DirectPayNet

Category: PAYMENT PROCESSING

  • Save Thousands by Optimizing Credit Card Processing Fees

    Save Thousands by Optimizing Credit Card Processing Fees

    If you’re a merchant, the fees on your merchant services statement can be an important indicator of how well your business is doing.

    But, if you’re unfamiliar with these charges and how they work, it can be difficult to understand what’s happening with your account.

    In this article, we’ll break down how these credit card processing fees affect businesses and why knowing about them is so important. We’ll also uncover some ways you can reduce or reduce these fees completely so you can gain back thousands.

    This post is a follow-up to our recent podcast episode with Chad Hamzeh. You can check that out here.

    Does your credit card processing statement say everything you need to know?

    The processing statement is the document you’ll receive each month from your provider, but it’s not the only thing that matters.

    It’s the place where you can see exactly how much you’re paying for each transaction, as well as how much each charge contributes to your overall processing fee.

    It should include, at the very least:

    • Transaction charges (e.g., interchange charge, assessment fees and other fees)
    • Service charges (e.g., payment gateway and terminal rental fees)
    • Other charges (e.g., gateway or terminal setup fees or cancellation fees)

    The payment processing fees you pay monthly go a long way to helping your business grow.

    If you’re a business owner, you know that fees are a necessary part of running your business. You pay fees to the government and other entities to operate your company.

    Likewise, credit card processors are service providers who charge via fees (flat-rate pricing, tiered pricing, and interchange pricing structures).

    These payments come in two forms: interchange rates and assessment fees.

    Interchange rates are the portion of each transaction that goes directly back to the credit card brand (Visa, MasterCard, Discover) or American Express—this can be anywhere from 2% – 8%.

    The rest of what you pay is called an assessment fee; it helps cover costs associated with marketing and promoting this type of payment option for retailers’ customers as well as covering fraud prevention measures and improvements in technology used by merchants in general. These are surcharges that typically include service fees, statement fees, compliance fees, and more. Each credit card processing company has their own fee structure, so you’ll see different pricing depending on the present transactions.

    Many merchants don’t even realize when this levy is taken out because it’s bundled into their monthly billings from their merchant services provider rather than being listed separately on every transaction receipt like interchange fees are displayed before each purchase made using credit cards in stores.

    The interchange rate on your statement isn’t the same as the discount rate you pay.

    The interchange rate on your statement isn’t the same as the effective rate you pay.

    When you sign up for a merchant account, you’ll see that your processing fees are based on an “interchange rate,” which is what’s known as the amount paid to acquirers—the companies that process credit card transactions on behalf of merchants. This interchange-plus pricing can vary widely depending on what type of business you run and whether or not it accepts cards issued by certain banks.

    However, once those charges are applied, they’re what make up your discount rate—the amount you actually pay in fees and commissions after discounts have been taken off either by processors or other parties involved in processing credit card payments (like issuing banks). These are called assessment fees.

    Don’t be confused—”discount” doesn’t mean amount saved, it means the amount taken from the total transaction and paid to the processor. You still pay that amount, and the higher the rate is the more you pay to your processor.

    The discount rate includes the interchange fee as well as all the other fees. So don’t get tricked when you see a really low interchange rate. Your payment processor could very well make up for it with other fees stacked on top.

    Some merchants are charged an extra fee for accepting mobile wallet payments.

    A mobile payment is a transaction that’s processed with a smartphone or other mobile device. With these payments, you can pay for your purchase by tapping your phone to an electronic card reader at the point-of-sale (POS) terminal or with a digital wallet payments on websites like Apply Pay or Google Pay.

    Mobile wallet payments can be convenient and speed up checkout times, but they often come with additional fees if your acquiring bank or payment processor doesn’t support them.

    Sometimes the fees can be worth it, but only if you want to take advantage of the service they back.

    It’s important to be aware of the fees you’ll have to pay, because it’s possible that the more features you want, the higher your monthly bill will be.

    If a feature makes your life easier or helps you grow your business in some way, it might be worth paying extra for.

