November, 2021 - PAYARC

The Case for Omnichannel & the Future of Payments

Retail is in a state of constant flux due as ecommerce and mcommerce boom. The e-commerce world is always evolving to match pace with changing market trends, consumers now require a higher degree of personalization and convenience throughout their shopping experience.

Today’s shoppers are looking to invest in experiences, and better experiences result in better sales. Because of this, smart retailers are adopting an omnichannel payments approach designed to bolster the consumer shopping experience.

This means that retailers are providing their customers with multiple ways of buying their products, including in a brick-and-mortar location, via a website or through a mobile app. Implementing an omnichannel payments and business strategy is an initiative that requires time, money and a seasoned team that can streamline an omnichannel payments operation, but it’s usually a worthwhile investment.

A More Profitable Business Model

A study conducted by Internet Retailer that examined the data of 24 retail chains found that omnichannel customers spend 2.7 times as much at Ulta Beauty compared to its store-only shoppers.

The data was consistent with activewear retailer Fabletics.com, where consumers who shop in its stores and online spend nearly three times as much as those who only shop online. The study also found that the number of surveyed consumers who buy products online and pick up orders in physical stores increased by four percentage points to 62% from March 2017 to March 2018.

This data suggests that marketing your business through multiple channels will increase the amount that each customer will spend when shopping with your store. This is due, in part, to the fact that seeing an item in multiple places will increase the chances of a consumer buying the item.

Additionally, a study conducted by Google, Ipsos MediaCT and Sterling Brands discovered that 75% of consumers are more likely to visit one of your physical stores if they learn local retail information online on a website or through an app. This means that offering your products through multiple channels also increases foot traffic in your physical locations, boosting your online, mobile and brick-and-mortar revenues greatly.

More Personalized and Convenient Experience for Customers

In addition to improving your revenue streams, an omnichannel approach can bolster your brand’s reputation by creating a deeper connection with your customers based on their needs and trust. A recent study showed that 48% of customers no longer want to shop on e-commerce sites with slow delivery rates.

An omnichannel fulfillment approach can improve customer satisfaction rates by offering multiple delivery options, such as the opportunity to order a product online and pick it up at a physical store. It’s an effective way for merchants to regain customers’ trust and improve the convenience factor.

The omnichannel route also reduces some of the inefficiencies that riddle retail businesses. Rather than requiring a customer to drive 45 minutes to the nearest brick-and-mortar store only to find the desired item is out-of-stock, an omni-channel approach enables customers to request specific products online, which can then be stocked and reserved for the customer at the local store. This approach also improves the relationship between a retailer and a customer as the retailer can learn more about the customer’s likes and dislikes across various channels. This data can then be used to offer the customer more personalized recommendations at a time where more and more consumers want to feel as if their individual needs are being met.

This idea can be taken a step further with a loyalty or rewards program that customers can access through every channel, making them more likely to spend more with your business if they’re being rewarded for buying your products across various channels. The goal is to ultimately improve the shopping experience for the consumer, thus bolstering your brand’s name, which leads to higher profit margins.

If you’d like to implement an omnichannel payments operation, you’ll need to hire a payments processing team with the experience, expertise and capacity to help you reach your goals. PayArc offers merchants the ability to accept customer payments across channels and to streamline the payments operation.

Contact us today to get started if you’re hoping to expand your retail business goals, improve customer retention rates and boost sales.

Payarc

November 15, 2021

Industry Insights, Uncategorized

mobile-commerce; payment-processing
The Future of Frictionless Payments

New technology has expanded the ways we pay. Where cash was once king, credit and debit cards now reign supreme. Even that upseating is in the process of dynamic change. As consumer lifestyle preferences shift and convenience is valued over all, many consumers are looking for even easier ways to pay online.

This is where frictionless payments begin to take hold. Embedded and “invisible” payments experiences are taking ecommerce by storm, enabling consumers to pay for goods and services in the blink of an eye. In fact, as biometrics continue to seep into the payments experience, the blink of an eye (via facial recognition tools) may be a new way to pay soon enough. Ecommerce companies like Uber have made it easy to conduct commerce on mobile phones without even experiencing the act of payment. Instead, users simply choose what they want: transportation from Point A to Point B; the actual payment happens behind the scenes, so as to not encumber the customer.

This is the new trend in payments: frictionless payments. With it comes a lot of responsibility on the part of merchants to ensure that these types of transactions happen safely and securely

Security in Frictionless Payments

As digital commerce accelerates and the Internet of Things (IoT) grows, payment options are growing in tandem. With 8.4 connected devices—a number forecasted to increase to 20.4 billion within two years— it’s not surprising that consumers want to be able to pay anytime and anywhere. It’s critical to ensure these “anytime, anywhere” payments are protected with the utmost security.

