Industry Insights - PAYARC

What to Do About Post-Holiday Returns
Post-holiday returns are a reality for merchants of all shapes and sizes. Last year, UPS projected a whopping 1.4 million returns on January 3, 2018. Ecommerce returns are projected to smash previous numbers, meaning merchants need to get prepared.

Jared Ronski discusses tips for merchants to get a handle on post-holiday ecommerce returns to keep customers happy and chargebacks at bay.
- Have a crisp return policy
- Automate
- Keep things flexible
Providing a clear returns policy that supports automation on the merchant’s backend and flexibility on the consumer-facing side is a win-win. Merchants should conduct post-mortems after each holiday season to see what can improve and how previous years’ experience can inform future years’ policies and processes. You can read the full article here.
Payarc

November 15, 2021

Industry Insights

fraud-prevention
What’s a Chargeback? Understanding Different Types of Ecommerce Fraud
If you are a new merchant in ecommerce, you will likely find yourself asking “what’s a chargeback?” at some point. Chargebacks are an unfortunate reality for online merchants, though with the right knowledge and planning, chargebacks can be minimized. A chargeback is happens when a customer disputes a charge with their payment card issuing bank and the bank refunds the transaction to the customer.

Thoroughly understanding the answer to the “what’s a chargeback” question can help a merchant prepare. There are various types of chargebacks, but all have negative consequences for merchants by way of fines, fees, penalties, and damage to a business’ reputation.

If the “what’s a chargeback” question is still perplexing to you, don’t worry. We’ll walk through the different types of chargebacks and how you can avoid them.

“What’s a Chargeback?” Type #1:True Fraud

When evaluating the types of chargebacks, the first term you need to understand is true fraud, or unauthorized use. This happens when bad actors use stolen payment card information to make a purchase and the true cardholder files a chargeback to dispute an unauthorized charge.

This type of chargeback typically occurs as the result of identity theft of card skimming. Fraudsters gain access to a cardholder’s payment card data and use the information to make unauthorized purchases, which the cardholder becomes aware of when reviewing the monthly statement. In some cases, however, unauthorized use could be the result of a family member making a purchase without the actual cardholder’s knowledge. This is a less nefarious type of chargeback, but just as costly for merchants. Simple miscommunication among family members could result in a chargeback that costs the merchant in lost merchandise, shipping fees, and fines incurred by the card networks.

“What’s a Chargeback?” Type #2: Friendly Fraud

Friendly fraud is not “friendly” at all. This happens when a customer seeking a refund chooses to bypass the merchant and go directly to the issuing bank in an attempt to achieve the desired outcome. This can occur if a merchant has a confusing or “unfair” return/refund policy—or if the merchant has no refund policy at all.

After receiving the product, some customers may claim that they were unaware of the purchase or say that they never received the product or say that they returned the product without receiving credit for their return. Simply put, the customer could be looking to use the product or service without paying for it.

In these cases, customers claim they never received the product or were unaware of the purchase, even after receiving the merchandise. In some cases, a customer may claim they returned the product and did not receive a credit for it. This can happen with digital services as well. Regardless of the type of purchase, the customer is seeking to defraud the merchant through dishonest means.

This type of chargeback can be combated by having clear returns and refund policies that are clearly listed on the website. Having excellent shipment tracking and delivery confirmation that requires a signature can also aid in avoiding and/or fighting these types of chargebacks.

