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5 Common Myths about Merchant Accounts Processing That Can Lead You Astray

Category: Growth Hacks

5 Common Myths about Merchant Accounts Processing That Can Lead You Astray
Mohab Growth Hacks 0

5 Common Myths about Merchant Accounts Processing That Can Lead You Astray

When the matter is about monetary transactions on your e-store, suspicion is always there. After all, you are bestowing someone else with the responsibility of handling your customers’ money. Then there are concerns whether transactions are secured against fraudulent attempts or not?

Various myths regarding merchant accounts processing have been circulating in the merchant community. If you are planning to open a merchant account with a payment solutions company, you should know about the common myths that may negatively influence your decision. Let us take a look at them.

All Payment Processing Operators Are Scammers

There are many credible service providers who provide quality services. Their terms of service will be crystal clear. Moreover, they will not have long-term contracts that will unnecessarily bind the merchant for a long tenure. They will let you know about all type of charges beforehand.

The Biggest Is the Most Trustable

You must have heard about the established online payment platforms that are visible everywhere – in search engine ads, on social media, and in renowned blogs. Even some of your merchant friends must have told you about them. But guess what, the biggest is not always the best. There are other service providers who may offer better services at affordable prices.

The lesser-known merchant account processors are more committed to providing personalized solutions to the merchants. They may have a secure procedure for processing payments, may provide services at the best rates, may have better enterprise-level hardware and software, and may take less time to initialize the setup. So yes, you should be willing to consider payment service providers who haven’t made it big yet.

Processing Charges Are Too High

Most of the times, merchants are not aware of the processing charges. Moreover, they assume them to be very high, based on rumors. But this is not true. Depending on the business turnover, you can decide to opt for payment processing services. If you have a massive turnover, it is advisable to opt for a merchant account with a unique merchant number. If you are a small business merchant, opt for a payment service provider that enrolls you in a shared merchant account setup.

Yes, there are charges associated with merchant account service providers such as termination fees, interchange-plus or flat rates, retail rates, monthly charges, and so on. But if you consider your transaction volume, the charges may not be that much. However, discuss with the service provider before finalizing the contract.

They Are All the Same

No, they are not. There are three types of payment processing companies – merchant account providers, payment service providers, and payment gateway providers. The merchant account provider is basically concerned with providing a merchant account and it may also provide payment processing service with the assistance of a third-party processor. The payment service provider does not offer a dedicated merchant account. Instead, it clubs your business with other businesses on a single merchant account.

The last one, payment gateway providers may either provide both merchant account and payment processing or provide only payment processing service. As you can see, they are not at all the same.

Not Better Than Local Banks

Banks do not offer reliable merchant account services, which are necessary to operate a business seamlessly. They will not provide you with the freedom to collect payments via various means, the hardware and software may not match the industry standards, and there is no reliability when it comes to backend support. Processing charges might be low but services are not always up to the mark.

Conclusion

You should not be guided by myths and rumors. Get hold of the facts before making your decision. This was our attempt to clarify some doubts so that merchants like you can make decisions that are beneficial for their business.

8 years ago
Why Do Refunds Take So Long?
Mohab Growth Hacks 0

Why Do Refunds Take So Long?

Online transactions have made life quite easy. We transfer funds, buy things and pay for them, receive payments, and all of this with the simple click of a button. Cash is rarely required anywhere. Online or cashless payments have become quite ordinary. The only time that online transactions frustrate us is when our money gets stuck! But like most out of the ordinary things, we must regard it as an exception.

Most online portals have simple refund policies. The process of raising a refund request is quite convenient; however, there are instances when the process is delayed due to some reason. In order to better understand this process, let us look at detailed insights.

When does the need for a refund arise?

  • When you make an online purchase and pay through your card but later decide to cancel or return the ordered item
  • When you are in the middle of making an online payment and you lose network connectivity

Why do payments fail?