    For example: if you want to accept a particular type of card (such as American Express) or accept a currency outside your region, the fee is worth it.

    If there are certain types of payments that make up most of your sales (like online payments or mobile app payments), these could also end up costing more if they’re not included in basic pricing models with other providers.

    A lot of merchants end up paying a ton in fees for processing services they will never use. Now is a good time to go through your metrics and see what you need, what you don’t need, and what you want. This can help eliminate credit card processing fees and save you money every month.

    These fees may be added to the statement without notifying you.

    Processing fees are often not transparent and may change without warning, especially if you’re using a third-party processor. This can make it difficult for you to budget for processing costs.

    Monthly minimum charges — Some processors charge a monthly minimum fee, even if your business only processes a few transactions each month. If you don’t process enough transactions, the minimum fee could eat up all of your profits.

    Chargeback fees — When a customer disputes a charge on their credit card statement, this is known as a chargeback. If you lose an excessive number of chargebacks, you could end up paying a hefty fee — sometimes up to $100 per disputed transaction!

    Sales tax collection — If you’re responsible for collecting taxes from customers who buy goods and services with a credit card, it’s important to know whether or not your processor will collect sales tax automatically or if they’ll leave it up to you to figure out how much money needs to be collected and remitted on behalf of customers who pay with plastic.

    Shop around for a better deal either with your current provider or with a new one and ensure you’re in contract with a processor that understands your needs.

    A no-fee merchant services provider or payment processor is a scam.

    Be wary of any company that offers free merchant services.

    There’s always a fee. When you see “no-fee” that provider might be referring specifically to no monthly fees or no transaction fees.

    But in the end, you’ll pay way more than you expect. We can break it down like this:

    • No monthly fees = huge transaction fee markups
    • No transaction fees = insanely high flat-fee monthly processing rate

    Neither are beneficial to any e-commerce business whatsoever. If you are attracted to no-fee processors, it could be that you, instead, need a bad credit merchant account.

    Be specific with your needs. Avoid scams.

    The fee information on your statement is important.

    This information on your statement is also important for understanding how your merchant services work. The fee statement from your processor should include the following:

    • The total of all fees charged to you
    • How much was paid in setup costs and monthly maintenance fees (if applicable)
    • How many transactions were processed during the billing period and what the average transaction size was. This can help you extrapolate how much money will be taken out of your account each month, as well as determine if there are any unexpected spikes in activity or payments.

    Your risk of chargeback and fraud is greatly affected by the type of card you use and the amount you accept.

    When you accept a payment, you are also accepting that there’s a chance it could be returned. The more you accept, the greater the risk of fraud and chargeback.

    When deciding how much to authorize on a transaction (and thus how much risk to take), consider the following factors:

    • The type of card being used. Certain cards are riskier than others because they have higher rates of fraud or chargebacks associated with them. For example, credit card networks like Visa and MasterCard tend to have higher rates than other credit or debit cards. These transactions carry greater potential for fraud—hence why they come at higher rates when accepting them via merchant services providers like Square, Stripe, or PayPal.
    • The amount being charged. The amount a cardholder wants to spend in one single transaction also carries a risk. The higher the amount, the greater the risk. Some processors even flag transactions above a certain amount immediately. To avoid this, you can break up the charge into multiple, lower transactions. But before doing that, have security measures in place like PCI-compliance and customer verification services.

    Many merchants pay into a rolling reserve, but don’t ask for their money back which can result is losing tens of thousands of dollars.

    A merchant reserve account is an account set up by a merchant processor or bank that collects money from sales transactions until there’s enough money to cover any potential chargebacks or fraud claims issued against them.

    When merchants receive credit card payments through their processing company, they’re required by law to pay the processor a fee per transaction (this varies depending on the type of business).

    The processor then holds onto part of each transaction until there’s enough money in their reserve account to cover all potential chargebacks or fraud claims issued against them.

    Some merchants, like high-risk merchants, are required to have a reserve due to the likelihood of chargebacks. You could be high risk due to the industry you operate in or because of a highly transaction volume. But the money in your reserve isn’t permanently tucked away.

