It’s virtually impossible for digital companies to handle every aspect of billing and payment in-house, so finding the right solutions provider is crucial to growing your revenue while lowering total costs to your business. You have some choices to make as far as this is concerned: You can use point solutions that address each piece of the puzzle individually or find more robust solutions that provide a cohesive ecosystem of tools that help you reach your goals.

To give you some context for some of the costs you might not expect in the area of billing and payments, we wanted to focus on the payment processing capabilities required to grow online revenue and the development resources needed to make sure everything is functioning smoothly.

Payment Processing: Important Considerations

Merchant of Record (MoR)

Managing relationships with payment processors, submitting associated credit card fees, and handling other administrative tasks around processing online transactions all have legal implications that, by default, fall on your business’s plate. Not all vendors will assume responsibility on your behalf as your merchant of record (MoR). To avoid significant fines, you would need to comply with PCI DSS standards and calculate, collect and remit taxes to relevant authorities.

Currencies and Payment Methods

To sell effectively in any market, you need to support your customers’ preferred currencies and payment methods. It’s just as important to not display any type of payment method that is irrelevant to that customer. It makes for a poor customer experience, and our data proves that offering only relevant payment methods raises conversion rates, even when those payments aren’t ultimately chosen by customers.

Relationships With Merchant Banks and Payment Service Providers (PSPs)

Negotiating and maintaining relationships with multiple entities can get complicated and expensive. And unlike a billing provider that has already has these relationships in place, you’ll need to build yours from scratch.

Country-Specific Payment Legislation

Some countries have passed laws that prevent money from leaving their borders. For example, in Brazil, your business can’t accept Brazilian real unless you have a processor and entity located within the country. If your legal business address is located anywhere governed by EU legislation, you are required to display an order confirmation page for your customers before they complete checkout. Because this is yet another opportunity for your European customers to abandon their cart, being aware of this page and optimizing it is critical for maximizing revenue.

Takeaway

A billing provider that acts as your merchant of record will manage your relationships with multiple merchant banks and PSPs as well as record and reconcile all of your transaction data. And because that provider has multiple clients, their transaction volume is much higher than yours. This means your business benefits from lower fees from PSPs. They’ll also support a plethora of regional payment methods and currencies, which you’ll require in order to optimize pricing for new markets.

Development and Integration: Important Considerations

Developer Resource Management

Will developers who are always busy with billing tasks have time to work on advancing your core service? It’s not likely, and your business could end up in the unfortunate position of having to delay improvements to your offering because billing takes up too much bandwidth. Or vice versa, you miss out on a lot of revenue opportunities because you don’t have the developer resources to implement or maintain your current billing solution.

Integration With Existing Business Systems

Consolidating customer data from your CRM, ERP, email platform and web analytics with your billing solution is necessary for a holistic look at your business performance — but it’s a complex development effort. As you research options for providers, make sure you understand how easily those providers integrate with your existing systems and what level of support they provide.

Transmitting Customer Data

There are serious risks with transmitting customer data between platforms, and your development team needs to know how to comply with ever-changing global privacy regulations. For example, do you support social sharing? If so, you should know that in August 2011, the European Data Protection Supervisor (EDPS) mandated the removal of post-purchase social sharing for online purchases in the EU. The very thing that increases customer acquisition in the U.S. can actually cost your business €50,000 in Europe!

Expansion Into New Markets

In order to grow your business, you need development resources focused not only on your current ecommerce efforts but also on global expansion. Each new market has its own set of regional specifications that require custom development.

Takeaway

In addition to freeing up developers to work on your core offering, a billing provider should be able to achieve full integration with your systems in a matter of weeks, rapidly accelerating your time-to-market. They will also process orders quickly (providing a positive customer experience) and securely transmit data in accordance with global privacy regulations.

To learn more about the hidden costs of global billing, check out our interactive microsite.

The post What Are Some of the Hidden Costs of Billing and Payments? appeared first on cleverbridge.