Tips for Preventing Chargebacks

Here are some tips we have compiled if you’re looking to prevent chargebacks:
- Use Proper Authorization Protocol: When processing card-not-present (CNP) transactions, use AVS and CVV2 to confirm the purchaser’s identity. Protocol like 3D Secure 2.0 can add an extra layer of security to online transactions and cut down on chargebacks.
- Make Sure the Billing Descriptor Is Clear: Many disputes happen because of confusion or miscommunication. Merchants can eradicate these types of chargebacks by using clear billing descriptors, which include the merchant name (DBA) and other details that identify your business. When the customer checks their card statement after making a purchase with you, there will be less confusion about when or with whom the purchase was made
- Clearly Present T&Cs and Policies: Having clearly articulated and posted terms & conditions, return policies and refund policies can cut down on chargebacks.
- Optimize Customer Service: Merchants should have properly staffed customer service phone lines that minimize wait times. Allowing customers to contact by email can be beneficial as well—so long as emails are promptly (within 24 hours) returned. Also consider implementing chat lines to quickly address customer issues.
- Work With a Reputable Payment Processor: Working with a trusted payment processor that offers consultative services regarding chargeback management can save merchants hundreds of thousands of dollars in the long run. Having a chargeback prevention plan—and a chargeback management strategy—is essential to guarding hard-earned profits from true and friendly fraud.
Payarc

November 15, 2021

Fraud Prevention, Industry Insights, Security

chargebacks
What’s the Difference? Retrieval Request vs. Chargeback
Perhaps you spent a restless night, and awoke with a glimmer of the nightmare that kept restful slumber at bay. That lingering memory nagged repeatedly at the edges of every waking thought today.

Is that why you stumbled a bit when delivering the new training session during your employee meeting this afternoon? A word hovered just out of reach… On the tip of your tongue… Until zing, there it was.

You retrieved the word just in time and pulled it off. Not another hitch in your delivery — every speaker’s nightmare averted. Congrats!

If only transaction information was as simple to retrieve, not scattered around your office or floating somewhere in the Cloud. Easier access to the online orders processed last month, the confirmation emails sent, and the shipping notices you’re sure went out, but can’t seem to find…

…Would make answering the retrieval request received this morning so much simpler. You’ve never gotten one before, and aren’t sure what it means or why it’s important to respond so quickly.

If you can’t explain retrieval request vs. chargeback to yourself, much less to your team, keep reading. Then, work on getting your data ducks in a row.

Retrieval Request vs. Chargeback — How They Differ

When payment card statements arrive each month, cardholders sometimes don’t recognize charges. What’s the cardholder to do? Often, they ring the issuing bank to say they don’t recognize a charge… Setting in motion a request by the bank for information in support of the transaction.

A retrieval request is simply a request by the bank for information to support the transaction. The bank wants to see legible copies of the actual sales ticket (or online order), and the transaction authorization.

(American Express calls these requests “inquiries” while Visa, MasterCard, and Discover use the label “retrieval.” Some banks call them “soft chargebacks” — your first clue to why retrieval requests matter.)

Of course, the transaction may be legitimate, but the cardholder doesn’t recognize it. Other possibilities include a processing error, incomplete or inaccurate transaction information, or the worst: potential fraud.

Merchants reply to retrieval requests by providing the requested information to the bank. Also useful is to reach out to the customer by email or phone to discuss their issue. Doing so may help to resolve it, and avoid a chargeback.

Chargebacks occur when a cardholder requests a refund for a transaction directly from their issuing bank. The customer may declare the transaction illegitimate, because the goods weren’t delivered — weren’t as advertised — or arrived damaged — and she demands her money back.

The issuing bank supports the cardholder and contacts the merchant’s bank to put a hold on transaction funds. The cardholder receives a refund, and the merchant receives a penalty in the form of a chargeback fee.

Merchants can dispute chargebacks by providing transaction records, shipment records, proof of delivery, copies of any correspondence with the customer, and proof of money transfer — if the merchant already refunded the purchase.

Specific and limited timeframes for response vary, and must be honored.

If the documentation he provides supports the merchant’s dispute, a chargeback reversal occurs.

Is it any wonder that good record keeping is important? Responding to retrieval requests or disputing chargebacks efficiently and timely become more difficult when your data ducks aren’t organized into nice, neat rows.

Managing chargebacks well improves your online business success. Read more chargeback basics here, including steps to take with your website, business processes, and data to help prevent fraud-related chargebacks.

Why You Should Care

The good news about retrieval requests is that no money changes hands — yet. A retrieval request simply means that a cardholder or the issuing bank needs more information about a transaction.