An example of such security measures is 3D Secure. The first 3-D Secure (Three Domain Secure) authentication has been around for years as a security layer for card-not-present (CNP) transactions. One of the primary reasons it was created was to increase consumer confidence in online transactions. While it was effective in securing transactions and garnering the confidence of consumers, it also introduced unnecessary friction and false positives into the equation, causing merchants to experience more cart abandonments.

The new 3D Secure 2.0 (3DS2) has made frictionless payments a primary focus. The updated version allows the transmission of more data during transactions, enabling risk-based decisions for authentication. Using token-based and biometric authentication allows this protocol to facilitate secure, frictionless payments by freeing up consumers from the need to remember static passwords.

Other Considerations for Frictionless Payments

The core component of frictionless payments is convenience. Users are able to pay on their terms without being overburdened by security measures (though the security is still in place to adequately protect transactions). Having the proper payments infrastructure in place has become increasingly important to facilitate frictionless payments as new channels become commerce channels.

Conversational commerce has ushered the rise of using voice assistants and chat bots (via messaging apps). As more mobile websites and mobile apps come into play, consumers are increasingly using mobile wallets as streamlined ways to pay from a smartphone. This signals great strides in optimizing convenient ways to pay; however, the fraud problem still exists on these channels. It’s an ongoing game of striving to make the payments experience seamless for consumers without making it a cake walk for bad actors.

Each new payment channel and instrument can be an open invitation for hackers and fraudsters looking for an easy target. The interconnectedness of these channels and payment methods (credit cards to wallets and wallets to apps, etc.) make it ripe for the fraudulent picking. Merchants that go the route of offering in-app payments should be sure that login security is strong without being cumbersome for the end consumer.

A Vision for the Future of Payments

We will continue to see frictionless payments get more sophisticated as technology evolves. Existing technology has already afforded consumers some interesting and unique ways to shop and pay. Amazon, an e-commerce mammoth, has led the charge in frictionless payments. Their Amazon Go grocery store promotes what it calls a “a check-out free shopping experience” where customers don’t endure a checkout line—they simply walk out with their selected items, which are automatically charged to their connected Amazon account.

No matter where you are on the frictionless payments journey, it can be beneficial to work with a professional, trusted payment processing partner. PayArc offers payments support across the spectrum—from payment gateways to chargeback management and fraud prevention—to help merchants streamline payments across all channels. Reach out today to learn more about how we can help you optimize your payments operation.

Payarc

November 15, 2021

Security, Technology, Uncategorized

mobile-apps-payments
The Importance of UnionPay for International Ecommerce Merchants
oday, let’s absorb the story of a young Chinese couple. They met while studying abroad in Paris, France. Wengen was small in stature, with a sharp mind. He quickly fell for Xiaoling, whose beauty veiled her quick brain.

At the time of this story (the mid ‘90s), buying things in France challenged international students. Payment cards like Visa and MasterCard existed of course, but weren’t universally available for international use.

Wiring money from bank-to-bank was expensive and took a few days, and one had to have the right “papers” to establish French bank accounts.

Both students managed to set things up, and each lived a Parisian adventure using cash and locally-issued Carte Bleue payment cards. The Internet and eCommerce were yet to come.

Fast-forward a few years, and their daughter (Li Xiu Yiu) followed in their footsteps. Born in Shanghai, she’s attending their Parisian alma mater and doing very well as one of the 550,000 + Chinese students studying abroad.

Like many Chinese Millennials, she turns to the Internet for comparison shopping, then visits a French store in-the-flesh to try things and to buy. Though she eschews personalized goods, Li Xiu Yiu made an exception and ordered a T-shirt that says, “My name means Elegant & Brave.”

Li ordered the T-shirt on a British website, using her UnionPay card from home. In fact, the UnionPay card serves as both her credit card and debit card — providing cash for Paris market vendors via UnionPay’s global ATM network, debit transactions in restaurants, and a credit card for larger buys.

If you haven’t heard of UnionPay, and don’t accept it yet on your eCommerce website, you’re missing out on lots of international online traffic.

Not only from Chinese students abroad, but also from consumers in 168 countries and regions around the world — a critical opportunity for eCommerce merchants. Let’s look at the whys and wherefores.

Background/History of UnionPay

China UnionPay (aka UnionPay or CUP), a financial services corporation, provides bank card services and is the major payment card scheme in mainland China. Founded in March 2002 — headquartered in Shanghai — UnionPay operates under the approval of the People’s Bank China. Their interbank network links all ATMs issued by the various banks across China.

To expand acceptance around the world, UnionPay entered into several card reciprocal agreements with other payment networks like Discover, RuPay (India), JCB (Japan) and BC Card (South Korea) beginning in 2005.

For example, Discover Network signed an alliance with CUP Network. The long-term agreement allows Discover cardholders to use their cards at UnionPay ATMs and POS terminals in China, and facilitates acceptance of UnionPay cards on the PULSE network in the U.S.