There are cases where it’s to your advantage to act as your own merchant of record. But there are also cases where accepting the responsibility of being the merchant of record has many disadvantages.

Going It Alone

Myth: It’s relatively easy to open a merchant account with an acquiring bank and install a payment gateway. Fact: The process for acquiring the ability to process even simple credit card transactions in just your local currency involves a lot of time and effort and maintenance. Banks must conduct financial audits, risk analyses, and investigations into what products you sell and what your chargeback rate will likely be. All these aspects influence the price and rate you receive on your gateway fee.

On top of the time, money and effort of getting up and running with simple credit cards in your domestic currency, there is also maintenance work to worry about. You need to make sure your customer and payment data is secure, that you’re collecting and remitting sales tax where it’s necessary to do so, that you’re handling customer questions about billing, managing refund requests and dealing with chargebacks. All of these things involve huge costs in the form of overhead and operational inefficiencies to your business.

The Difficulty of Going Global as Your Own Merchant of Record

If your business is growing beyond your domestic borders, being your own MoR in those cross-border regions gets even more difficult. To build a truly global payment infrastructure you have to deal with acquirers, not just once, but all over the globe with different rates for different currencies. And you need backups in place in case one goes down. I mean, how would you feel if you lost even just a few hours of orders?

From a MoR perspective, you’d have to set up all your international merchant accounts if you want to grow your global customer base. You need to handle payment contracts, not just for payment methods, but for currencies too. In fact, you need to sign contracts for each currency you want to offer your international customers. And because the typical software vendor does not process even close to the transaction volume that ecommerce providers do, the payment rates and fees for software companies will be much greater than if they found a reseller to act as MoR on their behalf.

Taxes

Your work doesn’t end once you sign all the contracts for offering payment methods and currencies to your global customers. So even if you are the MoR, you still have a lot of work to do before you can succeed globally. This is the part that many businesses don’t think about. The sales tax laws have been changing very rapidly around the world, and this is one the biggest challenges for digital goods companies. In the U.S., each state makes its own tax laws. Then each county. Then each city. Knowing what sales tax to apply to each transaction is very challenging.

That’s just the challenge of collection. Once you calculate and collect, how do you remit? You need to file for each jurisdiction and there are lots of opportunities to make mistakes. Now multiply that for different states where you have a tax nexus, economic or otherwise. And what do you do when you’re selling to German and Japanese customers? Or Aussies? Now what about Brexit? Gotta keep up!

Reconciliation

Acting as your own merchant of record also places a huge burden on your Finance department. For example, if you’re a software company and you get your gateway and merchant account for U.S. dollar transactions with VISA and MasterCard with one acquirer, you’ll need to reconcile your receivables at one rate with that acquirer and at a different rate with the acquirer you use to process Discover transactions.

What happens is that along with receiving your money into your merchant account, you get a long list of transactions. Then you have to reconcile the payments with the transactions. This presents an opportunity to really mess up your ledger, because you have to reconcile your payment from the acquirer according to every rate based on the type of credit card your customers use.

Ecommerce providers who act as resellers on your behalf will do all the reconciling for you as a MoR. All you have to do is wait for the cash in your accounts. Without that expertise, you have to spend lots of time and resources trying to see what you pay per transaction.

MoR is Key to Customer Experience

So why does any of this matter? Well, if you want to expand your business globally, and you want to provide those global customers with superior customer experiences (these are both excellent goals, btw), executing on MoR is key. The challenge is that most businesses simply don’t have the expertise to do that. And even if they had that expertise, they don’t necessarily have the development, business operations or financial resources to bring that expertise to life.

That’s where ecommerce providers and resellers come in. Resellers assume the entire burden of opening up merchant accounts, installing payment gateways, signing contracts for all the payment methods and currencies you need to accommodate global customers. They also assume responsibility for managing tax collection and remittance, maintaining data security, and reconciling your financials, leaving you to develop better products and a better business.

