Merchants and consumers are increasingly using virtual payment methods for online buying and selling to be easy, efficient and safe. The innovative technologies provided via CloudBanking have simplified business-to-business and business-to-consumer experience seamless with mobile payments, digital wallets, and contactless cards. As the online payment processing is becoming more popular, merchants are now adapting various payment methods and platform to remain competitive in the market. This has increased the demand for additional features in payment to facilitate a cashless society that can enable any purchase, such as vending machines. These demands create technical challenges for merchants and processing system.
This article explains five things Merchants need to know to avoid drawbacks on online payment. It presents the main challenges in online payment and how to overcome them.
Risk of Fraud and Chargebacks
One of the big challenges of online payment processing is payment fraud and data theft completed by cybercriminals. The offender deprives the victim of funds, personal data, property, interest, and sensitive information via the internet. Merchants rely on electronic transactions to charge customers for products and services, and this resulted in an increase in fraudulent activities. However, there are fraud-monitoring tools such as geolocation, fraud scoring, and proxy piercing. A certified level 1 Payment Card Industry Data Security Standard (PCI DSS) payment processor delivered by CloudBanking can sniff the fraud before it occurs.
Chargebacks, on the other hand occur when customer raises a dispute in connection with a card transaction. This can damage business reputations and lead business to shut down. With the focus on making online transactions safer, 3-D Secure is designed to provide an additional layer of security for eCommerce transactions. It enables the exchange of data between the merchant and card issuer to validate that the transaction is being initiated by the real owner of the account.
Moreover, technologies such as EMV (Europay, MasterCard and Visa) and biometric identification are also widely used by payment service providers to reduce fraud and chargebacks. EMV technology is used to validate that a payment card is genuine and facilitate the authorization of the transaction. Similarly, biometric identification is a powerful tool for fraud prevention, as it ensures the person performing the transaction is truly authorized to do so.
When merchants are operating internationally, it is crucial for them to accept payments across all countries that they are targeting. Global payments can be slow, inefficient, and expensive due to uneven development in technologies and software platforms. Therefore, merchants need to consider working with online payment service providers (PSP) that can provide a global secure payment gateway. CloudBanking allows funds to be securely passed between customers, merchants, and the issuing banks. It validates the payment and encrypts the sensitive financial data that is being transferred between the relevant parties. Moreover, PSP can make cross-border transactions a seamless experience for both merchants and customers via currency settlement.
Development of innovative technologies are focused to shape global payment requirements. The emerging transnational system has helped to reduce the reliance on correspondent networks by delivering fully integrated solutions and technical requirements. Similarly, economies of scale will provide cost advantage for businesses as it lowers fixed cost with a benefit of consolidating credit risk.
Payment Card Data Security
Data security is necessary for merchants to understand and implement standards for security policies, technologies and ongoing processes that protect the payment systems from breaches and theft of customer data. It is required for any businesses accepting credit or debit cards and online payment. Laid out by PCI security standards, Payment Card Industry Data Security Standards (PCI DSS) protect systems against malware and update antivirus software. PCI DSS standard urge merchants to meet 12 requirements categorized as six domains
- Build and maintain a secure network and systems
- Protect cardholder data
- Maintain a vulnerability management program
- Implement strong access control measures
- Regularly monitor and test networks
- Maintain an information security policy
Payment security is paramount for any merchant that stores, processes or transmits cardholder data, This can be done by acquiring PCI DSS Level 1 certification or using a payment service provided by CloudBanking.
Multi-currency and Payment Method
Accepting a variety of payment methods and currencies is one of the challenges for any global business. Digital payments such as e-wallets, mobile payments, and credit/debit cards help online merchants compete in international markets by allowing their customers to pay in their native currencies. However, merchants require new bank accounts, new business entities and new regulatory hunders on each national market. Selecting a reliable payment service provider with the necessary technology can provide effective and immediate solutions to those problems. Via PSP, a merchant can easily collect payment in one currency and credit the merchant account in its home currency.
Technology Integration System
Online payment system operates across hardware and software platforms. Virtual credit card and digital payment processors can be a challenge for online retailers due to a lack of interface knowledge between processing systems. It may further result in processing and payment delays, lost transactions and expensive fees.
Innovative integrated systems and payment gateways can play a major role in addressing liquidity issues and minimizing delay payments while preserving online transaction integrity. Cloudbanking arranges immediate processed transactions, thus avoiding the delays inherent in automated clearinghouse processes. Therefore, for seamless, easy and secure transaction process, online payment service provider is always a better option.