China UnionPay cards can now be used in over 100 countries outside China. The UnionPay debit cards may be used only in the UnionPay network and in others that have negotiated and signed contracts with UnionPay.

So, Li Xiu Yiu and classmates with CUP cards from other countries may shop in person, online, or via mobile apps while expanding their horizons in Paris.

Outbound Chinese Travelers & UnionPay

2018 is the EU-China Tourism Year (ECTY), declared by the European Union President Jean-Claude Juncker and the Chinese Prime Minister LI Keqiang.

Since China represents the world’s largest travel market (in both outbound travel and expenditure), online travel booking sites, airlines, hotels and other travel-related businesses stand to benefit throughout the EU. This follows a record year of Chinese visitors totaling in the millions in 2017.

The United States and Canada benefit too from Chinese tourism to North America, attracting just under 3 million visitors in 2015. Forecasts expect that to rise above 5.72 million in 2021.

Wolfgang George Arlt, wrote in Forbes, “UnionPay…saw transactions jump by 40% this year when compared with the Chinese New Year period in 2017, especially in Asia-Pacific, Europe and North American.” During Chinese New Year 2017, more than six million Chinese traveled abroad.

Travelers like to shop online before and after they travel. So, if you want your share of the outbound Chinese traveler dosh, don’t neglect UnionPay acceptance on your website. Who knows? If your products catch their attention, you may have more online customers than you thought possible.

Online Shopping and China UnionPay

Because of the sheer number of people living in China, marketers pay close attention to their online shopping habits. No doubt preferences change in China as they do everywhere else, but it pays for eCommerce retailers to keep up with shopping trends to garner their share.

The Ten-year Report on Online Shopping Overseas, published by China Daily and the Telegraph, reveals the habits of online shoppers and how they changed between 2005 and 2015.

Interestingly, favored websites moved from Hong Kong and Macau to Japan, South Korea, North America, Europe and South America during that timeframe. In general, shoppers prefer local specialties, cosmetics, and skin care products. See another take on eCommerce shopping habits here.

Conclusion

When you want to add UnionPay to your eCommerce payments arsenal, reach for PayArc. We’re a direct Discover acquirer, and by using our payment solutions you too can accept UnionPay online.

With six billion cards in circulation around the world, why wouldn’t you want to accept UnionPay cards — So that international customers who prefer using their UnionPay debit or credit shop on your site?

Get the scalability you need in over 25 currencies from PayArc’s global network of acquirers and banks. With leading-edge solutions from seasoned professionals with years of experience in the payment industry, PayArc is the only partner you need for your payment processing solutions.

You have a business to run. Our business is to help you run it better.

If you need to add a world-class payment processing capability that integrates easily with your online, in-store and mobile merchant solutions, look no further than PayArc. We’d love to do business with you.

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1. Understanding the Application Process for Domestic Merchant Accounts | PayArc – […] merchant accounts are built for card payments within the US. International merchant accounts, on the other hand, are developed…
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Payarc

November 15, 2021

Uncategorized

payment-processing
Secure Processing Solutions: Payments Data Security Best Practices
Retail ecommerce grew to a healthy $409.208 billion in 2017, but that growth came at a price: 16.7 million reported victims of fraud in 2017 (6.64 percent of the US population). Unfortunately, this doesn’t come as much of a surprise. With both increased rates of ecommerce transactions and consumer data on the web, fraud is becoming easier and more accessible for criminals.

This is all the more reason for merchants to buckle down and get serious about payments data security. Merchants want customers to trust that their payments data is safe, otherwise these consumers may well take their business elsewhere. Investing in a secure payment processing solution is just the first step towards cultivating a reputation as a safe and trustworthy merchant. And as anyone who has experienced identity theft knows, getting your good name back is a tough uphill battle once it’s been compromised.

The Danger of Data Breaches

Data breaches are one of the top dangers for both customers and ecommerce merchants. These aren’t just limited to big businesses: approximately 90 percent of these data breaches will impact small merchants, according to a study by Trustwave.

And this comes at a big cost, especially for smaller merchants. PCI standards indicate that the average cost of a breach is $4 million for larger websites, and the average cost for a small business can be over $36,000 — a hefty sum to bear if you aren’t a large corporation. This doesn’t even take into account the non-monetary costs that might be involved to rectify the breach, like time spent and resource allocation.

This also doesn’t take into account the damage such a data breach can have on a small business’s reputation. The Ponemon Institute has a study that indicates that a data breach can have a grave effect on any organization: 57 percent of people said they lost trust in confidence after a data breach, 31 percent terminated their relationship, and 75 percent said it had an impact on the business’s reputation. This kind of loss is difficult to quantify, since it can vary by organization size. Still, these statistics make the danger of data breaches very clear.