Without this infrastructure in place (and it takes a long time to get it in place when you’re on your own), your chances of growing global revenues are slim. More likely, you’ll be offering the wrong customer experience, many valid transactions will be declined by the card issuers, your conversion rates will go down, and your transaction fees will go up.

Keystone

What’s important to you? Is it to have cost certainty? To expand globally quickly in a compliant way? Or is it important for you to devote resources to doing it yourself?

If your goal is to expand into other markets, doing it as your own merchant of record means diverting resources from your product innovation and customer acquisition efforts.

Looking to acquire global customers and grow you global revenue streams? Reach out to cleverbridge today!

The post The Difficulty of Being a Merchant of Record appeared first on cleverbridge.

With an array of options, it can be easy to get locked into a provider that doesn’t meet your company’s specific requirements. Or, even worse, the wrong solution becomes a limiting factor in responding to future shifts in products/services, pricing or market opportunities.

Depending on your current infrastructure and in-house expertise, you’ll have to decide between building or buying a solution to handle payments, subscription management and other miscellaneous ecommerce capabilities.

Building a solution on your own takes a lot of planning, development and maintenance. So when you choose to implement a commerce solution, you’ll be looking at three main categories of providers:

• Billing / payment solutions
• Subscription management solutions
• Full-service solutions

We will explore the first category in this post, and then we will follow up with our analysis of the other two types of commerce solutions in future posts.

Category: Billing / Payments Tools

A payment gateway provides the technology to securely capture and transfer credit card information from a website shopping cart to the merchant account. A merchant account handles the financial processing of the credit card transaction with the banks and card brand (VISA, MasterCard, etc.). It is very typical to have one company supply the merchant account and another supply the payment gateway because very few companies supply both services under the same roof. Some payment gateways have even evolved to offer simple recurring billing features.

Use Case

This solution can be the best option for small businesses and startups that don’t have the volume to obtain a merchant account or for companies with largely physical goods looking to experiment with digital business models. If you’re doing simple plan-based billing, then you’ll be pleasantly surprised at how quick and easy it can be to configure one of these gateways to do just that.

Many payment and billing platforms have been fine-tuned over decades to support the core commerce management of one-time purchases of physical goods.

Some of them have even evolved and launched simple recurring billing modules on top of their payment gateways. This solution can be the best option for small businesses and startups that don’t have the volume to obtain a merchant account or have simple subscription needs, or for a company largely selling physical goods looking to experiment with simple digital business models.

Unfortunately, the management of subscriptions can be quite complex in the digital world. Subscription models used by companies like Salesforce offer customers different levels of functionality for a variety of prices per seat, per month.

Scheduled flat fees might not be too complicated to calculate, but what happens when a customer adds or cancels seats in the middle of the billing period and prices need to be prorated for partial months? Or the credit card on file expires and renewal billings fail? What’s the tax rate on that service? Can you track each plan’s churn rate?

Moreover, usage-based subscriptions require billing unique amounts with each renewal, which requires a system to calculate usage.

Subscriptions also require advance customer notifications in order to reduce churn and keep cash flowing. As you can probably imagine, the complexity of managing subscription information for thousands – or even millions – of customers increases exponentially.

In these cases, a payment or billing platform falls short.

Because many of these solutions were born out of the one-time purchase world, they can lack the specific or robust subscription capabilities to support business models built around digital goods or services. If you’re not looking to develop those capabilities in-house, the next two solution offerings might be a better fit.

Keystone

A billing/payment solution can be the best option for companies of all sizes with simple digital business models as it’s the cheapest option to get you started with accepting basic recurring payments. However, if you’re going to offer a complex or high volume subscription product which requires robust subscription and recurring revenue capabilities, you will be better served with one of the two following options.

For a sneak peek at the other two types, check out Navigating the Solutions Landscape.

Ryan Greives is the Public Relations Manager at cleverbridge.

The post Evaluating Commerce Solutions: Billing and Payment Tools appeared first on cleverbridge.

