Best Practices High Risk Merchant Accounts

The very nature of high risk merchant accounts makes them susceptible to chargebacks.  When chargeback ratios exceed acceptable thresholds, high risk processing accounts can be jeopardized.

The importance of communication between customers and merchants cannot be be underestimated.  If a consumer has any questions or issues, you want them to contact you rather than calling the issuing bank.

Here are some tips on best practices for protecting your high risk merchant accounts.

Make it Easy for Customers to Contact You

It’s amazing how difficult it can be to find emails or phone numbers on sites.  Post information prominently.

Respond quickly to phone calls and emails.  Some high risk merchants fear that making it too easy for a consumer to call will result in a cancelled order.

The opposite is true. Proper training of your customer service staff will leave customers with a positive experience and increase sales..

Confirm Descriptor

The descriptor what a consumer sees on the monthly credit card statement describing the purchase.  Run a test transaction prior to starting to process to confirm the information is correct.  

Most payment processors limit the number of characters that can be used in a descriptor. When you need to use an abbreviation due to space limitations, make sure the customer will recognize the name of your company.

Be sure a complete customer service phone number is provided. One high risk merchant account was shocked to discover that there were only 8 digits digits for a phone number, rather than 10 digits.  Imagine what chaos that created.

Ongoing Customer Contact

Build relationships with customers.  Communicate on a regular basis.

Keep customers updated on the status of orders.  Notify customers when an order has shipped and provide a tracking number for the order.

If a product is on back order, communicate regularly with the customer and provide the opportunity to cancel the order.

Responsive Customer Service

High risk merchants are at a disadvantage when it comes to chargebacks.  Even if you win a chargeback, the chargeback still remains in payment processing history.  As a result, chargeback ratios will skew high and could jeopardize processing or the ability to get another account.

Strive to immediately resolve customer issues in favor of the consumer.   If a customer requests a refund, issue it fast.

Don’t argue with a customer.  Let them be right.  It is smarter to issue a refund.  Otherwise, the customer just hang up and call their bank to initiate a chargeback.

Fast Response to Chargebacks 

 If a customer charges back a transaction, you will be contacted and asked for information and documentation on the sale.  Answer all requests promptly and provide supporting documentation.

Take advantage of “early warning” systems that notify you when a customer disputes a transaction.  This gives you the opportunity to proactively refund the sale before a chargeback is issued.

Account Monitoring Proactively

Closely watch your high risk merchant account for suspicious activity.  Beware of any transactions that could be fraudulent.  Manually review suspicious orders and call the buyer for more information before shipping.

Learn how to use the automated fraud protection features that allow you to control your high risk processing.   

• Block transactions from countries that are notorious for high levels of fraud. 
• Set velocity controls on the gateway to screen out potential fraud. 
• Validate each credit card transaction against a standard criteria including place of origin of the order, size of the order, referring URL and other factors that can be customized within the payment processing gateway.

Comply with the Merchant Agreement

Read the terms and conditions of the merchant agreement.  Know what your processing limits are, if any, and the anticipated ticket size of an average order.  

If you have any material changes on the account, contact your payment processor in advance.  For example, a high risk merchant account may run an advertising campaign that will drive more volume than normal. 

Banks hate surprises but are more than willing to work with you if they know in advance the reason for changes in the account.

Guard Against Chargebacks

Excessive chargebacks are the single main cause of high risk merchant account termination.   To help avoid chargebacks:

• Do not complete a transaction if the authentication request was declined.
• Clearly disclose all merchant policies including merchandise returns, refunds or cancellations.
• Settle transactions and close batches daily.
• For high ticket items, require a signature upon delivery, including proof of identification from the customer.
• For recurring transactions, cancel the order immediately upon customer request. There will be a certain percentage of cards that do not go through each month because the card is no longer valid..  Automate card updates in your payment processing gateway or contact these customers to obtain a current credit card number and reauthorize recurring billing on the new card.

Conclusion

Controlling chargebacks is vital to proect your high risk merchant accounts.  Follow the suggestions in this article to help you control your chargebacks.

High risk merchants need to be particularly vigilant in guarding against chargebacks.  Although you can never stop all chargebacks, keeping your chargebacks low is the key to maintaining your high risk processing accounts.  

Interested in protecting your high risk processing account against chargebacks?

Contact info@paynetsecure.net today

Direct Processor Merchant Accounts

Here are three cost saving features that are available only directly through a direct payment processor.

There are only a handful of direct processors.  Most merchant account providers are Independent Sales Organizations (ISOs) rather than direct payment processors.

Account Updater  Stabilizes Cash Flow

Account updater transforms up to 75% of declined card transactions into authorized payments without manual intervention.  This reduces expenses for companies with recurring billing, recurring payments, and subscription billing models.

During every recurring billing cycle, a significant percentage of transactions are declined.  The most common reasons for card declines are:

Cards reissued due to security breaches.  Javelin Research reports 28% of all consumers received a replacement debit or credit card last year.

• Cards being upgraded.
• Expired expiration dates

Account updater eliminates the time and expense of dealing with declined card transactions.  When a card is declined, the processor automatically retrieves the updated card information from the issuing bank.  The card that was initially declined is re-submitted with the updated information.  Up to 75% of the declined transactions are transformed to approved payments.  Revenues are rescued and recurring payment income is protected, all without the need for manual intervention.