    If you have good processing for 6 months or so, you can contact your provider and ask to be paid back a percentage or lower the cap.

    The best way to optimize your credit card processing fees is to use a provider that

    Merchant account and payment processing fees are one of the biggest concerns for small business owners. It’s important to understand these fees, because they can add up over time. The good news is that there are plenty of ways to save money on your monthly statement. You just need to know where and how to look for them!

    Using the right processor, one that supports your business model and needs, is the best way to optimize those fees. Get in touch with us here at DPN to get started with your new processing relationship.

  • Is Stripe a Good Processor? The SMB Killer

    Is Stripe a Good Processor? The SMB Killer

    Business owners across the world know Stripe. Either from 1st-hand experience with the payments giant or because its difficult to not recognize due to it’s market share.

    In fact, Stripe is so popular that many people are blinded by the $$$ and ignore the red flags in front of them.

    What is Stripe.com? An aggregator, not a processor.

    Is Stripe a good processor? Depends on what you sell.

    Does Stripe support its users? Customer support is abysmal.

    Is Stripe safe? If you do small-scale sales, yes. Otherwise, no.

    Ask the thousands of merchants who’ve lost their entire business at Stripe’s hand and you’ll hear an outcry of, “Stripe destroyed my business!”

    Stripe is one of the biggest payment processors in the world.

    Is Stripe a legit company? Yes. Stripe is one of the biggest “payment processors” ever. It’s used by a huge number of businesses, startups, and e-commerce sites around the world to accept credit card payments online.

    Stripe was founded by Irish brothers Patrick and John Collison when they were still teenagers (they’re now 30). The company has raised billions from investors including Sequoia Capital, Visa Inc., and Peter Thiel at Founders Fund.

    The company boasts that it processes billions of dollars worth of transactions every year, making it easy for companies to collect money through its platform and then convert it into their local currency via bank transfer or PayPal.

    On paper, that all sounds fine and dandy. But in reality? Experience paints a much darker picture.

    Stripe has agreements with banks called PSPs.

    A PSP is a Payment Services Provider. It’s the party that actually accepts your customer’s card information and processes the transaction.

    Stripe has agreements with PSPs in the US, the EU, and other countries/continents, making accepting payments from customers around the world easy via currency conversion (disregarding the hefty transaction fees and pricing model).

    PSPs are the companies that actually take your money from customers and deposit it into your bank account.

    Contrary to what you likely believe, Stripe is not a merchant account provider. It is a payment platform with international payment functionality and a PCI-compliant POS card reader/gateway.

    With Stripe, you pay for convenience with flat, non-negotiable monthly fees.

    The agreement between Stripe and PSPs says that they can terminate your account at any time.

    Stripe has the authority to terminate your account at any time. They can also prevent credit card processing and prevent you from accessing customers’ credit card details.

    You may be wondering why Stripe would ever want to terminate an account, since they make money when their customers do. But there are many reasons why Stripe might want to terminate an account. The most obvious one is if they find out that you’re doing something illegal, such as stealing credit card information.

    The most relevant reason to you is this: violating their Terms of Service (ToS).

    The ToS are the rules that all Stripe users must follow in order to use their service. Unfortunately, their terms exclude most online merchants from using their service especially after reaching a certain sales volume.

    The last thing you want to be is on Stripe’s radar. Which is ironic considering how badly they need you, as a business, to implement their service.

    Stripe uses that authority liberally, opting to hold funds, prevent payment processing, and close accounts.

    Stripe has the power to freeze your account at any time. They can hold funds, prevent payment processing, and close accounts—sometimes without giving a reason. This is a major issue for business owners who rely on Stripe’s payment processing services to operate their businesses.

    Stripe uses that authority liberally. A simple Google search will feed you hundreds of threads, stories, and posts about how Stripe destroyed their business and stole their money.

    Businesses that use Stripe as their sole provider often lose all access to their customers’ credit card details.

    Because Stripe is an intermediary, it does not hold the payment information itself. Instead, it passes along this sensitive data to payment processors and banks.