Data Security Best Practices

Clearly, data breaches and identity fraud are things that merchants should strive to avoid for the sake of both for their businesses and their customers. Luckily, there are plenty of tips and suggestions for beefing up your business’s security practices floating around the internet. Here are just a few best practices and requirements for maximum payments data security.
- PCI DSS Compliance: This one is a must. Formed by the major credit card companies, the Payment Card Industry Data Security Standard is a set of policies and procedures that optimizes the security of payment via credit or debit card. These procedures are important because they have methods to protect credit card data, along with ever-evolving standards for encryption, anti-malware software implementation, monitoring and risk analysis. One of the best ways to ensure your ecommerce business is at the correct level of compliance is to find a payment service provider that has already obtained PCI DSS certification and who can assure you they are up to date with the latest security technologies.
- Hypertext Transfer Protocol with Secure Sockets Layers (SSL): You probably know this better as HTTPS. This is an extension of the Hypertext Transfer Protocol for secure communication over a computer network, and is already widely used on the Internet. It’s also mandatory for PCI compliance. This uses encryption to ensure all sensitive information, including payments data, is transferred securely by making the data unreadable to all except the destination server. Implementing HTTPS on webpages with sensitive data will ensure that your payments data security is top notch.
- Two factor authentication: By combining a password and username with a second means of identification (like a code sent to a phone or email), two factor authentication providers an extra layer of security against identity theft and fraud. Allowing customer the choice to opt into two factor authentication will help them feel secure on your site.
- Tokenization: This protects sensitive information by replacing the data with random tokens that are impossible to read if intercepted. This tokenized data can only be read by a third party, like a payment processor.
- DoS and DDoS Protection: You’ve probably heard of a denial of service type of attack, where a website is bombarded by requests that overwhelm the bandwidth and render a site unavailable and vulnerable. A firewall can protect against these kind of attacks. Ecommerce sites in particular can incorporate firewalls like proxy firewalls or application gateways.
Conclusion

Maintaining payments data security is paramount for any ecommerce business. Educating yourself, implementing best practices, and selecting a trustworthy payment services provider with robust security offerings are excellent ways to reduce risk. Using payment data security best practices is essential for protected customers and a successful business.
Payarc

November 15, 2021

Industry Insights, Uncategorized

fraud-prevention
Using payment solutions to grow your meal prep business

Ecommerce merchants choose their industry sectors for many reasons. That’s half the fun of coming up with, and executing on, a business idea.

Sometimes your choice furthers a life-long passion, while other times it’s as simple as recognizing and filling a market need. Being first off-the-block is often a winning strategy for a sprint, but not so much in a marathon.

Of course, meeting market needs in the long-term isn’t really a simple affair. Long-term business viability falls more into the marathon category. What’s required are several layers of expertise — Some related to the chosen product or service, along with know-how in managing your business.

For example, a passion for healthy eating and good cooking may lead you to open a meal prep business. You’ll love the first stage, when serving delicious and nutritious food made with your own hands proves super-rewarding.

But for how long will that “hands-on” approach serve the business well, given your ambitions and the blossoming market in your chosen niche?

As your business grows, reaching out to others who possess the knowledge and skills — the expertise — you need isn’t always easy. But it might be the best option to support the growth ambitions you harbor.

Using the meal prep sector as a proxy for all ecommerce shops, let’s take a look at an example of tough decisions one merchant made while managing business growth. The business lessons demonstrated in the story remain universal, proving useful to all ambitious ecommerce merchants.

Another lesson to consider while in the growth phase of your business: Leveraging expert payment solutions helps online shops grow.

True Rapid Growth Story Shares Lessons for All

Business principles remain true for all merchants, regardless of the chosen sector. eCommerce may be relatively new, but the quest to launch and grow a business persists in all industries. Like the story of a couple whose meal prep business growth lessons will resonate with all small business owners.

Danielle Hrzic told the story to HuffPost. The Hrzics built a meal prep business to improve the quality of school lunches available in Chicago. Gourmet Gorilla began by producing meals and snacks for three area schools. Now they serve schools throughout Northern Illinois and Wisconsin.

As more schools and parents joined the service, the business outgrew their initial kitchen space, and also the ability for the Hrzics to remain “hands-on” with meal production. As Hrzic says, “Small business owners often feel the need to be a part of every aspect of the business.” Letting go can be hard.

But Danielle learned that she had to pull herself away from the business, “…to work on it instead of in it” — and the business expanded rapidly.

Merchants keen to launch their own payment prep businesses will find useful information on the sector here, including info on the types of expert payment solutions needed in the sector.

Become Expert on Business Growth

It’s one thing to work in a business, and quite another to own and manage one. Launching and running an ecommerce business, regardless of sector, takes a lot of energy and passion for what you do.

