With so many digital payment platforms available in the market, choosing the right one can take time and effort. Before making any decisions, it’s wise to be aware of the most frequent online payment problems so you can better optimize payment processing.
In this post, we will discuss some of the biggest online payment problems that every merchant faces today and tips for overcoming them to deliver the most seamless payment processing possible.
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9 Online Payment Challenges to Be Aware Of
Here are some of the most common online payment problems business owners may encounter – if they haven’t already!
1. Online Card Fraud
The world is not new to online fraud, but fraudsters have also discovered ways to exploit the gaps in online payments. A recent report indicates that 70% of all card-related frauds involve foreign cards.
With the increase in online transactions, customers often face a plethora of risks due to data breaches. Another major issue with online payments is FRAUDULENT ENTRIES.
How Can Businesses Combat Online Fraud?
Start by auditing the online payment system. You can even hire an online security expert who will assist you in identifying the vulnerabilities. Also, check with the online payment service provider to understand the security measures to combat fraud.
Identify the weakest link in your online payment system through a comprehensive audit. In addition, you should choose an online payment service provider that offers the latest security measures.
MUST READ » Payment Processing Security: 7 Things to Consider
2. Cross-Border Transactions
The cross-border payments processing industry is growing. There’s no denying that these are now exposed to fraud risks and are more vulnerable.
These transactions are the ones where a payee and the transaction recipient are based in different locations. These can be retail, wholesale, or recurring transactions.
How to Overcome Cross-Border Transactions Fraud?
Technologies are shaping international payment requirements and increasing the security of payment gateways. Here’s how you can overcome payment issues and fraud in cross-border payments:
- Using the transnational system to decrease reliance on the correspondent network.
- Managing liquidity, credit risks, and more.
- Following the government-led initiatives and mandates to regulate the payments.
- Increasing efficiency of processing through outsourcing.
3. Chargebacks
A chargeback occurs when a customer disputes a purchase with his or her bank.
Having a dispute with a customer can be very frustrating for a business owner. Chargebacks caused by “friendly fraud” have increased dramatically in recent years, putting businesses at greater risk of losing money when customers file a dispute with their bank rather than work directly with the merchant to resolve the matter.
If you don’t want your business to suffer frequent chargebacks, you must understand how these disputes work and what you can do to combat them.
What is the Best Way for Businesses to Prevent Chargebacks?
- Identify the name of your business on your billing statement.
- Clearly describe cancellation and return policies on your website and educate your customers about them.
- Follow all established security protocols for accepting credit cards.
- Verify each transaction with as much information as possible.
- Ensure all orders are shipped with tracking and delivery confirmation.
4. Card Data Security
Businesses and merchants that offer credit card processing (online/offline) must comply with the Payment Card Industry Data Security Standards (PCI DSS). This is mandatory for credit card companies to ensure the security of card transactions in the payment industry.
How to Ensure the Security of Card Data?
- Install and maintain a firewall configuration to protect the cardholder data.
- Encrypt the transmission of the cardholder data across open and public networks.
- Do not use vendor-supplied defaults for the system passwords.
- Keep your anti-virus software or programs up to date.
- Track all network resources and cardholder data.
- Restrict access to the cardholder data.
- Maintain the security system and applications.
MUST READ » All About EMV Chip Cards
5. Optimum User Experience
To accept online payments, businesses must integrate their bank accounts with payment processors. This process should not take a long time or be complicated. To ensure this, sellers and businesses must have an easy-to-use interface.
What Can Be Done to Provide Optimum Experience?
Select a payment processor that provides a comprehensive user experience when adapting a payment processor. The service provider will ensure smooth and quick payment so that customers don’t have to wait and everything gets done without delay.
6. Compliance and Security
Online payments face compliance issues such as escalating regulatory requirements and other certifications such as PCI. Payment processors adhere to high compliance standards to build trust and deliver the best customer experience.
Penalties and fines may be imposed for non-compliance with international standards.
The Solution to This Issue Is:
- Comply with privacy regulations like GDPR for the EU (European Union).
- Be aware of the changing compliance and regulatory environment to make the right decision about online payments.
7. Regular Updates to the Payment Options
A lot has changed because of technology and continuous advancements. This change occurred not only in the enhancements of online payment but also in the online payment options and features.
People are moving from businesses to local stores to cashless transactions with the demand to increase sales. This can be challenging for people who still use cash for transactions.
The Solution to This Issue Is:
- Look for a platform that satisfies the seller/buyer’s needs.
- Contact the support team of gateway processors and learn more about their services.
By doing so, you will be able to conduct a safe transaction and ease the effort of maintaining cash books, passbooks, and cash payments.
8. Processing Fees
Businesses often focus on keeping taxes and other expenses low, but the costs that come with multiple financial systems, countless regulations, and international market expenses are overwhelming.
In addition, the costs of payment processing change over time and depend on several factors, such as the type of card used, the methods of accepting payments, the average size of transactions, etc.
What Can Be Done to Overcome the Online Payment Processing Fee?
- Businesses can comply with financial and legal requirements by using a dedicated payment provider.
- The company will ensure they have a seamless and compliant international buying/selling experience.
9. Meeting Customer Expectations
With the advent of new technologies, customers have different expectations about what businesses should offer, including personalized experiences and payment options.
Customers expect seamless transactions by using multiple currencies, via payment gateways, and through wallets.
How to Deal With It?
One must first understand what the customer needs to find a platform that satisfies both the seller and the buyer. Understanding it and getting it done can take a couple of days because it is not as easy as it sounds. Get in touch with the support team of a top payment gateway processor to understand how you can conduct safe online transactions.
An Overview of How Payment Gateways Work
A payment gateway is an online payment service, which, when integrated with a business and combined with the channel, can receive and make payments. The procedure to receive payments involves clients filling in the details (credit/debit card number, CVV, expiry date), and proceeding to make payment.
An online payment gateway follows the procedure for setting up the payments. This usually happens when customers order from a merchant that accepts payments through a payment gateway.
A Payment Gateway Offers the Following Benefits:
Payment gateways are more than just money transfers: They provide a better shopping experience for merchants. Here are some benefits of using a payment gateway:
- PCI-DSS: The PCI-DSS compliance makes them secure enough to keep users’ information confidential at the portal for recurring payments.
- White-Label Wallet: Some payment gateways allow you to make digital payments through mobile wallets. This allows users to make all transactions easily from one place and move money from the account balance to the wallet app.
- Fraud Screening Tools: Most payment gateways come with fraud screening tools that help to reduce the risk of losing information. These tools include Address Verification Service (AVS), Card Verification Value (CVV), and Card Code Value (CCV).
Final Thoughts
Making the switch from your comfort zone to something new can be challenging. Since the world is changing so rapidly, it is best to integrate a payment gateway into the website/app for a better user experience and ROI.
When choosing the right PSP (Payment Service Provider), ensure they address the above concerns and are a good fit for you. Alternatively, as experts in the payments and fintech sector, GETTRX provides solutions to reduce your compliance requirements, easy-to-integrate functionality, and adaptable features that elevate your customer experience. For more information, you can email us at info@gettrx.com.
For more information on Payment Processing, check out these resources: Payment Processing Basics, The Importance of Payment Processing, Payment Processor vs ISO.