    If a PSP chooses to terminate your account without notice and without legitimate reason, you could lose access to all of the credit card data associated with your business—including thousands of dollars worth of payments made by customers who have paid you in full but whose accounts have been frozen by Stripe or one of their partners.

    Stripe takes no responsibility for these actions by their partners and even goes so far as to warn you not to rely on them.

    Many businesses end up closing down because they can’t recover CC data and can’t process orders.

    Once they lose access to customers’ credit card details, they can no longer process new orders or renew existing ones.

    The reason for this is that Stripe doesn’t give you access to your own data. It keeps all of your customer information in its own database, which means you have no way of accessing it if something goes wrong.

    Stripe gives you some basic tools for managing customers, but these tools are nowhere near as powerful as the ones provided by other payment processors. And most CC information isn’t stored within Stripe, it’s accessed by Stripe from their PSPs.

    So when your Stripe account goes bye-bye, so does all your data.

    If you have recurring billing, this is a major issue as you need to constantly collect cards to charge people.

    If Stripe loses your card details, the customer won’t be able to pay and will have to cancel their subscription.

    It’s not just that this creates an inconvenience for customers; it also creates frustration and ultimately damage for your business.

    If someone has signed up for 6 months of service but finds they can’t pay because Stripe lost their debit card and credit card information, they are likely going to cancel immediately.

    Other popular payment processors like PayPal and Square follow follow the same path as Stripe.

    PayPal and Square terminate accounts just as much as Stripe does, though they don’t get as much attention because they’re not as big of players in the space.

    When Stripe terminates an account, it doesn’t refund any chargeback fees or give advance notice to its users. Instead, it closes down an account without warning and takes all of your money away with it. Expect the same treatment from other 3rd-party processors.

    They’re not there to protect your business; they’re just trying to make money at your expense.

    If you’re asking the question, “Does Stripe do high risk?” The answer is a hard no. And this is exactly why.

    A good processor is one that backs your business.

    Small businesses, online businesses, and anyone else looking for a processor need to know that Stripe is not a good option.

    Stripe is one of the most popular payment processors on the market today and it is easy to see why: it takes just a few minutes to open an account and the payment gateway checkout experience is familiar.

    However, these benefits come at the cost of security and reliability. If you are working with sensitive information like credit card numbers then this may not be a good fit for your business model. You need a service provider with stronger API security integrations for both your own backend and your customer’s important online payment data.

    Stripe is not safe for business owners. Accessing frozen funds can take up to 180 business days—unacceptable. Your funds shouldn’t be frozen in the first place (especially considering the processing fees)

    It is a company that holds your money and customer data hostage while they decide whether or not they want to terminate your account.

    We’re here to tell you there are better companies out there. Ones that accept any payment method you need: debit, credit (Mastercard, Visa, American Express), ACH. No matter what you sell, from dropshipping and supplements to adult content and firearms, there’s a processor that supports you.

    At DPN, we connect you with those companies. Give us a call today and start working with a payment’s system that will support every transaction you receive.

  • Crypto During Recession: Why it Thrives

    Crypto During Recession: Why it Thrives

    Do you want to know what thrives during a recession? Cryptocurrencies.

    The 2008 financial crisis led to the creation of Bitcoin. And what caused the 2008 financial crisis in the first place? A housing bubble. And guess what’s happening now? Interest rate spikes, which is creating a housing bubble.

    But we’re not here to talk about the housing market. We’re here to tell you that crypto, birthed from financial crisis, is the perfect too for you to survive another crisis.

    There’s no doubt the cryptocurrency industry is complicated. The technology offers a lot of potential in the future, and this is your chance—in the early stages of the crypto game—to create a sustainable business that thrives during economic turmoil.

    Create a blockchain, cryptocurrency, and Bitcoin consulting service.

    The growth of the blockchain and cryptocurrency industry has given rise to a new class of experts: crypto consultants. Crypto industry consultants help users launch their own coin, teach them how to trade crypto, help them understand the ins and outs of the crypto bear market, and advise them on how best to spend their money in this new frontier.