Some online merchants open up shop following business careers, but many don’t have the first clue about doing the books, ordering and managing inventory, or supervising employees. And without stellar funding and steady cash flow, hiring the expertise just isn’t possible.

Do you know about the standard business growth curve? From start-up to survival to success at various levels, and all the way up to mega-successful large corporations — five growth stages get you there.

Start-ups challenge even the best and brightest new merchants. Passion for your business only takes you so far, when cash flow makes or breaks the business. It’s financial survival that moves the company up the curve. And expert payment solutions help ensure financial success.

Reaching out to experts to help your company grow — and letting go when necessary — reflect mature resolve as an owner. Our featured story didn’t highlight payments, but it’s clear that selling to schools requires B2B payments expertise, and directly to parents means B2C payments.

Do other eCommerce merchants know enough about payments, to get past start-up and survival, then on to success? Like why a landing a merchant account reflects your best interests, and how to protect your payments from fraud? If not, payments may be an area in need of expert assistance.

Expert Payment Solutions Help eCommerce Shops Grow

No matter where your business falls on the growth curve, you need expert payment solutions to help you grow. To find payment solutions that will both save your money and give you peace of mind, look no further than PayArc.

Our mission is to bridge the gap between online merchants and payment solutions — for all types and sizes of merchants.

PayArc’s industry leading payment processing solution gives you all the tools you need to start accepting payments online, while lowering your risk to fraud and giving you some of the lowest rates in the industry.

We leverage strong industry relationships — developed over decades in the payments industry — to help you land an individual merchant account so you can start processing payments quickly and securely.

Take the headache out of credit card processing, so you can process with confidence. PayArc wants to act as your payments advisor and consultant, not only your processor.

You have a business to run. Our business is to help you run it better.

Give us a shout today.

Payarc

November 15, 2021

Industry Insights

payment-processing
HSAs and FSAs With PAYARC
If you’re a doctor or a merchant that sells medical equipment or supplies, you probably have to consider that patients and customers may want to use an HSA (Health Savings Account) or FSA (Flexible Savings Account) to pay. Perhaps you’ve been considering switching to PayArc,but aren’t sure if you will still be able to accept these forms of payments.Good news—you will! If your practice or business falls under one of the following MCCs, you will be able to accept HSA and FSA.
- 4119 –Ambulance Services
- 5975– Hearing Aids – Sales, Service, and Supply Stores
- 5976 – Orthopedic Goods, Prosthetic Devices
- 7277– Counseling Service – Debt, Marriage, Personal
- 8011– Doctors and Physicians (Not Elsewhere Classified)
- 8021– Dentists and Orthodontists
- 8031– Osteopaths
- 8041– Chiropractors
- 8042– Optometrists and Ophthalmologists
- 8043– Opticians, Opticians Goods and Eyeglasses
- 8049– Podiatrists and Chiropodists
- 8050– Nursing and Personal Care Facilities
- 8062– Hospitals
- 8071– Medical and Dental Laboratories
- 8099– Medical Services and Health Practitioners (Not Elsewhere Classified)
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Payarc

November 15, 2021

Uncategorized

payment-processing; hsa; fsa; healthcare
Mobile App Payment Gateway Integration 101
With more and more people needing to shop on the go, it’s become quite apparent that merchants must take their products and service to mobile markets to remain competitive. While many customers are spending money through in-app purchases and subscriptions in top app interfaces, such as the Apple Store and Google Play, there’s a significant demographic of purchasers who are ready to make their everyday purchases (event tickets, restaurant dinners, and utility bills) through mobile, as well.

Many merchants are already hard at work developing an app that unique to their business. They’ve already done the jobs of branding and making sure mobile shopping options are customized to their target demographic. All that’s left is to figure out how exactly to accept and process payments. That’s where a proper mobile app payment gateway integration comes in.

Is your company ready to meet the demand? Here’s what you need to know about mobile app payment gateway integration.

Payment Gateway Solutions

What options are available to merchants looking to attract and retain customers of all kinds? There are currently two ways to accept payments:

Merchant Account Provider (MAP) is the solution offered when the payment processor that you’ve chosen to partner with sets you up with your own payment gateway through your unique merchant account. It allows you to work with a bank to accept payments for your products and services.

You can also choose a Processing Aggregator. This would be a service like PayPal, Stripe, or Square, which combine all the business from thousands of merchants into larger merchant accounts. It allows them to work with most any merchant – without bank approval – to do business on behalf of almost anyone.