Without account updater, merchants have the burden of contacting customers to request updated card information.  Increasing the cost of customer service as well as  increasing the risk that the customer will cancel the service when updated card information is requested.

Eliminate Gateway to Save Money   

Direct connection to the front/back end processor eliminates the need for a payment gateway.  A payment gateway creates a possible “point of failure” and adds an unnecessary layer of expense.   Direct connection to the processor removes potentials for downtime, timeouts, eliminates gateway fees/costs and reduces payment processing expenses.

Dynamic Descriptor Reduces Chargebacks

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.  The descriptor can also display a different customer service phone numbers for products or services.  This significantly reduces customer disputes and chargebacks.

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

Direct processor accounts are an excellent option for high volume merchants.  To qualify for a direct account with a processor, a minimum of $500K per month is required.

If you are a high volume merchant, it is smart to explore your direct payment processor options for merchant accounts.  You’ll discover added features and benefits that will help your business grow.

Interested in finding out more about direct processor high volume merchant accounts?

Contact info@paynetsecure.net today.

 

 

Recurring Billing for SaaS Providers

Recurring payments are commonly used for services and subscriptions.  Among the fastest growing industry for recurring billing are SaaS providers, with growth predictions of $21.3 billion in annual sales by 2015.

Recurring billing improves your profitability and cash flow by automating the payment process.  Flexible recurring billing plans increase consumer satisfaction by making payments easy and convenient.

Recurring billing models can be based on time intervals such monthly, weekly, daily or hourly.  Or be measured on how much a service is used.

Recurring Billing Benefits

• Stabilize of cash flow and safeguard income
• Increase sales and expand lifetime value of consumers
• Recover potential lost revenue quickly and automatically
• Decrease operating expenses
• Control process flow automatically to boost productivity
• Retain customers by eliminating unnecessary opportunity to cancel service
• Increase consumer satisfaction by maintaining continuity of service

Recurring Billing Payment Processing Security

Recurring billing uses tokens rather than card data for recurring payments. Cardholder data is encrypted and a token is assigned to the transaction. Recurring payments are processed using tokens.

Encrypted tokens for recurring billing keeps you safe by eliminating the need to store card information on your systems.  The burden of cardholder security for recurring payments passes from you to the payment processor.  And helps keeps you compliant with payment processing security standards.

Account Updater Service for Recurring Payments

It’s not unusual for 5-12% recurring billing transactions to be declined during each recurring payment cycle. Every declined transactions means potential lost revenue.

Technology is now available that converts up to 70% declined recurring billing transactions into authorized recurring payments.  When a recurring payment is declined, the transaction is sent to the issuing bank which automatically updates the card.  Updates include expiration dates, card numbers and account closures.

The recurring billing transaction is then automatically resubmitted for authorization and payment.  Once the recurring payment is complete, the money for the recurring billing flows to the merchant.

Automatically updating recurring billing transactions maintains cash flow, reduces operating expenses, and increases customer satisfaction.   Recurring payment revenues are protected, subscription billing periods are extended, service continuity is maintained and account reconciliation is simplified.

Conclusion

Recurring billing is a standard feature for SaaS providers, providing customers a cost-efficient way pay for the software.   Yet, it is important for SaaS providers to protect cash flow from recurring payments.  

• Use account updater services to gather new card information without the need to contact clients 
• Protect your business by using payment tokens for recurring billing transactions
• Stop revenue leakage.  Protecting cash flow from recurring payments is an easy way to protect your profits

Are you a SaaS provider that wants to increase revenues from recurring payments?

Contact info@paynetsecure.net today.

 

Payment Gateway Money-Maker

Payment processing systems are big money makers for ecommerce companies.  Experienced ecommerce solution providers know that the correct positioning of payment gateway services is part of building of ongoing monthly income.

In the cut-throat merchant account market, the correct positioning of a payment gateway can set you apart from the crowd.  When properly offered, payment gateways boost customers’ loyalty, reinforces your company’s “brand” and is the platform through which new products flow to your customers.

As companies use the payment gateway services, and add a variety of options to their payment processing systems, revenues to you increase.  Without any additional effort on your part.

 

Payment Processing Systems Benefits

For e-commerce providers, offering payment gateway services helps you:

1. Acquire more customers
2. Retain your customers longer
3. Open doors to new sales channels
4. Turbo-charge the growth of your company

 

Payment Processing Systems Features

The right payment gateway services gives you “bang for your bucks” Payment processing systems professionals should consider payment gateway services with the following:

• Private Labeling.

Private labeling gateways is another way to build your brand.  Each time your clients access payment processing systems information your company is the brand name which they see seen.  The payment gateway is transformed into a promotional tool for your company.

• Rich Reporting.

 Merchants want to be able to personalize their reporting, add customizable reporting fields, view payment processing systems data graphically and have multiple ways to manipulate data to meet unique needs through their payment gateway services platform.

• Load Balancing for Multiple Accounts.

 Load balancing with payment gateway services lets companies process using more than one merchant account.  Valuable for high volume and high risk merchant accounts.

Load balance among unlimited number of accounts.  View accounts individually or globally.  Simplifies customer service.  Account reconciliation and reporting is a breeze.

• Fraud Protection

 Designed to protect online merchants’ payment processing systems, fraud protection provides custom strategies to identify the difference between legitimate shoppers and fraudulent shoplifters. Sophisticated rule-based filtering can be customized by businesses within the payment gateway services platform to provide the level of protection desired.

Contact info@paynetsecure.net today for more information.