But the bad news is that a retrieval request denotes the first step in the chargeback process. If you don’t respond to a retrieval request within the timeframe (usually 10 to 20 days), a chargeback occurs.

Retrieval request vs. chargeback important considerations include:
- No money changes hands due to a retrieval request — yet. Merchants retain the money made from the sale during the inquiry. Once a chargeback occurs, merchants lose the money from the sale (it’s refunded to the customer) and also pay chargeback fees.
- Plan to resolve the inquiry in a timely and efficient manner. No response from a merchant means that a chargeback is issued with the reason, “requested item not received.” Should that occur, the merchant loses reversal rights for the transaction too.
- Merchants may issue customer refunds during the investigation period without penalty. Contacting the customer via phone or email to address their questions and seek a solution might satisfy both parties. If the customer doesn’t respond, issuing a refund directly may solve the problem and avoid a chargeback.
Remember that credit card brands set and enforce these rules. Keeping your online business viable is at stake, so if you’ve been ignoring the issue of retrieval request vs. chargeback, it’s time to pay attention!

Let PayArc Help

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

PayArc offers leading-edge payment processing from seasoned professionals with years of experience in the payment industry. We provide you with a customized solution that’s right for your business.

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.

We’ll provide you with the latest technology and pay options, allowing you to focus on growing your business.

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.

So, let’s get your ducks in a row… Start processing with PayArc today.
Payarc

November 15, 2021

Fraud Prevention, Industry Insights

chargebacks
Why Your Payment Aggregator Doesn’t Want You to Make Money

There are many businesses that swear by payment aggregators due to the fact that it makes starting that business much easier. The payment aggregator choice has risen in popularity in recent years because it allows a merchant to accept online payments without having to set up a formal merchant account.

Payment aggregators enables merchants to accept credit card and bank transfer payments without obtaining their own merchant account through a bank. Instead, one merchant account is used by a number of merchants. But is that all there is to it?

Online statistics firm Statista predicts that more than 100 million Americans will use peer-to-peer payments in 2020 due to the convenience and simplicity that payment aggregators offer. However, there’s more that you should know about how payment aggregators operate if you choose to put your faith in the hands of PayPal or Square when starting your business.

What Should I Know About the Main Aggregators?

PayPal is the biggest payment aggregators in the business right now due to sheer volume as the service amassed $13.09 billion in revenue in 2017, per Statista. Plus, the total payment volume conducted through PayPal last year reached a whopping $451 billion. As you can imagine, the company makes most of its revenue from the fees it charges companies to conduct their business through the site and application.

Much like it rival payment aggregators, PayPal doesn’t charge you for opening an account through the site. However, accepting payments on credit or debit cards through e-commerce partners such as eBay will cost you a 2.9% fee, as well as $0.30 of the amount received for a purchase.

Square has a similar business model, although its fees are dependant on the payment method used to buy a product, which fall under swipe transactions or manually-entered ones. Swipe transactions cost merchants a 2.75% fee, while manually-entered transactions cost 3.5%, as well as $0.15 of the total transaction amount.

In 2017, Square raked in $2.2 billion in revenue from these fees. Plus, the gross payment volume of business conducted through the payment service reached $21.37 billion during the company’s second quarter of fiscal 2018.

Meanwhile, Stripe charges a 3.4% plus $0.50 of the total amount paid when your business accepts a credit or debit card payment. Payments used through its services, which include Alipay or WeChat Pay, will set you back 2.2% plus $0.35 of the payments. So while all of these options make your job easier, these fees add up in the long run, taking a considerable chunk of your profit off.

Benefits of Using an Aggregator

The most obvious benefit of choosing the likes of PayPal or Square to handle your payments is how quick the application process is. Attaining your own merchant account is not an easy process because you’ll require approval from a bank, which means that all your ducks need to be in order and then some.

Meanwhile, getting approved with an aggregator is a much shorter process that doesn’t require you to present PCI DSS compliance and every single document and license pertaining to your business. Plus, setting up your own merchant account means that you will be responsible for all the risks linked with chargebacks and fraud.