While it’s certainly easier to get approved for a processing aggregator, there are unique advantages to applying for a merchant account and getting your own payment gateway for your individual business. For one, getting approved for your own merchant account – and enabling your unique payment gateway – is based on your individual merit as a business. You’ve gone through the application process to have the ability to accept payments, and you aren’t lumped in with other businesses or may or may not be scrupulous. As such, you’ll have benefits that come with being deemed a better risk. Among them:
- More responsive and personalized customer service experiences. Have you ever tried to reach a live person at PayPal? Having a merchant account rep that has your back is a valuable perk for many businesses.
- Fewer interruptions to payment processing. You won’t have as much risk to waking up one day and finding your account frozen due to one transaction that doesn’t seem right. A dedicated merchant account gateway usually comes with more intuitive processing for dealing with potentially fraudulent activity.
- Access to your cash. With an aggregator, your money has to go through them as an intermediary, limiting your access to funds and lengthening the time it takes to request money. It can take up to a week to get cash from purchases into your bank account, and quick-turn requests may cost extra.
- Personalized pricing. Aggregators charge the same price to everyone, regardless of credit worthiness. If you’re a good business risk, you should have the option to negotiate better rates. This is one reason to consider a merchant account for your payment gateway needs.
Finding the Right Payment Partner

What should you consider when setting up your mobile payment gateway? For one, it’s not enough to find a gateway you love. Your payment processor should also be a partner in meeting your sales goals. When choosing a gateway, look for providers that are compliant, offer a suite of fraud prevention tools that can be tailored to your unique needs, and that act as an advocate on your behalf. The right payment processor can ensure that your gateway comes with a robust SDK (Software Development Kit), as well as API’s that are secure, glitch-free, and ready to take payments at the precise moment customers are prepared to buy.

While there is quite a bit to learn about today’s mobile solutions, you don’t have to go it alone. PayArc is a trusted industry partner well-versed in all of these options, and we can be reached with your questions or concerns regarding mobile app payment gateway integration. Our trusted team of advisors and payments specialists are the ideal choice for merchants who want personalized attention and service.
Payarc

November 15, 2021

Technology

mobile-apps-payments
How to beat business goals without breaking the bank
Business objectives drive the best choices every business owner makes.

At least, owners wanting to make money in the real world look to their business objectives when deciding how to take products to market.

Mobile app monetization represents one such choice that all app developers must make. Have you thought that through for your app?

Of course, you may have embarked on developing an app just because you love mobile technologies, and wanted to make your mark among tech peers.

If that’s the case, then good luck to you!

But if your objectives include earning your share of the projected $101 billion (with a B) app store revenue, then you owe it to yourself to learn more about mobile app monetization.

Let’s look at mobile app monetization models — and how to monetize your app without breaking the bank — by choosing the right business partner.

Considerations for Mobile App Monetization

Several models exist that support mobile app monetization. Which one is right for you? You may want to know which monetization model drives the most revenue, but no simple answer exists.

What really matters is that the monetization model you choose best suits your app. It needs to support your revenue and user adoption objectives — along with the product or service you’re taking to market.

Before you can choose the right answer for your business, it pays to be sure you’ve done the right marketing analysis. Such as:
- Who is your target audience? Determine their demographics and app usage patterns. Do they prefer video or perhaps written content consumption? Align your choices with the behaviors of your target market.
- Your Core Set of Users Includes ___? The most successful apps address a specific user pain-point. That’s a Marketing 101 truism. Yet many business owners overlook that solving a problem — aka providing value — for specific users generates profitability.
- Choose the mobile app monetization strategy which rewards match your app’s user value. Simply put, the more value provided by the app, the more users will be willing to pay.
Choose Among Mobile App Monetization Models

Pay Per Download: This is perhaps the most common approach to generating revenues with an app. But how do you convince a new user to pay the price you demand without letting them to try it first? If you can’t market your app as truly unique — compared to all the free apps out there — keep looking. Great marketing and PR are imperative with this model

Advertising App Monetization Model: You’ll find more people willing to download your app with no cost barrier (as in pay per download apps). The advertising model offers several “flavors.” It’s often used in mixed-model approaches. Common ad formats currently include:
- Banner Ads
- Native Advertising
- Video Ads
- Voice Ads
- Interstitial Ads
- Rich Media Ads
- Location-Based Ads
- Pop-Up Ads
- Notification Ads
You’ll find examples of these ad types here, here, and here.

Choose the advertising app monetization model if you expect users to visit the app frequently, and stay awhile during each session. You’ll also need to collect user demographic and behavioral data to ensure ads are relevant.

In-App Purchase Monetization Model: Do you plan to sell virtual or physical goods or services from your app? This model works well for retail, gaming, or services apps. It’s been the top mobile app monetization strategy used by high-earning game apps. Be sure to include well-designed purchase incentives that don’t spoil the user experience.

Freemium App Monetization Model: This strange-sounding model replicates the subscription model used in many ecommerce businesses. If you can attract free users, and then entice them with super-unique premium features, choose the freemium app monetization model. The 30 top grossing apps in the Apple App Store may be downloaded for free, but they all offer desirable premium content for a fee.

