You can lose a sale if a card is declined at checkout.  This article discusses why cards are declined and what you can do about it.  Contact info@paynetsecure

What is a Card Decline?

A card decline occurs when the customer reaches the payment page and enters the card information but gets declined by the issuing bank.  It is not uncommon for customers to give up on completing their order because of payment-related difficulties.  

Customers get discouraged when a card is declined and often think that trying again will be a waste of time.  

Authorization errors which result in declined transactions can be prevented or solved once you understand the reasons for the declines.  

Common Reasons for Getting Declined

Internet payment processing are used for both standard and high risk merchant accounts. Regardless of your type of business, declined cards can quickly erode your profits.  

The reasons behind card authorization errors are diverse.  Common causes of card declines include insufficient credit limits, incorrect data entered  by the buyer, data or ID breaches, and expired cards.

False Positive Card Decline

There is one additional authorization error that occurs way frequently, frustrating customers and leading to quick shopping cart abandonment.  Declined card transactions from false positives can cost you big time.  

A false positive occurs when a buyer makes a legitimate payment, but the bank flags it incorrectly as fraud suspect.  Fraud prevention is one of the top concern for most banks. Yet, guarding against fraud also leads to false positives card declines .  

The card should have been approved.  But the bank’s overly aggressive measures to guard against fraud caused it to be declined.  

Javelin Strategy & Research released a study on the prevalence of false positives in the ecommerce sector. The research, which was based on 3,200 respondents residing in the US, revealed that around 15% of online shoppers got declined due to suspicion of fraud. No less than 39% of them abandoned the order and the payment process because of the error.

Consequences of Authorization Errors

Unfortunately, the losses that result from false positives are great. In the same study, Javelin Strategy & Research estimates these losses to around $118 billion. Since financial institutions are primarily concerned with avoiding the costs that result from online fraud, finding the right balance between preventing fraud and keeping the false positive rate low can be challenging.

Being declined inexplicably will surely make the customer experience as frustrating as it can get, so it is not surprising to see how frequently the event leads to shopping cart abandonment.

There is a more insidious, long-term consequence that results from authorization errors. That is, consumers begin to lose their trust in a payment system that lumps them together with fraudsters.

Reducing the Number of Errors

The use of complex analytics may reduce the rate of false positives in the future, but until then, you can apply lower-tech, yet effective measures to assist your customers whose payments get declined.  

• Create a page on the website where the most common errors are explained, together with recommendations on what to do in case they happen.
• Send a follow-up email to customers who were declined and offer useful advice on how to complete the payment.
• Provide training to customer service representatives on how to handle authorization errors.

Since the financial industry has not yet figured out a reliable way to reduce the prevalence of false positives, taking the matter into your own hands can truly make a difference. If used consistently, these techniques will help you reduce the negative impact of credit card declines.

Conclusion

Customers experience false declines when cards should have been approved but was declined because the bank was overly cautious about fraudulent transactions. Card declines cost you money but there are simple steps you can take to recapture sales.

Are card declines draining profits from your business?  

Contact info@paynetsecure.net today.

Choosing the right payment processing company is vital to the success of your business. 

There are no shortage of companies willing to offer you payment services  While many promise to be able to get you the processing volume and accounts you need, the reality of the situation is often quite different.  

A common scenario is when a company says they can set up your account.  Then weeks lead to months and the account is still not approved.  

Or, the account is approved.  Then cancelled quickly because your type of industry is considered high risk.  Or you need to process more volume.  Or any number of other reasons that end up with you not having the processing power you need to grow your business.  This reality become obvious after the you’ve  spent time and money in having the merchant account set up.

In order to avoid the unpleasant prospect of changing the merchant account company due to unsatisfactory service or its ability to meet your processing requirements, it is essential to make sure that your first choice in payment processing companies offers you everything you need to be successful.  

Security and Fraud Protection

When it comes to online payments, few issues are as vital as that of security. This importance results from the private character of the information customers are expected to provide before and during the payment process. Fraud is frequently discussed in relation to large online retailers, but the truth is that all businesses, irrespective of size, are vulnerable to fraud attacks.

The report released by Javelin Strategy & Research illustrates to what extent micro, small, and middle-market businesses fall victim to credit card fraud. No less than 52% of middle-market businesses had to deal with losses that resulted from fraudulent transactions. Whereas large retailers will attract more fraudsters compared with smaller businesses, the latter will find it more difficult to absorb the costs associated with fraud.