With a payment aggregator, you can start accepting card payments almost immediately after getting approval from the company. This is because setting up your e-commerce payments or even face-to-face ones with a mobile swiper on your cell phone is as easy as it sounds with an aggregator.

Plus, having a straightforward fee structure with no surprises means that you know what you’re getting yourself into. Choosing a payment aggregator may sound like the obvious choice when you consider all these elements, but there are a lot of negatives linked with companies such as PayPal that could mark the end of your business venture.

Short- and Long-Term Drawbacks Trump Benefits

There are some massive drawbacks associated with choosing a payment aggregator, with the main one being the fact that it’s very easy for aggregators to put your account on hold for anywhere from 24 hours to 30 days. This is due to the fact that payment aggregators are responsible for handling the risk associated with fraud, which means that any suspicious activity results in an account suspension.

You won’t get any warning when this happens and there are dozens of situations in which a payment may be seen as “suspicious.” For a person trying to run a business, these account freezes have a negative effect on your ability to pay employees and make other business expenses in a timely fashion.

Other problems associated with payment aggregators include the fact that they make it very difficult for high-volume merchants to operate and grow due to the fact that they have fixed rates and low processing limits. Even a small business that wants its sales to grow above $3,000 per month will struggle to conduct their work smoothly without facing some roadblocks.

Processing rates are also usually quicker through an individual merchant account as funds will be available to you more swiftly, often within 48 hours of the transaction being approved. Plus, aggregators are notorious for having poor customer service due to the high volume of businesses and individuals that they have to deal with.

If you don’t want to be held up in a queue, you’ll have to pay up to $459 a month with PayPal to skip the line, an amount that is quite similar with other services. On the other hand, the holder of an individual merchant account is more likely to give you their full, undivided attention in a timely manner without charging you extra to do so.

All in all, these popular payment aggregators do more to prevent you from running your business than they facilitate it. From fixed limits, low processing limits, account freezes and termination to additional charges that you face later on, you will spend plenty of time and money simply trying to ensure that your business runs smoothly with an aggregator.

An individual merchant account may be harder to get, but your life is much easier and cheaper once you do set one up.

If you’re hoping to find one of the simplest and most reputable payment processing services in the world, our team at PayArc walks you through the process of setting up the types of payments you receive without any surprises. Plus, we offer industry-standard encryption and the best risk-mitigation tools to ensure your business runs as smoothly as possible.

Payarc

November 15, 2021

Fraud Prevention, Industry Insights

payment-aggregators
Subscription Friction: How Online Subscription Can Improve Customer Experience
Consumers can now purchase almost anything as part of a subscription: software, digital marketing tools, streaming content, beauty products, alcohol, and clothing.

The sky’s the limit for subscription merchants. Many startups have opted to go the subscription route, aiming for the elusive and much-desired recurring revenue that comes from subscription purchases. Some sources claim that the demand for subscription boxes alone (think Stitch Fix or Trunk Club), has grown by 3,000 percent.

As the subscription market becomes more saturated, online merchants need to find new opportunities to strengthen relationships with existing and prospective customers. A major part of this is providing a seamless online shopping and checkout experience. Eliminating friction is paramount and can be achieved by following some best practices.

E-Commerce Best Practices for Online Subscription Merchants

There are several things online merchants can do to improve the customer experience, streamline the path to purchase, and optimize checkout for consumers:
- Include a wide variety of accurate, detailed product photos if you’re selling physical product subscriptions
- Include product or service reviews by past purchasers
- Include a “products/services you may also be interested in” section on your website that makes intelligent recommendations based on prior purchases.
- Offer a free trial where possible and remind customers via email when their trial is about to expire with a prompt to upgrade to a paid subscription
- Pre-fill forms where possible. If a user already signed up for a free trial, use intelligent form fills to make it easy for them to upgrade
- Include a checkout progress bar that notifies the user where they are in the process (customer information > shipping information > payment information > confirmation)
- Offer competitive shipping rates and delivery windows
- Send confirmation emails that include shipping or activation information
These are only a fraction of the things online subscription merchants should be implementing to improve customer experience and optimize the path to purchase. They also don’t begin to cover the payment processing best practices that subscription merchants should consider to retain customers.