    The most successful crypto consultants are those who can separate fact from fiction and translate complicated technical jargon into understandable language that makes sense for novices.

    The key is knowing where your client’s background lies as well as what kinds of questions they have so that you can tailor your pitch accordingly.

    Build a crypto exchange platform.

    In the midst of recession, there is a great opportunity for entrepreneurs to build new businesses.

    The cryptocurrency market is still in its infancy, and there are many opportunities for entrepreneurs to create new business models and products that can help people overcome the current economic situation.

    A crypto exchange platform is where you can buy, sell, and trade cryptocurrencies. You can invest in crypto exchanges like Binance or Coinbase and actually be able to exchange your fiat currency (like the US Dollar) into cryptocurrency (like BTC). There are even fiat-linked stablecoins which are quickly taking up double-digits in the entire crypto market valuation.

    The benefit of using a crypto exchange platform is that it offers an easy way for anyone with access to internet banking to start investing in cryptocurrencies

    There are several companies that already provide users with a platform to exchange cryptocurrencies for fiat money, including Coinbase and Kraken.

    However, there are no companies that allow users to trade cryptocurrencies directly without going through fiat money exchanges. If you have technical skills, this could be a very profitable business idea because it will offer a service that people need right now.

    Sell blockchain-based eCommerce solutions.

    Blockchain, the underlying technology behind Bitcoin and other cryptocurrencies, is a decentralized digital ledger that allows you to transfer value between users without an intermediary.

    Unlike traditional payment systems like PayPal or Stripe which keep track of everyone’s money in one place, blockchains distribute this responsibility across many computers. Each transaction is recorded on all the computers in the network so there are no single points of failure and it’s very difficult for anyone to hack into or alter records on the blockchain without being noticed by others in the network.

    This means that blockchain technology can be used not just for cryptocurrency but also any situation where you need a secure record keeping system—such as tracking ownership of items such as property deeds (in real estate) or artworks (in fine art), recording votes during elections (in government), counting votes within organizations (like unions), even recording medical records and verifying identities.

    Putting this into action, you can sell data storage space on the blockchain.

    Develop a crypto loan platform.

    Crypto loans are an emerging concept in the crypto space. They allow you to use your crypto assets as collateral and earn interest on them. This is a new way to get your hands on more cash without having to sell off digital assets.

    Crypto loans are becoming increasingly popular, especially since they can be used as collateral for other loans. You can use your knowledge of cryptocurrencies, along with your website or app development skills, to create an online platform where people can apply for crypto loans using their crypto assets as collateral. You could even offer different types of crypto-backed loans or even offer interest rates based on how much risk you want your clients to take on.

    This kind of service will be especially useful during recessions when central banks are turning down loans and interest rates are low.

    Create a crypto crowdfunding platform.

    Crowdfunding is a popular way to raise money from the public, and we can see its success from sites like Kickstarter and Indiegogo.

    These sites, however, use traditional fiat money. But you can up the ante with something not just more unique/niche, but stable.

    Though it might sound off to say that cryptocurrency is stable, given the volatility of crypto markets (not unlike stock markets), it is much more stable in a US recession. This is because crypto isn’t attached to a fiat currency, like USD or GBP. If shit does down with the federal reserve and the value of the dollar crashes, it won’t directly affect the value of a bitcoin but it will crash our traditional financial institutions.

    You can create a stable crowdfunding platform based around cryptocurrency and blockchain that promotes innovation no matter the state of the US economy.

    Develop an NFT marketplace, or create a series of NFTs.

    If you want to make money with crypto, you need to find an idea that will work for you and your skillset. If you’re into collectibles and trading, NFTs might be your golden ticket.

    If you have some design skills, creating unique non-fungible tokens (NFTs) or building a marketplace to sell them can be a great way to earn money with crypto.

    In fact, this is one of the easiest ways to earn money with crypto because it doesn’t require much effort other than creating your design assets or building your marketplace website.

    There are hundreds of websites that offer simple templates for creating new NFT designs or building new sites around them. You can even use some of these templates yourself or start from scratch using HTML5 and CSS3 code libraries such as Bootstrap or Material Design Lite.