It’s virtually impossible for digital companies to handle every aspect of billing and payment in-house, so finding the right solutions provider is crucial to growing your revenue while lowering total costs to your business. You have some choices to make as far as this is concerned: You can use point solutions that address each piece of the puzzle individually or find more robust solutions that provide a cohesive ecosystem of tools that help you reach your goals.

To give you some context for some of the costs you might not expect in the area of billing and payments, we wanted to focus on the payment processing capabilities required to grow online revenue and the development resources needed to make sure everything is functioning smoothly.

Payment Processing: Important Considerations

Merchant of Record (MoR)

Managing relationships with payment processors, submitting associated credit card fees, and handling other administrative tasks around processing online transactions all have legal implications that, by default, fall on your business’s plate. Not all vendors will assume responsibility on your behalf as your merchant of record (MoR). To avoid significant fines, you would need to comply with PCI DSS standards and calculate, collect and remit taxes to relevant authorities.

Currencies and Payment Methods

To sell effectively in any market, you need to support your customers’ preferred currencies and payment methods. It’s just as important to not display any type of payment method that is irrelevant to that customer. It makes for a poor customer experience, and our data proves that offering only relevant payment methods raises conversion rates, even when those payments aren’t ultimately chosen by customers.

Relationships With Merchant Banks and Payment Service Providers (PSPs)

Negotiating and maintaining relationships with multiple entities can get complicated and expensive. And unlike a billing provider that has already has these relationships in place, you’ll need to build yours from scratch.

Country-Specific Payment Legislation

Some countries have passed laws that prevent money from leaving their borders. For example, in Brazil, your business can’t accept Brazilian real unless you have a processor and entity located within the country. If your legal business address is located anywhere governed by EU legislation, you are required to display an order confirmation page for your customers before they complete checkout. Because this is yet another opportunity for your European customers to abandon their cart, being aware of this page and optimizing it is critical for maximizing revenue.

Takeaway

A billing provider that acts as your merchant of record will manage your relationships with multiple merchant banks and PSPs as well as record and reconcile all of your transaction data. And because that provider has multiple clients, their transaction volume is much higher than yours. This means your business benefits from lower fees from PSPs. They’ll also support a plethora of regional payment methods and currencies, which you’ll require in order to optimize pricing for new markets.

Development and Integration: Important Considerations

Developer Resource Management

Will developers who are always busy with billing tasks have time to work on advancing your core service? It’s not likely, and your business could end up in the unfortunate position of having to delay improvements to your offering because billing takes up too much bandwidth. Or vice versa, you miss out on a lot of revenue opportunities because you don’t have the developer resources to implement or maintain your current billing solution.

Integration With Existing Business Systems

Consolidating customer data from your CRM, ERP, email platform and web analytics with your billing solution is necessary for a holistic look at your business performance — but it’s a complex development effort. As you research options for providers, make sure you understand how easily those providers integrate with your existing systems and what level of support they provide.

Transmitting Customer Data

There are serious risks with transmitting customer data between platforms, and your development team needs to know how to comply with ever-changing global privacy regulations. For example, do you support social sharing? If so, you should know that in August 2011, the European Data Protection Supervisor (EDPS) mandated the removal of post-purchase social sharing for online purchases in the EU. The very thing that increases customer acquisition in the U.S. can actually cost your business €50,000 in Europe!

Expansion Into New Markets

In order to grow your business, you need development resources focused not only on your current ecommerce efforts but also on global expansion. Each new market has its own set of regional specifications that require custom development.

Takeaway

In addition to freeing up developers to work on your core offering, a billing provider should be able to achieve full integration with your systems in a matter of weeks, rapidly accelerating your time-to-market. They will also process orders quickly (providing a positive customer experience) and securely transmit data in accordance with global privacy regulations.

To learn more about the hidden costs of global billing, check out our interactive microsite.

The post What Are Some of the Hidden Costs of Billing and Payments? appeared first on cleverbridge.

To learn more about increasing revenue and reducing risk in the global marketplace, download our Six Guides on Ecommerce Essentials today.

