Whether your business is large or small, a sound payment processing strategy is one of the central elements to achieving profitability, longevity, and overall success. Too often, businesses struggle to meet their monthly goals due to an ineffective transaction processing system or a lack of understanding when it comes to how payment processing and consumer security should function. When these issues intersect, it can spell disaster for your bottom line and curtail longterm plans for business growth.
Is your team curious to find out what it takes to optimize how you approach payment processing? Luckily, getting your payment processing strategy right isn’t as hard as it used to be – learn more on this with a free consultation here.
Here are some best practices for smarter payment processing your business should be taking advantage of:
- Learn about available payment processing systems.
- Get informed on different types of credit card fraud.
- Discover & employ strategies to prevent fraudulent charges.
- Select a proficient payment processing system.
- Enable a wide variety of payment methods.
Whether your business is a small, locally-owned corner restaurant or a large, multinational corporation, having your payment processing strategy in order should be your top priority.
Are you ready to take control of how your business processes credit card payments and other transactions? Get started now, or read further for more ways to optimize your strategy.
The best way to improve how you manage transactions and your payment processing strategy starts with the basics. This starts with sitting down with your management team to review what kind of payment processing solutions are out there, and how they can work for your business.
There are two main types of payment processing systems. These are payment aggregators and dedicated payment processors. They differ in a few key ways:
- Payment aggregators are large businesses that handle the portfolios of many companies. They process transactions through a common interface, like an app, widget, or their own website. Companies like PayPal, Stripe, and Square are all aggregators, and they share communal merchant accounts with their clients to process payments. While they have ease of use, the ultimate cost to the merchant is typically higher.
- Dedicated payment processors are more closely tailored to the needs of their individual merchants. Instead of a large shared merchant account for many different businesses, dedicated payment processors will allow your business to use its own merchant account to process transactions.
If your business already has a payment processing system in place, which kind do you use? Are you happy with your experience thus far?
Both forms of payment processors present benefits and drawbacks to businesses. Since payment aggregators manage a much larger number of portfolios, some businesses opt to partner with a dedicated payment processor to receive more customized services.
Working with some dedicated payment processors can require a larger investment on the part of a merchant, sometimes making it an expensive choice for younger companies with tighter budgets. Fortunately, providers like NETbilling have competitive rates that remove this hurdle.
Selecting the right payment processor for your business many times comes down to understanding your company's security needs.
You’ll need to choose a trusted partner that offers a wide variety of fraud protection features. Depending on your business model, some fraud risks will be more prevalent than others. Review common transaction fraud schemes and discover how they can affect your business:
- Identity theft. This is the most common kind of payment fraud and encompasses most other fraud schemes. Your payment processor should have measures in place to detect identity theft as well as prevent the identities of your customers from being stolen.
- Credit card tumbling. With credit card tumbling, identity thieves randomly generate credit card numbers and use online transaction forms to test out the numbers. Your business could be at risk if random users attempt dozens or hundreds of small transactions.
- Refund fraud. In these schemes, fraudsters generally take a stolen credit card and make a purchase through a business like yours. Then, they’ll cancel the payment by making a call to their victim’s bank posing as them. They’ll collect the refund from their victim’s account, and your business could be hit with fees.
If you want your business to be seen as trustworthy by your customers, you should take these common fraud schemes seriously. With a payment processing strategy that is security-focused, you’ll build long-lasting, profitable relationships with clients.
With a better understanding of top payment fraud schemes, it’s also important to look closer at the different ways payment processors address (and prevent) these issues for their merchants.
You’ll want to choose a payment processor that offers a variety of fraud-prevention and protection measures without having to pay extra for must-have features.
Consider some of these common fraud prevention solutions your team should look for in your payment processing partner:
- Two factor authentication. This method allows your customers to verify their identities before completing a transaction by responding to a special email or SMS message.
- BIN/IP address verification. Using this strategy, your payment processor will automatically cross-reference the IP address of customers with the address tied to their credit card.
- Card verification codes. For online payments, requiring users input their three-digit credit card verification code (CVV) can block certain identity theft schemes.
- Minimum transaction limits. These can come in handy in preventing credit card tumbling from occurring on your company’s website.
- EMV chips. For on site payment processing, EMV chip readers can give customers peace of mind that their financial information is safe from hacking.
Bonus tip! Businesses with a physical presence, like restaurants, can benefit greatly from having EMV chip reading technology at their point-of-sale (POS) system.
Strengthening your payment processing strategy doesn't end with shoring up security concerns. In selecting the right payment processor for your business, you’ll also want to ensure you have great core features & capabilities. Your transaction processing system should be:
- Intuitive. Internally, you want your payment processing system to be easy-to-use for your staff members and require minimal training to master.
- Customizable. Ensure your system gives team members the ability to customize how you process payments and engage with customers.
- Portable. Find a payment processor that gives your business the capability to process transactions from wherever your customers already are—on the web and in person.
Another important consideration when choosing a payment processor is how seamlessly the system can integrate with your other software or services.
If you have to deploy a number of solutions to communicate between your website or shopping cart, data reporting tools, employee management system, accounting software, and payment processor, you could have a logistical problem. It's important to utilize a platform that can directly integrate with your existing systems with minimal effort.
The whole point of rethinking your payment processing strategy is to ensure smooth operations of your back office. Payment processing providers like NETbilling offer complete integrations with a number of platforms.
Over the past several years, the way that businesses accept payments from customers has evolved over leaps and bounds.
If you are seeking an adaptable payment processing solution that will stand the test of time, you need to choose a partner that already puts customer preference first when it comes to payment methods. This ensures you a payment processor that will take the convenience of your customers seriously. Be sure your solution includes these essential payment methods that your payment processing partner should offer:
- Credit/debit. These are the baseline payment methods that your system should offer regardless of whether or not you conduct transactions primarily in person or online.
- EMV chips. Short for EuroPay, MasterCard, and Visa, these chips are now standard on new payment cards and require EMV chip reader technology to function.
- Contactless payment. This payment method uses near-field communication (NFC) to read payment cards without the customer swiping or “dipping” their card.
- Split checks. For restaurants and bars especially, having the ability to cleanly split checks among customers can be a crucial factor in boosting return patronage.
- Cash discount program. This option is paramount for retail processing merchants who want to minimize the cost of payment processing while offering cash paying customers an added benefit.
What’s one great way to ensure that your patrons return again and again to your business? Offer secure user accounts that keep their information on file for future transactions. This way, they won’t need to worry about re-entering personal payment information every time they want to make a transaction.
Taking charge of your business' payment processing strategy should be at the top of your list when finding ways to strengthen your business model. With these optimization tips, you’ll be ready to find the right payment processor for your needs and get started conducting smarter transactions.