    During the pandemic, NFTs and fintech use was at an all time high—and that’s measuring data from just last year. Whether you think NFTS are a fad or not, we can safely say crypto will perform well during the next recession and billionaires out of those who stake the game.

    Bitcoin rose from a financial crisis. It’s part of the decentralized future of commerce and safe from economic downturns.

    Making money from cryptocurrency has never been easier.

    It’s an exciting time to be alive when there are so many opportunities for entrepreneurs to get involved with cryptocurrencies like Bitcoin, Ethereum, and others in the fintech space. And while it might not equal in liquidity as other markets like forex, digital currency is here to stay.

    And as these coins become more popular, it means that more people will want to know how they can use them too – which could mean big business for startups looking at crypto as a financial system.

    With so many options out there, it’s hard not to find something that fits what you want in your crypto business. Nor is it difficult to see how crypto during recession thrives.

    If you’re interested in crypto, want to get into the space, but don’t know where to start, we have the answer. Speak with our representatives here at DirectPayNet to get set up with a crypto merchant account so you can prep your business for financial success.

  • How to Recession-Proof Your Business with Payment Optimization

    How to Recession-Proof Your Business with Payment Optimization

    Like most businesses, your e-commerce payments system is likely a pretty complex web of integrations and back-end processes. After all, the world of credit card processing isn’t a simple one.

    However, if you dig deeper into this web, you might find that there are some pretty significant opportunities for improving efficiency and cost effectiveness.

    To understand how to optimize payments in order to thrive in the recession, it’s essential to have a solid grasp on the typical flow of an online transaction:

    • A customer places an order on your website
    • The customer enters their debit card, account/routing numbers, digital wallet, or credit card payments information
    • The issuer authorizes the transaction
    • The customer receives confirmation that their order has been placed

    Yeah, you know this stuff already. But have you optimized each aspect of it? Below are some of the top ways to optimize payments and secure your business’ future.

    Optimize payment gateway integrations.

    Utilize Your CRM

    It’s important to have a clear view of how much revenue you’re generating from each channel and the volume of traffic that leads to those sales.

    This information can be used for planning purposes, but also helps with optimizing payment integration. For example, if you find that a certain payment gateway is generating less revenue than others, it may be time to remove it from your checkout flow or consider switching providers altogether.

    Doing so will eliminate some costs on your end while improving the checkout experience for your customers, helping to bump up conversions and retention.

    Customize the Payment Gateway

    While it might seem like an unnecessary step in the process, customization options can help streamline the customer experience (and your own) for every card transaction by enabling two-way communication between merchants and customers.

    For example, if shoppers are shopping at different times throughout the day (and making purchases), they may prefer having their receipts sent via email versus text message—and this customization option allows them to choose what works best for them without sacrificing security or reliability in any way.

    A really good payment option to consider is cross-border payments. The US economy may be in a recession, but that doesn‘t mean the EEA is. You can easily add multiple currencies to your gateway in the backend or by asking your payment provider.

    You can also eliminate specific card networks if only a handful of customers use that payment method on your store. For example, if American Express is too expensive to process, then you can optimize payment gateway to only allow Visa and Mastercard, which will lower transaction costs.

    Your gateway has a ton of customization options if you’re willing to dig into it. And at this point, you should be considering every option to secure your business through a recession.

    Optimize costs in other areas of your business.

    Payment optimization doesn’t only apply to accepting payments from your customers. You should also look at optimizing costs in other areas, including:

    • Cost of Goods Sold (COGS) – This is the cost of the product you buy. If a product costs $5.00 and you sell it for $10.00, your COGS will be $5.00 per unit sold. During a recession, it might do well to decrease your markup if you notice a steady drop in sales.
    • Cost of Marketing – The cost involved with omnichannel marketing for your products through advertising, public relations, and other means. Analyze all your marketing platforms and eliminate the ones that aren’t bringing in new customers.
    • Shipping Costs – The costs associated with shipping products from one location to another can be significant if you have multiple locations or high volume orders that need to be shipped quickly. You can negotiate with suppliers for better shipping rates, create minimum quantity orders to alleviate shipping costs, or find local suppliers/warehouses.
    • Returns Costs – Some customers may return items they’ve purchased from your online store due to circumstances beyond their control such as receiving an incorrect item or not liking it. Either way, you’re bound to get return requests. Rewrite the return and refund policy on your site to better reflect your stance.