  • Failure in communication – At some point in the payment making process, if there is a failure in communication after the customer has been charged, the customer can ask for a refund. This usually occurs in most cases due to network or connectivity issues and is a rather common occurrence.
  • Failure in a status update – Another reason for the failure of payments is the status of payment not getting updated. In such a case, even though the payment has been deducted, one or more of the banks involved fail to update the status. Since the payment gateway has no information, no information is available to the buyer or seller.

Why getting refunds takes time?

Firstly, the merchant usually needs a certain amount of time to determine whether the request for refund is legitimate or not. In cases where goods are returned, the merchant would like to make sure that the goods have not been damaged by the other party.

Secondly, the banks have a vested interest in keeping your money with them for as long as it is legally possible as they make interest off of that money. That is part of the reason why the bank charges your account immediately while delaying the refund to your account. In these cases, the merchant is able to provide the customer with an authorization code that can be used to hasten the refund process with the bank.

Thirdly, refunds take time because there are multiple online payment platforms involved. The process of authorization can be quite cumbersome. A slight delay at any stage further delays the entire process. To explain the refund process further, let’s take an example.

A customer raises the request for a refund. This request will be made to the payment gateway involved. The payment gateway then sends a request to the acquiring bank with which the merchant has an account. After the necessary approvals, the acquiring bank raises a request with the customer’s issuing bank. The entire process of authorization and re-authorization, despite the fact that no actual money is transacted, is a tedious one.

The bottom line

It is important to maintain your calm and understand how the process of refunds works. The movement of money in an online transaction, while faster, is sometimes hindered due to the complexity of the process. The entire process of online payments is monitored by the online payment gateway, the issuing bank, and the acquiring bank.

It is really up to the banks to approve and reflect the balance in their respective accounts. While no money is actually moving, the coordination between the two banks and the gateway determines the amount of time that the entire transaction takes.

8 years ago
How to ensure fraud and chargeback prevention
Mohab Growth Hacks 0

How to ensure fraud and chargeback prevention

Fraud and chargeback claims can malign your reputation, eventually resulting in loss in your business. In order for merchants to safeguard themselves against fraud and chargeback, it is recommended that they either choose a reliable and secure online payment platform available in the market or hire professionals to handle cases of chargeback and fraud within the company. Before we discuss the strategies for fraud and chargeback prevention, let us look at the definition of chargeback.

What is a chargeback?

Chargeback refers to an appeal made by a cardholder/consumer against fraud committed by a merchant. The appeal is made to the issuing bank. The bank deducts said amount from the merchant until the merchant is able to collect enough evidence to prove his/her case, in which case the money is returned. In some cases, the cardholder may issue a second chargeback known as pre-arbitration. This occurs when a consumer is determined to prove that he/she has been a victim of fraud at the hand of the merchant.

Let us discuss certain principles and restrictions that a merchant should look into in order to prevent fraud and chargeback.

Restriction on the number of payment attempts

Most online transactions happen through an online payment gateway. One way to minimize the risk of chargebacks is to impose a restriction on the number of times a cardholder can attempt to make a payment. Additionally, the number of purchases made through one card in a day can also be restricted. This simple principle can help you reduce the risk of chargebacks and even prevent the problem from occurring altogether.

Restrictions with regard to email

It is often found that people who come with an intention of committing fraud use multiple email addresses to make purchases using the same card. A merchant must monitor the cards that are linked to multiple email addresses. This may seem like a rather simple way of dealing with it, but it can be a highly preventative measure. It is always better to catch them before the crime occurs.

Monitoring IP addresses

Technology now makes it possible to monitor IP addresses. This can work in favor of the merchant since they can monitor the addresses and find out the e-commerce history and reputation of a particular buyer. There are multiple restrictions that a merchant can apply, such as blacklisting a particular IP address.

Customer service

Credit card companies often offer chargeback notification as a service. This means that any time a cardholder raises a dispute, the merchant is informed simultaneously. By making use of this service and providing good customer support, it is oftentimes easy to address the customer’s issues. Prompt action in such cases can help prevent chargebacks and build better customer relations for the future.

