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online payment processing

Strong Online Payment System Security on a Budget - Fighting Fraud

Ray Moorman

Even if you’re a small business with a tight budget, there are some must-haves for online payment system security that you simply cannot afford to go without. Neglect your processing security, and risk being vulnerable to fraud, a data breach, chargebacks and other costly misfortunes. Think of security features as an investment in your company’s future growth—since being a secure online payments acceptor will help to boost customer confidence and loyalty as well as mitigate the risk of your systems being infiltrated by fraudsters.

Be proactive in the fight against online fraud

If you process payments online, there are some relatively low-cost ways that you can protect your business, your brand and your bottom line from fraud. Today’s savvy online shoppers have learned to look for a padlock icon in their browser window and “https” in the website URL, so they know the site is secure. Don’t risk losing business by having systems that are unsecured. Here are some ideas to get you started: 

  • Payment Card Industry (PCI) compliance. Be sure that your company meets—and preferably exceeds—current PCI regulations. Doing so will ensure that you don’t get stuck with any penalties for not complying, as well as peace of mind that your business is protected.
  • Secure socket layer (SSL). An SSL establishes an encrypted link between the web server and your browser. This protects sensitive data that you transmit for online payments from being intercepted from fraudsters.
  • Digital security certificate. Qualifying for—and prominently displaying—a digital security certificate on your eCommerce shop will help provider customers peace of mind that when they shop with you, their data will remain private and protected.

Best practices for more secure, cost effective online payments processing

Unfortunately, fraud is likely to always be a danger when accepting credit card payments online. But, there are ways to reduce your risks. One easy way that will also save you money is by requiring your customers to enter more data when they’re making a purchase. To help reduce the chance of your interchange fees being “downgraded” (read: higher cost to you), consider requiring that all customers provide the following:

  • Complete billing address, including ZIP code
  • CVV security code
  • Voice authorization

Another way that you can address potential fraud and reduce your costs is by responding quickly to chargebacks and other disputed transactions. If you don’t respond quickly to a chargeback inquiry, you may be subject to a timeliness fee or you could lose the sale entirely.

Reduce your payment processing costs

There’s no escaping this fact: if you accept credit card payments online, there are fees you’ll have to pay. You may be surprised to learn that merchant credit card processing fees can vary by hundreds of dollars per month—or even more—depending on your sales volume and the merchant services provider you’ve selected. But, there are some ways you can be vigilant about your fees and take measures to reduce them.

Understanding the types of fees is a great way to start in reducing the costs of accepting credit cards online. Here are some of the most common fee types: 

  • Setup fees. In most cases, you’ll pay a setup fee when you begin processing with a new merchant services provider to cover the cost of setting up your services.
  • Interchange fees. Interchange is a fee that every merchant must pay; it is set by the credit card networks and split between the networks and the credit card issuing bank. Interchange is determined by a percentage of the transaction plus a per-transaction fee.
  • Monthly fees. Some merchant services providers charge a flat-rate monthly fee for handling your credit card processing.
  • Service fees. Some merchant services providers charge a flat-rate service fee—usually per month—for allowing your business to process credit card transactions online.
  • Termination fee. Depending on your specific agreement with your merchant services provider, you may be liable for a termination fee if you cancel your contract with them before a certain period of time has elapsed. Read the fine print when you sign your contract to ensure you don’t get stuck with a termination fee if you need to get out of your agreement early.

Keep detailed, accurate records of the above fees and regularly audit them to see if you need to consider changing your business rules and practices to help reduce the costs of accepting credit card payments online. Unfortunately, small to mid-sized businesses generally have less bargaining power when it comes to negotiating fees with their payments processors. However, you should always ask if there are ways you can reduce your costs of processing credit cards online and shop around with various processors before signing your contract.

Choose the right merchant services provider to stay secure

Ultimately, choosing the right merchant services provider for your company will go a long way in helping to protect your and your customers’ data—while keeping your costs of doing business low. All merchant service providers charge fees differently and offer various security features in package bundles. It’s worth it to take the time upfront to do your research about which payments processing provider will be best for your company—both in terms of security and pricing.

Although the holidays are over, merchants are still seeing the residual actions of holiday shopping. The first months of the New Year are always a time of returns and exchanges – and using gift cards to make new purchases. Always high on the gift list, virtual money makes the shopping process easy for the givers and the buying process easy for their receivers.

While gift cards have their perks for consumers, they also have big benefits for their respective businesses. One of the foremost advantages is that many cards go unredeemed, resulting in additional profits for retailers. In fact, $44 billion worth of gift cards has gone unused since 2008. (1)

Let's take a look at some of the reasons why businesses should continue to sell gift cards and implement a POS solution that accepts them:

Reduced price sensitivity

When customers are looking to make a purchase, they often have a mental limit regarding how much they want to spend for a particular item or an entire transaction. With gift cards, consumers are less sensitive to price because it feels like they're not using their own money. As a result, these consumers will look at more regular-priced goods and services instead of working their way through the clearance section. They are also more likely to exceed the amount on their gift card. (2) Since consumers are less worried about the expense related to the items they want when they're paying with virtual money, companies stand to make a higher profit.

Increased brand awareness

Companies are always looking for new and innovate ways to educate consumers about their businesses. With gift cards, the reward for a business is unmistakable. Whether it's the recipient requesting virtual money from a specific business the gift-giver has never heard of or the purchaser essentially recommending a new store to the future redeemer, gift cards attract new customers. The more these cards are dispersed among consumers and their peers, the more a brand can gain greater awareness.

Improved mobile versions

Customers understand the plastic gift card: with a swipe, they can redeem the amount of money that was purchased for them. However, now that consumers are becoming more comfortable with mobile-friendly shopping, more virtual money is finding a home through online platforms and contactless payments. With tools like Apple's Passbook, consumers can store gift cards on their mobile devices and quickly access them while in store.

This method enables shoppers to use their gift cards at any time since the money is always on hand. As a result, retailers can recognize the revenue gained from cards faster and may even see customers spend more than their allotted amounts. Additionally, virtual money is a strong way to attract new clients to an organization. Since the codes for redemption are usually emailed when uploaded onto mobile devices, businesses will gain the recipient's contact information, allowing for further communications to promote shopping incentives. (3)

From gaining brand awareness to attracting new customers to improving sales, gift card processing offers companies many advantages. Still, to get all of the benefits, organizations must first have the tools in place to make the rewards of gift cards possible. Implementing a gift card program and using the right POS system for accepting mobile payments, businesses can receive the gifts of virtual money all year long.

  1. http://www.cardhub.com/edu/gift-card-market-size/
  2. http://www.giftcards.com/gcgf/small-business-giftcards
  3. https://nrf.com/news/store-operations/the-future-of-gift-cards

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