Like all things in the business world, online credit card processing and maintaining a merchant account have their challenges.
There’s a lot of room for error and making mistakes, but we’re here to help you prevent them. Below, we’ve listed what we feel are the seven deadly sins of e-commerce credit card processing and provided some advice to help you avoid them at all costs.
The First Deadly Sin: Not Reading Your Merchant Account Contract
The biggest mistake a business owner can make in the beginning stages of credit card processing is failing to read the merchant account contract thoroughly. When you take on the responsibility of accepting credit cards online, you need to know all of the terms and conditions that coincide with your account.
If you miss even a small yet important detail in your contract, it may result in your acquiring bank terminating your merchant account. So, to avoid all minor confusions or miscommunications, be sure to read your merchant account contract thoroughly before you start accepting credit cards online.
The Second Deadly Sin: Not Accepting Multiple Currencies
As an e-commerce merchant selling to customers all over the world, you only accept one or two currencies for payment. Your competitor also sells to customers all over the world, but he accepts multiple currencies. Whose business do you think will be more successful? When you’re an international merchant, you need to provide your customers with the option to purchase pay in their local currency or else they’ll look for goods or services somewhere else.
The Third Deadly Sin: Slow Website Server
Online shoppers have a tendency of being more impatient and in a hurry than traditional in-store shoppers. If your website server operates too slowly, most customers will automatically assume it’s their Internet connection and not your site. Instead of being patient and waiting for a timeout or “404” error message, they may click on the “Pay Now” button several times.
Multiple clicks on the “Pay Now” button could result in a customer accidentally purchasing the same order multiple times, further resulting in chargebacks, losing a customer, or both. To avoid this deadly sin of e-commerce credit card processing, make sure your website is up and running fast and efficiently.
The Fourth Deadly Sin: Billing Descriptor Lacking Description
A billing descriptor lacking description could cause your customers to request a chargeback if they don’t remember what they bought from you. You can easily prevent this type of chargeback by adding your company name and telephone number to your billing descriptor so customers will instantly remember who you are and what they bought from you.
The Fifth Deadly Sin: No Customer Authorization on Large-Ticket Items
You sell a variety of goods at various prices, but most of your customers purchase small-ticket items. On the occasion when a customer purchases a large-ticket item from your website, this should raise a red flag in your head that it could potentially be a fraudulent transaction.
One of the worst deadly sins an e-commerce merchant can make is not requiring customers to authorize large-ticket purchases–you’re basically telling fraudulent customers that they’ll get away with their criminal acts. You can avoid this deadly sin by either calling your customer for verbal authorization or requesting an email or fax with a photocopy of your customer’s photo ID, credit card, and signature.
The Sixth Deadly Sin: Not Screening Transactions
Not screening your transactions is just as bad as not requiring a verbal or written authorization on large-ticket transactions. When you do screen your transactions, you have a better chance of spotting fraudulent purchases, and then you cancel or refund the transaction before a chargeback occurs.
When using your payment gateway to screen your transactions, you should look for red flag signs such as multiples of the same item within one purchase, several purchases made from the same credit card within a certain amount of time, and a billing address that differs from the shipping address. Before you cancel or refund these transactions, you can call the customer to verify the purchase.
The Seventh Deadly Sin: Not Preventing or Fighting Chargebacks
A huge deadly sin when processing credit cards online is not preventing or fighting chargebacks—a factor that can result in your acquiring bank terminating your merchant account. When your chargeback ratio is too high or if you’ve had merchant accounts terminated from a high chargeback ratio in the past, this deadly sin can make it more difficult to get an acquiring bank to approve you for a new merchant account. Keep your chargeback ratio as low as possible so the credit card processing on your website remains uninterrupted.
Share Your Deadly Sins
How do you receive authorization on large-ticket transactions? If you’re an international merchant, how many currencies do you accept on your site? What information do think is necessary to provide in a billing descriptor? Share with us some of your worst credit card processing mistakes.