EMV Chip Card Implementation

Feud Heats Up Over Chip Cards, FBI Warning | Computerworld

As we noted earlier in the month, new EMV Chip Cards are now in consumers hands, with implications for brick-and-mortar and online merchants alike. The security feature devised in Europe is meant to reduce the risk of fraudulent card transactions. The EMV cards generate a unique code associated with each transaction and are designed to work with a PIN. Whether or not to require consumers to use a PIN with their new cards has been causing some friction between banks and retailers, as detailed in this article from Computerworld.

The crux of the disagreement centers on how retailers and card issuers balance security and convenience. “The banks and card companies have come out against PINs in the U.S., saying that other technologies, such as encryption and tokenization, along with using a microchip-embedded card with signatures, would be more effective in fighting fraud than PINs. Retailers favor PINs, arguing that PINs will reduce fraud not only for lost and stolen chip cards, but also for online and telephone transactions.”

The difference between the two industries came to the fore over their disagreement with an FBI advisory statement about how to use the cards. Their original message contained several references to PINs, angering card issuers. The FBI quickly revised their statement.

Singles Day

What It’s Like To Watch Alibaba’s Singles Day Spectacle | Fortune Magazine

As American and other Western retailers dive headlong into the Black Friday and Cyber Monday kickoff to the holiday shopping season, we are weeks behind China and their instant holiday, Singles Day. The big player behind making Singles Day into an ecommerce phenomenon is Alibaba, headed by their eccentric and intriguing chairman, Jack Ma. While not every CEO may wish to emulate his style, Ma’s uncanny ability to raise revenue makes him a global role model.

When he wasn’t being interviewed by the President of the United States of America at the Asia Pacific Economic Cooperation summit in Manila, Ma could be found at Alibaba’s extravagant Singles Day Gala. Fortune Magazine sent reporter Scott Cendrowski to experience the day, which he describes as feeling, “similar to China’s campy Spring festival program, which commands higher ratings than the Super Bowl, but with a more commercial feel.”  The night included performances by none other than Adam Lambert, game show style contests between Chinese celebrities dressed in red or black, and a New Years Eve style countdown to midnight: the start of Singles Day.

Over the next few hours, it became clear that Alibaba won too, smashing previous sales and analyst predictions. As Cendrowski notes, “A communications person from Alibaba’s Alipay affiliate explains that in the first minute of selling, the payment system handled 85,900 transactions per second. Alipay was hoping to break Mastercard’s previous record of 60,000 transactions a second. Singles Day is shaping up to be the record day Alibaba hoped.”

By the end of Singles Day, Alibaba boasted $14.32 billion in sales in one day. The scale of business is a bit mind numbing. Econsultancy shares these 10 eye-watering stats, including the fact that “71% of Alibaba’s Singles Day sales came from mobile devices.”

If done right, there is no reason why Singles Day need remain solely a Chinese affair. eMarketer interviewed  Melissa O’Malley, director of global merchant and cross-border trade initiatives at PayPal, to explore opportunities and best practices for cross-border ecommerce with China. She admits that, “When I started at PayPal 18 months ago, nobody had heard of Singles’ Day.” The rapid rise of the holiday and its ecommerce trappings may inspire companies to try to get into the game, but O’Malley cautions reminds retailers how peculiar online marketing is in China. “Understanding the dynamics of the Chinese social media landscape is very important. It is so different from what Western retailers are used to doing. It’s just night and day. There’s no YouTube. You can’t just buy everything on Pinterest.”

Global Compliance

Life After Death (of Safe Harbor) – EU Data Protection in the Wake of Schrems | Cyber Law Monitor

Any business with operations, customers or data within the European Union or European Economic Area is grappling with the fallout from the European Court of Justice’s recent ruling that effectively ended the US-EU Safe Harbor agreement. In short, Safe Harbor was a framework agreement that allowed US companies to comply with customer data protection laws in the EU. Owing to recent government surveillance scandals in the US, the ECJ ruled in the Schrems case that Safe Harbor was not sufficient to protect EU citizens’ data. This change may expose companies to major compliance risks with hefty penalties.