    Optimize the checkout experience.

    Optimizing the payment experience at checkout is an important part of preparing for a recession.

    The first thing you should do is to make sure the checkout process is user-friendly, so that your customers can easily find and complete their order.

    Once they get to the checkout page, it’s also important to make sure it’s easy for them to navigate through each step of the process.

    A long and complicated checkout process will only frustrate customers and increase dropoff rates. Try minimizing the number of steps required in order to complete an order (for example by using one-click ordering or by automatically adding multiple items together into one transaction).

    Optimize payment security features at checkout.

    The first step in any payment optimization plan should be to ensure that you’re using a PCI-DSS compliant payment gateway.

    A compliant payment gateway will help ensure that your customers’ sensitive information remains safe as it moves between them and your business — something that’s critical during these days when security breaches seem to be every other headline on the news.

    You’ll also want to make sure that your payment gateway offers features like 3DS (Address Verification Service), AVS (Address Verification Service), CVV (Card Validation Code) and 2FA (Two Factor Authentication). These features help verify the information provided by customers before authorizing a transaction.

    Optimize payment gateway response automations.

    A great way to be proactive and make your business more efficient via payment optimization is by configuring your gateway response automations.

    These are automated responses triggered when a customer completes a transaction on your website. They are designed to automatically send information back to the customer via email or text message (SMS).

    This can include confirmation emails that provide tracking information, shipping notifications and more. Optimizing these automations for each customer and each transaction will help ensure that you are providing fast, consistent service without having to spend extra time or money on customer service.

    Optimize payment billing descriptors on customer bank statements.

    One of the best ways to avoid chargebacks (especially during a recession) and help customers understand their purchases is to optimize your billing descriptor. The descriptor is the text that appears on the credit card statement.

    A common mistake is to put all of your company information in this descriptor, which can lead to customers getting confused as to what they’ve bought from you. This can result in a chargeback if the customer decides that he or she didn’t authorize the purchase.

    Don’t just list your company name; use a short descriptor that includes only essential information. One of the best pieces of information you can put is your website and/or your phone number. You have limited space on the description, so optimizing this payment information is essential.

    Optimize bank decline message responses received through your payment gateway.

    Declines happen all the time. In a recession, it’s more than likely due to insufficient funds. But receiving this bank decline message doesn’t mean you’ve lost a sale. Instead, you can automate the response and turn it into something profitable for you while allowing your customer to obtain the item they way (and appearing like your customer service is 5-star quality).

    You can optimize decline message responses by updating your settings in the backend of your gateway in order to provide more detailed information about why a transaction was declined or failed.

    Then, you can provide a small discount code to lower the price for them as well as offer customers a Buy Now, Pay Later option. Services like Klarna, Afterpay, and Affirm provide customers with affordable payment options. They best thing about them is there’s no risk of chargebacks or partial payments to you.

    A lot of declines can happen, too, because the ticket price is too high. Implement a payment strategy that keeps each transaction below $100, breaking up customer purchases into several charges at a time to increase the approval rate.

    With payment optimization, your business is slimmed down and ready for a recession.

    The first step to recession-proofing your business is to realize that you don’t need to be a victim of economic downturns. You can use the opportunity of a recession to re-evaluate your business model and make changes that will help boost your bottom line.

    Payment optimization is a great way to make sure you’re getting the most out of your business. When an e-commerce payment gateway helps facilitate transactions, it can be a great boon for both consumers and merchants alike. The next time you want to accept payments online, consider optimizing your checkout experience by reviewing our steps outlined above.

    And for the best in payment processing, open up a real merchant account (not the fake ones you find from Stripe or PayPal). The payment experts here at DirectPayNet will help you get started. Get in touch with us today.