Accepting credit cards is an absolute must for any business today. However, understanding everything related to how payments are processed can be confusing, overwhelming, and, more than anything else, expensive. To make sure that your business has a more positive payment processing experience, you must understand precisely what is going on and what charges you might be facing.
What is the ideal credit card payment process?
Every time a customer uses their credit card to make a purchase, this is what should happen:
- As a first step, the card is swiped at the terminal. The terminal should recognize the card and contact the processing company. Then, the card is authorized for this purchase.
- The credit card processing company sends the payment to your bank through a certified service provider.
- At the end of every month, a statement is sent to you that specifies the interchange for all of these transactions. This is the fee determined by credit card companies for you to be able to accept their credit card as a form of payment.
How can small businesses avoid losing money by not processing credit card payments properly?
If you own or manage a small business, you should know that there has been a significant increase in fraudulent use of credit cards. If the technology you rely on is outdated, your business may be a target for clever scammers. And you certainly do not want to stay away from online selling in an attempt to avoid fraud because even if you only sell through your physical store, scammers are everywhere.
Additionally, you should make sure that your business complies with all the payment card industry security standards which call for your business to:
- Build and maintain a secure network with a firewall and strong system passwords.
- Keep all cardholder data safe and encrypt all transmissions across public networks.
- Constantly use anti-virus programs that are updated and maintain secure systems.
- Restrict who can access cardholder data on a need-to-know basis and assign a unique ID to anyone with computer access.
- Regularly test processes and security systems.
- Establish policies that address information security.
Work with the EMV Standard
Your small business must meet the EMV standard, the global standard for cards that use chips. If your business has not met this standard, you are responsible for any chargeback as a result of a fraudulent transaction made with a card that has a chip at your terminal. Make it a point to upgrade to the EMV standard and enjoy peace of mind. It will help you combat fraud and the losses that go with it.
Other Measures You Can Take to Prevent Losses
- A great deal of fraud happens when the card is not present (particularly in online transactions). Enhance your website’s security by adding CAPTCHA. It protects against robots that are used to commit large-scale fraud.
- Have customers manually input CVV, a three- or four-digit code that can be found on the back of cards, or AVS which requires them to enter their address (which should match the one on file).
- Adopt level 3 card processing, which requires the capture of certain line item data of around 15 or 20 fields. Learn more about level 3 credit card processing here.
Your business has taken a long time to develop, so don’t risk its stability through preventable losses.
The post How Small Businesses Lose Thousands Not Processing Credit Cards Properly appeared first on Home Business Magazine.