Maintaining and updating records

It is always a good idea to maintain complete and up-to-date records of all transactions made by a cardholder. These records should include dates of purchase, the amounts paid as well as authorization information. These records can be very helpful while handling and fighting chargeback disputes.

Proper training of employees

Employees should be trained on how to handle card and non-card transactions. By enlightening them on the subject, the merchant can save himself/herself from fraud altogether. Verifying signatures, requiring complete card information, etc. are just some ways that fraud can be prevented. As the popular adage goes ‘prevention is better than cure’; it would save the merchant a lot in chargeback fee if the fraud was to be prevented altogether.

Choose your battles

The merchant is charged a certain fee when a chargeback is asked for. An additional fee is imposed if the merchant decides to dispute it. Too many chargebacks also damage the merchant’s relationship with the account provider. Therefore, it is wise for the merchant to choose to dispute only the chargebacks that he/she is likely to win.

The above-mentioned steps may seem like too much for a merchant to take on by themselves. It is advisable, in such a case, to hire a chargeback management firm to deal with the issue of fraud and chargebacks, and adopt these effective strategies to safeguard your business.

8 years ago
Follow these 5 Simple Steps for Product Pricing
Mohab Growth Hacks 0

Follow these 5 Simple Steps for Product Pricing

Do you know that 61 percent of online buyers say that extra high costs is the main reason for cart abandonment? This clearly indicates that if product pricing is not accurate, you may lose more than half of the sales.

The product pricing mechanism lays emphasis on the cost price, profit, taxes, product value, and other variables. This means you have to consider various factors while determining the perfect product price. To assist you, we have compiled a list of five simple steps of pricing a product. Let us guide you through these.

What’s the Pricing Objective?

One of the foremost considerations in product pricing strategy is determining the company’s objective. You have to decide what you wish to achieve and where you see the company in the near future. When you are clear about your objectives, you get clarity about the product pricing.

For example, if you are in the nascent stage and you are entering a market, you can adopt survival pricing strategy wherein you are focused on establishing your presence and covering your expenses. Profit is not your foremost consideration. There are other objectives that influence the product price:

  • Maximum market share
  • Maximum market skimming
  • Product quality leadership

Demand-Price Relationship

While identifying the right market price of a product, it is crucial to study the demand curve. Often, there is an inverse relationship between the price and the demand. If the price is higher, the demand will be low, and vice-versa. However, this is not true in all the cases. We mentioned product quality leadership in the previous section. The demand and price both could be high if you are a leader in the segment in question.

Nevertheless, you can conduct surveys, initiate a project pilot, or perform a statistical analysis to determine the demand in the market.

Cost Estimation

Evidently, costs and target returns influence the price of the product. There are various fixed and variable costs associated with the product. To determine these costs, you can adopt activity-based costing (ABC) system to identify the exact cost based on all the activities, right from procuring raw materials to delivering the products to the retailer.

Also, if you prefer taking payments online, the customer can pay via multiple payment modes like credit or debit card, net banking, digital wallets, and so on. You can install a payment gateway to process these payments. The important thing to note is that the customer might incur payment processing charges, and you don’t have to include these while pricing your products.

Finalize a Pricing Method

The company’s objective influences the product price and the pricing method decides the pricing structure. And up to a certain extent, the pricing method is also dependent on the company’s objectives. Let us look at the pricing methods:

  • Markup pricing – The product price is determined after adding a profit percentage on the cost price.
  • Value-based pricing – The product price is influenced according to its value for the customers.
  • Target return pricing – The pricing is influenced by the target ROI.
  • Going rate pricing – You price the product as per the standard pricing of similar products.

Peek into Competitors’ Pricing Policy

Competition is almost everywhere. In some cases, you may face little or no competition. Here you can set the price as per your discretion after analyzing demand and customers’ willingness to pay. But if you operate in a niche having stiff competition, you must scrutinize your competitors’ objectives and pricing policy. This will allow you to customize your market offering in a way to gain an edge over your competitors.

