The vast majority of  card transactions combine 2 elements:  authorization and capture.  Once the card information is received, authorization of the amount of the purchase is obtained from the issuing bank, and, if approved, the card is charged.  The transaction is automatically set for settlement to the merchant.

Sometimes a transaction is submitted for authorization only.  A common use of authorization only is if a merchant wants to verify the availably of funds on a buyer’s card before finalizing the order.  It is also used by merchants if they don’t have an item in stock or they want to review orders before shipping.

A capture only transaction is used to complete an authorization only transaction.  The previously authorized amount is captured (the amount is charged to the buyer), and the transaction is sent for settlement to the merchant.

An authorization only transaction and a capture only transaction together are considered one complete transaction

A credit transaction is used to refund customers for payments that were previously processed and successfully settled to the merchant.

For more information, contact info@paynetsecure.net

What is a Descriptor?

A descriptor is identifying information about a transaction which appears on buyers’ credit card statements.  Descriptors remind cardholders of the details of the purchase and give buyers a way to contact the merchant.   It is advantageous to both buyers and merchants to use clear descriptors.

Types of Descriptors

There are two major categories of descriptors: static and dynamic.

Static descriptors, sometimes called hard descriptors, assign a single description and customer service number to all products and services.  Some merchant account providers allow only a single static descriptor to be used with each merchant identification number (MID).

Dynamic descriptors, also called soft descriptors, allow merchants to associate a distinct description and phone number with different products or services.  Dynamic descriptors give companies the option to use the name  of the product or service as the descriptor on the customer’s credit card statement.  This significantly reduces customer disputes and chargebacks.

Benefits of Dynamic Descriptors

Many companies offer a variety of products or services.   If a company name appears as the descriptor on customers’ card statement rather than the name of the product or service, the customer may not recognize the charge.   As a result, customer disputes/chargebacks occur because customers may not identify the company name with the specific product or service which was purchased.

This happens even if a company clearly advises the customer at the time of purchase of the name which will appear on the customer’s credit card statement.   Another common reason this happens is when the spouse who did not make the purchase handles the family finances.  The spouse may not recognize the name of company but would recognize the name of a product or service that was purchased.

Conclusion

Dynamic descriptors and phone numbers can help reduce the occurrence of customer disputes and chargebacks by clearly identifying the product or service on customers’ credit card statements. Dynamic descriptors are helpful to  both standard & high risk merchants to keep chargebacks low.

Does your descriptor give enough information to your buyers?

Contact info@paynetsecure.com

Combine Payment Processing with Internal Systems

Electronic payment processing is an important part of streamlining business operations.  But, to get the most bang for the buck, organizations should integrate payment processing with internal systems.    

Integration with accounting, enterprise resource planning (ERP), and other financial systems is necessary to realize the true benefits of electronic payment processing.

Ways to Integrate Payment Processing

Integration with back office systems can be done directly to the processor or through integration with a payment gateway.  Integration at the processor level can be beneficial in obtaining some unique services variable only at the processor level.  Direct processor integration ties the company tightly to that processor so companies must be certain the processor is one that the company wants for the long-term.

Integration to a payment gateway extends the flexibility of processing.  Merchant accounts can be obtained through various processors instead of a single processor which helps mitigate payment processing risk long-term.

Conclusion

Integration of payment processing with back-office software:

• improves cash flow and forecasting
• eliminates manual data entry
• increases productivity
• minimizes  the risk of human errors

Integrating  accounting and ERP solutions, on both the AR and AP sides, with payment processing for credit and debit cards, electronic checks, ACH, and alternative payments is the smart way to do business.  Companies discover it provides exponential value with fast ROI and long-term savings.

How are you integrating your payment processing with your internal systems?

Contact info@paynetsecure 

Card Declines Impact Recurring Billing

A new report issued by Javelin Strategy & Research reveals that 28% of all consumers received a replacement debit or credit card in 2009 due to security concerns.  And many of these consumers had more than one card replaced or more than one card reissued.

This data is particularly relevant to merchants with subscription billing, SaaS providers, or merchants with a recurring billing model.  When a card is reissued, the updated information for the new card must be acquired or else the recurring payment transaction will be declined.  Declined transactions mean no revenue is generated.

Automate Updating Card Data

How can you get updated card information? 

Well, the old-fashioned way is to contact customers directly by email, phone or other means and request the updated card information.  This is ineffective and expensive.  And gives customers an unnecessary opportunity to cancel the recurring payments.

A smarter approach is to use a payment processor who has an account updater feature. 

When a card is declined, the processor automatically contacts the issuing bank and gets the updated card information.  There is no need to contact the customer and no manual intervention is needed on the part of the merchant.  The updated cards are resubmitted and approved transactions which generate revenue result.

Conclusion

Account update services automate the process of obtaining current card info for recurring billing. The service is available to merchants who process high volumes of recurring payments monthly.

How are you updating your card data for recurring billing?

Contact info@paynetsecure.net