The post above from Cyber Law Monitor examines temporary recommendations from the European Commission, which “offers alternative methods for compliance with EU data protection laws, while also highlighting the efforts the Commission is taking to develop a renewed and sound framework for personal data transfer to the U.S.”

Moving froward, no business has a clear idea yet of how the future of trans-border data will work. BNA shares this interview with expert James H. Koenig, who was a panelist on a recent Bloomberg Law webinar on the demise of the Safe Harbor Program. He recommended a keep calm and carry on approach.

“Despite the uncertainty, all companies are doing something on a risk basis in light of the ECJ’s decision. Some are moving ahead to devise a global solution without awaiting or depending on the promised Safe Harbor 2.0. Others are taking interim measures. The appropriate approach varies, depending on the type of company and the sensitivity of the data at issue.”

Keeping up with constantly changing rules and regulations can be a drain on a company’s resources, but the risks of non-compliance are high. UK authorities recently slapped publisher Trinity Mirror with a fine totaling over £70,000 for a VAT payment that was sent only one day late.

This decision could be a sign that regulators are taking a closer look at businesses, and expert Meera Rajah says, “It is really important that businesses recognize and understand the potential impact of either late submission or late payment…To avoid such a mishap, it is imperative that you understand the solutions available and keep on top of your VAT returns.”

To learn more about increasing revenue and reducing risk in the global marketplace, download our Six Guides on Ecommerce Essentials today.

The post November Ecommerce Digest appeared first on cleverbridge.

Online sales are an important opportunity for growth. Online merchants face a number of technical hurdles that they’ll need to confront in order to accept payments from their customers over the Internet. The more you understand the complexities of accepting payments online, the better you can steer your company to the best payment solution for you.

In this article we’ll cover some of the basics of online payments, shopping carts, payment gateways, and some helpful tips on how to choose your merchant account provider.

How Do Online Credit Card Payments Work?

In order to accept payments online, a business needs three key elements: a shopping cart, a payment gateway and a merchant account. Businesses can work with a single merchant account provider to set up their cart, gateway and merchant account, or may contract with separate providers for each feature independently.

A shopping cart allows customers to verify the items they want, and to enter payment and personal information. Once they enter their credit card information in the company’s shopping cart, that information is immediately received by the payment gateway. The gateway verifies the payment data and transfers this information from the merchant bank to the issuing bank or processor over a secure and encrypted Internet connection. This process assigns the business’s merchant account ID to the transaction, crediting the sale to them so that they ultimately receive payment.

What Is a Payment Gateway?

Aside from having a shopping cart, a business that wishes to take payments online must also have a payment gateway integrated with their cart. The payment gateway is a stand-alone piece of software that serves as a secure link between a company’s website, its merchant account and a customer’s issuing bank. Typically, a merchant account provider will deliver the merchant a payment gateway, but merchants with very specific needs may obtain one independently from a payment gateway developer. However, most merchant account providers offer an array of integration options for shopping cart software that will meet a company’s specific needs.

What Is a Merchant Account?

In order for a retailer to offer credit card processing options to their customers, they cannot simply obtain a contract with card issuers directly. Rather, they must obtain a merchant account with a merchant account provider. Since the credit card companies do not contract directly with merchants, a merchant account provider acts as a middleman connecting a business to the credit card companies.

Once a business has contracted with a merchant account provider, who in turn has a contract with the credit card issuers, the merchant can begin accepting payments by credit and debit cards. There are several merchant account providers out there to suit a given businesses’ processing needs, but most attempt to distinguish themselves by offering unique features or underwriting guidelines. So before seeking out a merchant account provider, a business should first determine its specific needs.

Factors may include how a business plans on accepting credit cards (e.g. point of sale, mobile phone or tablet, phone order, or ecommerce), which types are credit card brands a business plans to accept (e.g. MasterCard, Visa, Discovery, Amex, etc.), and if a business requires additional processing features such as online processing gateways, accounting software integration, gift card processing or chargeback prevention packages.