The Bottom Line

With the right product price, you can grab a larger portion of the market share. But in addition to the price, you must create value for the customers, adopt innovative marketing strategies, and keep an eye on the market trends to remain a step ahead of your competitors.

8 years ago
PayTabs Payment Gateway Option for Egypt
Mohab Growth Hacks 0

PayTabs Payment Gateway Option for Egypt

By the end of 2019, there will be 50.7 million internet users in Egypt. With the rise in internet penetration, users will spend more time browsing social media, learning courses and skills, and shopping online. Evidently, digital payment will also witness a tremendous boost. PayTabs is working relentlessly to be a contributor in the digital payment revolution in Egypt.

If you are planning to integrate a payment gateway into your online store, mobile shopping app, or any other venture, look no further than PayTabs – a payment gateway facilitating smart and convenient online payment solutions. Why PayTabs deserves your attention? Read on to know more.

Smart Payment Options

The era of online transactions began with credit and debit card payments. The times have changed and now, there are numerous payment methods available for making an online transaction. By the end of 2018, alternative payment methods (APMs) will constitute 59 percent of all the online transactions. The popular payment methods include digital wallets, online banking, peer-to-peer transactions, gift vouchers, EMI payments, POS payments, and a few others.

PayTabs understands the importance of APMs. Therefore, it offers various alternative payment options in Egypt – such as Visa, MasterCard, and others. Besides these APMs, PayTabs allows merchants to transact in multiple currencies. You can indulge in the export and import of products and services without worrying about online transactions.

PayTabs facilitates payment collection within 24 hours via different modes of payment. There is a provision for generating invoices and sending these to your customers. Whether you have a website or not, online invoicing is available for taking payments online. If your business revolves around subscription-based services, use PayTabs to collect recurring payments.

The Smart Dashboard assists in analyzing sales performance. You can check out completed transactions, pending transactions, and failed transactions. Identify the most popular payment methods. This will allow you to strategize for a higher conversion rate.

Seamless Integration

Payment gateway integration is a deciding factor when it comes to selecting an online payment processor. Whether you own a website, a mobile app, or a brick-and-mortar store in Egypt; a payment gateway should integrate and perform seamlessly. PayTabs is compatible with e-commerce websites such as Shopify, Magento, PrestaShop, WooCommerce, CS.cart, OpenCart, and others. There are dedicated e-commerce plugins that integrate with these e-commerce platforms. You just have to customize it according to your requirements.

And if you have developed your own website using any other script or platform, you can use PayTabs APIs (Application Programming Interfaces). These APIs integrate with the website without any hassles. Similarly, there are PayTabs SDKs (Software Development Kits) that integrate with mobile apps. There are dedicated iOS and Android SDKs for mobile apps available on both iOS and Android.

PayTabs takes care of customer experience as well. The iFrame on-page checkout feature prevents any redirects and allows customers to pay then and there. This saves time and ensures a seamless user experience. To increase conversion rate and prevent cart abandonment, it is highly recommended to integrate PayTabs Express Checkout window in your e-com website. While customers browse your online store, the checkout window keeps hovering on the screen, providing quick access when it’s time to check out.

Robust Security & Support

Confidentiality, privacy, and security are inevitable aspects of payment gateways. PayTabs is one of the online payment processors that deploy the latest and most effective security protocols to maintain confidentiality, privacy, and security of individuals transacting on an online store.

The majority of the online transactions are secured with 3D Secure Authentication to prevent any financial frauds. In addition to these, Dual Layer Fraud Protection & Management further strengthens security aspects. PayTabs adheres to the international security protocols. It complies with PCI-DSS norms and deploys DigiCert EV SSL certification for the stringent encrypted environment.

PayTabs – The Best Payment Gateway in Egypt

As the residents of Egypt are showing an interest in online transactions, it is the right time to integrate a payment gateway into your website. With its many payment features, ease of integration, seamless compatibility, and compliance with security protocols, PayTabs enables merchants to reap maximum benefits from their online business.

8 years ago
PayTabs
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