A payment service provider will be able to address the risk inherent to online payments only if it implements the most modern and reliable security measures. This involves fraud protection and PCI DSS compliance. This way, customers can rest assured that their payment information is secure, while businesses will be happy to know that the losses due to fraud will be kept at a minimum level.

Flexibility and Reliability

High risk payment processing is in a category of its own because of the resources required to manage the risk efficiently. It goes without saying that few payment service providers have the necessary capabilities to navigate the intricate, constantly changing online payment ecosystem which can be even more challenging for some high risk industries.

Picking a payment service provider that is poorly prepared or unwilling to deal with the risks of your industry means that they may discontinue the service or ask for unreasonable, frequently hidden fees and rolling reserves.

The list of requirements is already getting quite long, but there are some other, equally essential characteristics a payment service provider must have. The integration of the payment platform on the website has to be based on a straightforward process. In order to make sure that as many customers complete their payments, 24/7 customer service should be available. The last, but equally important feature of the service offer should be chargeback management, as its absence can lead to unnecessary losses for the merchant.

Conclusion

Investigate your payment processing options carefully upfront.  High risk merchants in particular need to be sure that the processor can handle your requirements.

One of the smartest strategies high risk merchants can deploy is to have more than one payment processing account.  In this way, you always have the processing volumes you need to manage and grow your business.

Looking for a reliable high risk merchant account provider?   

Contact info@paynetsecure.net today.

 

Satisfying your customers’ preferences drives sales.  

To gain the most from the continued growth of ecommerce, pay attention to what your customers want.

• Offer multiple methods to pay for goods and services.  Accept as many payment options as possible. Include ACH and card merchant accounts, echecks, mobile payments, e-wallets, and other ways to pay, if your customers use them.
• Make sure your sites are optimized for viewing on cell phone & tablets.
• Stay current on social media marketing and use its power to build your brand
• Offer ways to keep your customers safe from fraud
• Explore loyalty and rewards programs which encourage customers to visit your site often and to buy more.  

The Growth Potential of Online Retail

Forrester Research Inc. released the most recent, long-term estimation regarding the growth rate of the U.S. online retail sales.  By 2018, it is expected that the size of online retail will increase to $414 billion from $263 billion in 2013, based on a compounded annual growth rate of 9.5%. While in a previous study, Forrester estimated the size of online retail for 2017 to $370 billion, their most recent study increased the figure to $385 billion.

The study states that this growth is influenced positively by the increasing use of tablets and mobile devices for purchases. Also, consumers that are part of Gen Y (25-33 years old) have just entered into the periods of their lives when they are most active in terms of purchasing behavior. Due to their long-established familiarity with the online environment, they are expected to do most of their shopping online, with an average estimated spending of $563 in three months.

Alternative Payments 

Online retailers need to respond to the expectations of customers, particularly when it comes to payment options. Of

A recent consumer payment study conducted by Total System Services provides a snapshot of these expectations. The results of the survey show that consumers continue to prefer credit cards, with 48% of respondents expressing their preference for this payment method.

That means 52% of buyers want to pay you using a method other than cards.  

The most popular alternative payment option for US buyers is electronic checks. Millions of Americans regularly pay for goods and services with echecks.

When you accept echecks you get more sales from buyers that don’t have cards, are maxed out on cards, or who simply prefer to pay you with an electronic check.  

Echeck transactions are not subject to fraud in the same way as cards.  Providing an extra level of safety for customers.  

Satisfy your customers desire for alternative payments.  And get more sales.  

Devices & Social Media

New payment technologies, such as those facilitated by mobile devices and social media, present interest to consumers. When asked what payment-related features they would like to use on a mobile device, the highest ranked was those that prevented fraud, followed by rewards/loyalty features, and M-Wallet.

The study provides some insight into the connection between social media and payment behavior. While 53% of respondents stated that they do not pay attention to ads promoted via social media, 25% of them said that they decided to make a purchase solely based on the social media activity of a friend. These findings regarding the payment behavior of online shoppers can assist merchants in creating marketing strategies that can help them maximize their profits.

Conclusion

Catering the the buying habits and preferences of online shoppers is simply smart business.  

• Offer alternative payment methods such as echecks
• Optimize your site for cell phones, tablets & other devices
• Understand the power of social media

Are you interested in alternative payments which cater to the preferences of online buyers?  

Contact info@paynetsecure.net