’re seeing an increase in the number of breaches in which smaller numbers of cards are compromised. Small, independent merchants are being targeted because of the ease with which fraudsters can compromise those payment systems.” That means that as small merchants, even if we are PCI DSS compliant, we must remain vigilant against potential attack.  One way to foil the fraudsters in this case is with the use of a P2P Encryption and tokenization solution. In this instance, the data is removed from the merchant system and replaced with “tokens,” or abstract representations of the cardholder data.  While merchants can still use the data to run reports, issue refunds or fight chargebacks, data thieves would find the tokens to be worthless.

The lesson in all of this is that we must remain on guard against new threats, even if we are doing everything “by the book.”  Leveraging secure technologies like tokenization can help ease the burden of compliance and render you and your customers more secure in the long run.