Points to Consider Before Accepting Card Payments Online
A large number of online merchants, especially those focused on the international market, choose credit and debit cards as a payment method for their business. For buyers, card payments seem to be a quick and easy process, as they only need to enter their card details. However, you, an online merchant, should get to know the details and behind the scenes of payment processing before accepting cards on your website. It will help you feel safer and be more confident in assisting your customers as well as dealing with payment-related problems. Thus, we suggest taking into account the following aspects:
1. The number of payment service providers grows fast – choose with caution.
With the development of FinTech all over the world, the number of payment processing companies is rapidly increasing. You should be aware that not all of them will suit your business needs. Before entering a business relationship with a provider, consider the following questions:
- Is your type of business supported?
- Are there any country restrictions? (Note that some payment institutions can work only with a particular list of countries.)
- Do they support the currencies that you need?
- What integration possibilities do they provide?
- Are there any additional features, such as one-click or recurring payments?
- How can you reach their customer support?
- Are fees acceptable to you?
- Are there really no additional or hidden fees?
2. Learn how credit and debit card processing works.
If you understand the payment process, you will be able to prevent possible issues and know how to deal with customers’ problems and disputes. It will also help you select the most suitable payment service provider.
Card payment processing normally includes the following steps:
- A customer chooses to pay with a credit/debit card and enters their card data (card number, expiration date, CVV/CVC code) at the checkout.
- The payment gateway receives the data and forwards it to your payment processor and acquiring bank.
- The acquiring bank receives a payment request and forwards it to the card network (Visa and Mastercard).
- The card network sends a request for payment authorization to the card issuing bank.
- The issuing bank verifies that the card data is correct, and the cardholder has sufficient funds in their account. If everything is correct, the approval response is sent back to the payment gateway.
- The customer sees on the website that the payment is successful, and the order is created.
You can find more information about payment flow in this blog post.
3. Watch out for hidden fees.
Payment service providers may charge such fees as registration or monthly fees without announcing them openly. These fees are not unlawful, but your payment service provider should inform you about them in the agreement. Also, you can always ask your provider directly about all the charged fees.
4. Learn about chargebacks and how to avoid them.
One of the most unpleasant problems related to credit and debit card payments is chargebacks. A chargeback is an official payment refund issued to a customer when they contact their issuing bank and dispute a certain payment. A customer has the right to claim a chargeback when they do not recognize a transaction in their bank statement or are not satisfied with the delivered product or service. Usually, the process of dealing with chargebacks is long and troublesome. That is why we always recommend preparing for them in advance and implement all the possible chargeback prevention measures. You can learn how to dispute and prevent chargebacks in our series of articles on this topic.
No doubt that card processing looks like a complicated process at first sight. Nonetheless, it will offer you more possibilities and benefits than challenges. Card payments are not only fast, convenient and popular, but they are also available to customers all around the world.
If you are interested in integrating card payments on your website, visit Cardinity for more information. Feel free to leave your comments and questions below.
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