How Do I Choose a Merchant Account Provider?

Merchant account providers tend to distinguish themselves in three ways: the types of payment gateway integration they provide, variety of payment options available, and the security features they support.

There are a few types of payment gateway integrations to choose from. The two most popular types are known as direct integration and third party payment processing. Direct integration seamlessly integrates a businesses’ shopping cart with the payment processor. This means that customers stay on the same website for their entire transaction. The fees for this option are slightly higher, but is preferred by most merchants because of the seamless checkout process it offers customers.

With third party payment processing, the customer is directed to the payment processor’s website to complete their order. Once the payment is approved, the customer is then automatically returned to the company’s website. Though this option tends to be less costly for merchants, some customers feel nervous providing payment information to a separate checkout site, which can increase your cart abandonment rate.

Whichever type of gateway a company chooses, they should make sure that it supports all of the credit cards and currencies your company plans to process. This is especially important if a business plans on selling internationally, or works in an industry, such as energy or healthcare, where customers often use niche types of credit cards.

Merchant account providers further distinguish themselves via the security features they offer. Most use a trusted source to meet payment data security compliance standards, such as PCI-DSS. This ensures that a cardholder’s data is protected and maintained through a secure network. PCI-DSS is the industry standard and is becoming ubiquitous. A company should, at any rate, verify the compliance standard with a potential merchant account provider before agreeing to use their gateway.

Processing payments online is one of the quickest routes a business can fall victim to fraud, often through chargebacks. For this reason, many merchant account providers specializing in online and ecommerce businesses offer additional services designed to reduce or avoid chargebacks. These services include providing gateways that use security card codes (CVC2 and CVV2) to verify a customer’s possession of a credit card during an online order. This feature can limit the amount of transactions processed by credit card thieves in possession of a stolen credit card number and not the physical card itself.

Additionally, an address verification system (AVS) can help a business identify suspicious orders processed with inconsistent address data. AVS matches the customer’s credit card billing address with the address provided at checkout. Gateways and processors differ significantly in the number of chargeback and fraud prevention measures they offer. If a retail business is prone to fraud or sells big ticket items, make sure to select a processor that will assist in minimizing fraud and chargebacks.

Conclusion

By enabling online payment processing, businesses can expand their customer base geographically and demographically. In an era of compressed margins and increased competition, having the opportunity to expand their market reach is well worth jumping the hurdles necessary to accept online payments. With the right provider, your customers will rest assured that their data is safe, and your business can expand with confidence.

Learn more about the complexities of managing online payment processing by downloading our complimentary white paper. 

The post Online Payment Processing 101 appeared first on cleverbridge.

This is great news for brick-and-mortar retailers. EMV chip cards come equipped with a security chip, or smart chip, that must be scanned and authorized with each transaction. The chip interacts with the merchant’s point-of-sale device to make sure the payment card, combined with a PIN or signature, is valid and belongs to the person using the card.

As of October 1, 2015, businesses that do not accept EMV-enabled card transactions are liable for any counterfeit or fraudulent transactions.

This infographic from BluePay provides an overview of how the process works for physical stores.

But what does this mean for online merchants? As we discussed last February, this shift to more secure card-present transactions will have an impact on ecommerce sites. As fraudsters are hindered at brick-and-mortar stores, they will turn their attentions to card-not-present (CNP) transactions online.

During the first 10 years of its transition to EMV chip card technology, the UK saw online fraud increase almost 40 percent.

“Well, if fraud from card-present situations is harder to commit, we can safely assume that fraudsters will move to the online and mobile payment space and try to figure out where there are holes to exploit,” says Tim Russo, Fraud Prevention Team Leader at cleverbridge. “Be as prepared and proactive as possible,” Russo says. “This change is ultimately for the best.”

Leave a comment below about how the shift to EMV cards affects your business, and read more about the value of fraud prevention here.

The post Ecommerce Eye Candy — EMV Chip Cards [Infographic] appeared first on cleverbridge.

