Navigating The Waters Of Payment Processing

We are deeply invested in understanding and addressing the myriad challenges our clients face in the realm of payment processing.

Throughout the year, we aim to shed light on topics that, while crucial, might not always be at the forefront of our clients’ minds. The first quarter, for example, is dedicated to unravelling the complexities of fraud and risk associated with payment transactions.

Fraud and risk in payment processing are more than just buzzwords. They represent real challenges that can significantly impact a business’s bottom line and operational efficiency. When things go awry, as they sometimes do, the repercussions are felt not just in terms of financial loss but also in the considerable time and resources spent in back-office administration to rectify these issues. It’s a topic that finance directors and account teams find invaluable.

As we navigate through the year, we delve into other critical areas such as omnichannel strategies, the advent of new technologies like point-to-point encryption, and the evolving landscape of PCI compliance. By the fourth quarter, our focus shifts to the opportunities presented by open banking and direct bank account payments, a significant shift from traditional card payments.

My goal here is not just to inform but to spark meaningful conversations between our account relationship managers and clients. It’s about providing a backdrop that enriches our clients’ understanding and prompts them to ask the right questions of their suppliers. This approach is designed to keep them abreast of the challenges and opportunities within the payment processing domain.

Checking remote card transactions are properly processed

Now, let us delve a bit deeper into the subject of fraud and risk management. The intricacies of chargebacks and disputes, for instance, are areas that demand attention. The established rules around these processes offer a certain guarantee of funds, provided the process is followed correctly. However, the risk of fraud loss becomes a reality when, say, remote payments are involved without thorough verification of the customer’s authenticity.

This risk is magnified in scenarios where payments are taken over the phone, as there’s no physical interaction between the card and the payment device to guarantee and it’s not possible to check that the cardholder is genuine. It’s a precarious position, as the reliance solely on card details without airtight verification processes opens up avenues for fraud.

Moreover, the scenario where goods are ordered remotely but then collected in-store presents its own set of challenges. It bypasses the security measures put in place for remote transactions, leaving businesses vulnerable. It is important to note the need for merchants to be adept at managing chargebacks and disputes. It’s not uncommon to see businesses acquiesce to claims without realising they have the means to contest them, provided they have the necessary evidence to support their case.

There are stronger controls for managing remote transactions that protect businesses. Moving all such transactions to secure ecommerce, using emails and apps, whereby the cardholder has to enter their details via the business’s website protects against the scams.

Managing returned goods to stop abuse

Another huge issue businesses are grappling with these days is the whole returns process, especially with online shopping booming like never before. Picture this: someone shops online, grabs four pieces of clothing, and then decides to return three, claiming a refund for the whole lot. Or even trickier, they return four items, but they’re not the same ones they bought. This sort of thing is becoming more and more common, and it’s a real headache for businesses.

A lot of folks are snapping up deals online, some scoring great bargains on clothes. But here’s the catch: if a business hasn’t set up a solid system for managing returns, things can get messy fast. They might not even check if the items returned match up with what was originally sold, leading to incorrect refunds.

‍