Subscription or Paywall Model: This app monetization model is similar to Freemium, but content is locked, not premium app features. Users are able to view a specific amount of content for free, but then must subscribe to the app to view more. Service-oriented apps succeed with this model (think Netflix or Spotify). The Subscription or Paywall model works well when the app itself inspires repeated — and frequent — use.

The bottom line is to choose the mobile app monetization model that fits your objectives, and the analysis of your target market. In-App Purchases and Subscription models continue to be most successful at driving revenue (33% and 22% respectively), according to a recent study by Apptentive. But a hybrid approach may be best for your app. Let objectives drive the choice.

Put a Cherry on Top with PayArc

Regardless of which mobile app monetization model you choose, your business definitely requires the right payment processing capabilities. They provide the cherry on top when you go to market!

Because, if you cannot accept payments via your app, then dreams of monetization go out the window. Be sure to choose a processor with a mobile app payment gateway optimized for your success. Choose PayArc.

Our mission is to bridge the gap between online merchants and payment solutions — for all types and sizes of merchants and app developers.

PayArc provides merchants with the latest technology and pay options allowing them to focus on growing their businesses. And PayArc’s mobile SDK makes it easy to integrate mobile payment solutions into your app.

Our industry leading payment processing solution gives you all the tools you need to start accepting payments while lowering your risk to fraud and giving you some of the lowest rates in the industry.

PayArc wants to act as your payments advisor and consultant, not only your processor. Because you have a business to run… Our business is to help you run it better. Put the cherry on top… Start processing with PayArc today.
Payarc

November 15, 2021

Security

mobile-apps-payments
Midigator: Simplify Your Payment Disputes
Chargebacks are a huge problem that face merchants today. The incidence of friendly fraud is around 23% of all fraud claims, so disputing chargebacks can be a big benefit to your business. There are several services designed to help merchants manage their chargebacks, including Midigator: a user-friendly, effective software with many features to make disputes easy to keep track of. If you’re concerned about how chargebacks are affecting your business, consider monitoring them using Midigator.
- Intelligent Dispute Responses: This feature will generate a customized chargeback response that analyzes evidence relating to the chargeback and helps you build a package to win the dispute.
- Chargeback Prevention Alerts: When a customer disputes a transaction and the issuing bank sends an alert through the network, Midigator informs you of the chargeback and allows you to easily refund the customer, stop order fulfillment, and update order information. Once this has been done, the dispute is resolved and no chargeback occurs.
- In-Depth Analytics: With the analytics feature of Midigator, you can identify marketing strategies that produce more high-risk customers and discontinue them, while also zeroing in on strategies that produce loyal customers; determine the chargeback reason code that most often turns up in order to reduce friendly fraud; find out when in the subscription cycle customers are most likely to file a chargeback and remind them of your cancellation policy instead; learn which products are being charged back the most and reduce the risk by removing those items from your inventory; discover new markets overseas and see if the reward is higher than the risk and which price point is most likely to make customers charge back the purchase; and determine the preferences of different issuing banks to create the best strategy for winning a chargeback.
- Custom Notifications: Pick which metrics you want to monitor and receive email or dashboard notifications about them: Chargeback Ratio, Chargeback Count, Chargeback Dollar Amount, Total Sales, Transaction Counts,and Card Network Regulations.
- Real-Time Account Reporting: Midigator compiles your data for you to see in real time so you can make educated decisions about your business.
- DisputeFlow: Instead of manually downloading chargeback data from different portals, copying and pasting data into documents, struggling to understand submission expectations, and wasting time searching for response results, Midigator’s DisputeFlow feature receives all chargeback information in a single portal,builds dispute responses, sends packages with one-click submissions, and monitors detailed reporting and automatic results. This significantly cuts down on the time and frustration spent on fighting chargebacks.
Midigator is a unique software built for merchants, by merchants. If you want to prevent chargebacks and reduce payment processing risk, fight chargebacks and recover lost revenue,and automate tasks and streamline processes related to chargebacks, Midigator may be right for you. After all, your business depends on have the least chargebacks possible!

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Payarc

November 15, 2021

Fraud Prevention

chargebacks; fraud-prevention; payment-processing
Merchant Account Providers Vs Processing Aggregators
Are you planning to launch a new eCommerce business? What an exciting, busy time it will be — if a bit scary.

Of course, if you’re a veteran of online merchant gigs, you’ve no doubt learned a thing or two about launching and building an eCommerce business.

But have you learned enough to find early success with your new venture? Like are you au fait with payment processing… including the benefits of merchant account providers vs processing aggregators?

You’re determined to choose wisely — to support your business needs now, and beyond the heady launch days.

American comedian Eddie Cantor said, “It takes 20 years to make an overnight success.” But does it really? Perhaps by understanding your payment processing choices, and choosing wisely to support your unique needs, it won’t take that long.