And I can prove this to you. Find your nearest colleague and either try to explain to them the details of an ecommerce transaction or have them try to explain it to you. I am sure that most people will say something like, you go on the website, you fill out your personal information, including payment details, and click Buy Now. Voila: you’ve got yourself an ecommerce transaction.

But as an ecommerce manager you need to have a better understanding of the back-end processes of an ecommerce system if you want to ensure that you’re maximizing revenue and minimizing costs. This knowledge is especially important when you’re considering a switch to a new ecommerce platform. It means having a more nuanced understanding of the technology, tools and processes involved in transferring payment information from buyer to seller.

Merchant Account Vs. Payment Gateway

Two of the basic components that allows different parties to exchange payment information online are merchant accounts and payment gateways. To the uninitiated, these terms are mysterious, but a proper understanding of what they do and why you need them can help you lower costs as you expand into global markets.

For further information on this topic check out the infographic below or read our cobweb clearing white paper: Managing the Complexities of Online Payment Processing.

The post Ecommerce Eye Candy – Merchant Account Vs. Payment Gateway [Infographic] appeared first on cleverbridge.

“The result [of online credit card declines] is consumer aggravation, increased operational costs for banks and credit card companies and as much as $40 billion in lost revenue for online retailers.” via TrustInsight

A Credit Card Decline

One of the primary benefits of selling software through a webstore is that visitors can shop at your store 24/7 without you having to manually operate the cash register for every sale.

Since most of your ecommerce revenue from U.S. customers probably comes from credit card payments, you need to make sure that their payment experience in your checkout process is both efficient and secure. This infographic from TrustInsight, based on a report called Measuring Consumer Attitude on CNP Credit Card Declines, explores the effects of credit card declines on merchants and and their online shoppers.

In a best case scenario, the effects of restrictive order screening is an increase in customer contacts, who consume valuable customer service resources in order to complete a process that should take mere seconds. In a worse case scenario, you’ve lost a customer after they already decided to pay for a product.

A Note About Fraud Prevention

One of the last things you want to report is a rise in refund or chargeback rates, especially if it is due to an increase in fraudulent orders made with stolen credit cards. However, you also don’t want to report a decrease in your order volume because you have been too cautious in the orders you screen.

Part of your fraud prevention strategy is finding the golden mean for declining orders. Too many unwarranted declines and you risk leaving money on the table as well as developing a reputation for providing a poor customer experience. Too few, and you open yourself up to a world of refunds and chargebacks from irate consumers.

Therefore, one of your more important assets is a knowledgeable fraud prevention team empowered to look at any transaction and make the most effective decision regarding its security.

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Creating an online software business means that you have to accept payments. They are the lifeblood of any business. Payments are what turn hobbies into businesses.

Now generally speaking, payments are a straightforward affair. First a seller offers a product to a buyer at a certain price. The buyer agrees to the terms of the transaction and submits payment to the seller. Then the buyer grabs his product and goes home happy.

But the Internet made submitting and collecting payments a little more complicated than the familiar experience above. The agreement to transact occurs between buyers and sellers who never speak to each other face to face. Internet transactions also rely heavily on machine automation to transfer funds from seller to buyer.

Every business has an obligation to ensure that their customers can shop in an easy and familiar way. But that which is easy and familiar in the U.S. is not necessarily so in Germany or Japan, and vice versa. Ensuring that transactions can happen between any two parties anywhere on Earth in a way that is familiar to each party is no easy goal.

If you are an ecommerce manager, or if you are responsible for ensuring the success of your company’s online store, read this informative white paper. It explains the complex environment of online payment processing, complete with an an introductory guide to the subject as well as a brief explanation of the major players and processes involved in an Internet transaction. It admonishes those selling online to remember that safety comes first and explains how to protect your business from fraudsters. It also offers merchants inside information on negotiating with merchant acquirers and payment service providers, and encourages merchants to think globally about the local payment methods they offer to their customers.

Get this complimentary white paper for an in-depth appreciation of the online payment processing landscape!

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