Let’s take a look at what merchants need to know about merchant account providers vs processing aggregators.

Key Terms — A Very Good Place to Start

Defining key terms helps ensure we’re on the same page.
- Merchant Account Provider (MAP): Payment processors that help merchants attain their own — individual — merchant accounts at acquiring banks. Without a merchant account agreement (between the merchant and a bank), businesses cannot accept payment cards to sell goods or services.
- Processing Aggregator: Also called payment aggregator, or simply an aggregator, these services utilize their merchant accounts to process payments for many, many merchants — who don’t require bank approval, and face very little scrutiny. Well-known aggregators include PayPal, Stripe and Square.
Processors of either type act as middlemen between merchants and payment card companies. They send transaction data (like payment card number and purchase amount) to the card networks’ interchange, to be routed to customers’ issuing banks for approval.

Approved and settled transactions result in money being deposited via the funding process into the related merchant account, to be paid eventually into the merchant’s business bank account.

Every Business Choice Brings Pros, Cons, and a Few “Gotchas”

When seeking to make your merchant account providers vs processing aggregators choice, pay attention to the pros and cons of each. With many choices available, what matters is what’s best for your business.

So be sure to identify your requirements, growth plans, and what you care about most. Don’t simply take the easy route. If you’re concerned about business longevity, do your due diligence and choose carefully.

Pros and cons — and “gotchas” to watch out for — of merchant account providers vs processing aggregators include:

Start Up Process: Aggregators represent a low entry barrier. With almost no scrutiny applied to merchants’ personal credit histories or business plans — no application fees — and relatively easy implementation, new merchants can be up and running very quickly.

Because little scrutiny is applied to applicants, the mix of merchants using processing aggregators carries a higher risk for fraud than most merchant account provider portfolios, leading to another issue…

Account Stability: Unfortunately, the primary aggregator reaction to suspicious activity or irregular transaction behaviors is to:
- Freeze your account,
- Hold your funds for up to 180 days, and/or
- Terminate your account…
…Often without warning.

So yes, landing your own merchant account means a lengthier application process because bank underwriters perform due diligence to understand your business plan, personal credit history, and industry focus before approving your application.

But once approved, you’ll see fewer interruptions to your payment processing. And merchants will be notified if unusual activity occurs — rather than waking up to a frozen or terminated account.

Customer Service: This is the least appreciated aspect of the aggregator business model. PayPal finally added “live” customer support capabilities after years of complaints about slow, ineffective email support. Now, merchants who don’t want their calls to languish in a queue purchase “Enhanced” or “Premium” support services ($159 or $459 per month). Stripe and Square offer only email support. Their merchants complain about slow response times too.

Funding: Did you notice the use of eventually above? Well, when you process with an aggregator, the monies earned flow into the aggregator’s merchant accounts, not directly to the merchants who made the sales. Merchants may need to request their funds from an account portal, following a set schedule (PayPal). If merchants want their money more quickly, they can request it and pay an extra fee.

Aggregators may take up to a week to transfer the money you earned (minus their fees) to your business bank account, whereas a merchant account provider transfers gross funds within 1-2 business days and bills merchants monthly to collect processing fees.

Processing Costs: Aggregators’ rates are fixed for all merchants. Easy to understand, the rates include a fixed percentage of each transaction amount, plus a flat fee. For example, one aggregator charges 2.9% plus $0.30 per transaction. Note that aggregators are also adept at creating and charging additional fees for services often provided at no extra charge by MAPs.

On the other hand, merchant account providers offer more competitive pricing because they tailor rates to each business, sometimes offering very competitive rates.

Aggregator fixed rates work well for startups that process few transactions, but become quite pricey as businesses grow. Not only that, but processing aggregators enforce low processing limits. Exceed the limit, and risk account termination.

So merchants wanting to grow their businesses quickly — and without harsh limits — will find their interests better served by merchant account providers vs processing aggregators.

Only you can decide which better serves your needs, merchant account providers vs processing aggregators. Just remember that your business success is at stake when you make your choice.

Conclusion

When you need an eCommerce payment solution that both saves your money and gives you peace of mind, look no further than PayArc.

Our mission is to bridge the gap between online merchants and payment solutions — for all types and sizes of merchants.

PayArc’s industry leading payment processing solution gives you all the tools you need to start accepting payments online, while lowering your risk to fraud and giving you some of the lowest rates in the industry.

We leverage strong industry relationships… developed over decades in the payments industry… to help you land an individual merchant account so you can start processing payments quickly and securely.

PayArc wants to act as your payments advisor and consultant, not only your processor. Because you have a business to run… Our business is to help you run it better. Why not start processing with PayArc today?

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Payarc

November 15, 2021

Industry Insights

payment-aggregators