Online Subscription Payment Processing Tips

Subscription merchants face different challenges than regular online merchants. The ongoing nature of the business relationship requires special treatment when it comes to payment processing.

Gateway Considerations

Some gateways provide recurring payments features that can be activated for subscription merchants. There are also some third-party solution providers that offer recurring payments functionality as an add-on to your existing gateway. These tools simplify recurring transactions by enabling the merchant to enter the charge amount information and frequency only once, triggering automation of payments moving forward. The customer’s payment card is billed at the appropriate time and a receipt can be automatically emailed.

Compliance Considerations

Merchants should be sure that their gateway or recurring payment solution provider offers a PCI-compliant solution that facilitates secure online access and payment card data management. Some solution providers offer two-factor or multi-factor authentication options. Others enable the merchant to provide different levels of access to the gateway or app, limiting access only to users who need it. Some providers also store data using several layers of encryption in a segmented network with new encryption keys being generated daily.

Churn Considerations

Churn can be an uphill battle for online subscription merchants. One of the most common causes for unnecessary churn is when a payment card has insufficient funds. This is especially an issue with debit cards and can be resolved by updating billing and retrying strategies. For example, updating monthly billing dates to coincide with regional payday cycles is one option. Updating retry time from one hour to a space of three to four days can also be helpful in optimizing billing.

Another common occurrence is expired card declines. If a merchant does not have the most up-to-date information about a payment card, the transaction will decline. Utilizing an account updater tool to automate the process of updating card information can streamline operations and ensure that a transaction will not be lost due to a card expiration. It’s the same scenario in the case of a lost or stolen (or hacked) card. When a card is reissued to a cardholder, they often forget to update the payment details for their numerous online subscriptions. Account updater tools can handle these types of updates automatically, ensuring a seamless transition and minimal churn.

As the online subscription-based service and product offerings continue to evolve, merchants will have to evolve their internal processes – from digital marketing to payment processing – to keep up. Managing customer happiness while catering to prospective customers can be a balancing act. Employing automated recurring billing can streamline the process for existing customers while freeing up merchants to focus on new revenue. Working with a digital payments advisor to identify tools that can aid your subscription billing operation can save you money in the long-run and improve your recurring revenue stream.

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Payarc

November 15, 2021

Industry Insights

payment-processing
The Benefits of Cash Discount Programs for Merchants
When you combine merchant fees with dynamic interchange fees issued by credit card companies, accepting credit cards can be costly and confusing for a small, growing business.

Customers often want to use their preferred method of payment, so not offering credit card payments isn’t an option.

First, let’s dig into the different types of fees before determining if a cash discount program is right for you.
- Merchant fees are typically flat rate fees paid by the merchant to the issuer of the point-of-sale (POS) terminal every time you run a transaction.
- Interchange fees, which are levied by the credit card companies, often include a flat rate transactional fee plus a percentage of each transaction.
How do Customers Typically Want to Pay for Goods?

There isn’t a one-size-fits-all answer. It depends on a variety of factors.

A 2016 study of 1,000 consumers indicated that “40 percent chose credit cards, while 35 percent selected debit cards and only 11 percent specified a preference for using cash.”

But as soon as you factor in considerations like transaction value or even store type, those numbers change dramatically.

It’s important to consider your average transaction value and business type when determining whether a cash discount program may be right for your business.

If you’re a business with a low average transaction value, like a nail salon or a coffee shop, merchant and interchange fees can add up to thousands of dollars a month. To combat this monthly expense, some businesses add a surcharge fee when customers pay with a credit card.

Credit card surcharges have somewhat of negative connotation among consumers, and some states even prohibit businesses from charging these fees. The following states don’t allow surcharges:
- Oklahoma
- Maine
- California
- Texas
- Colorado
- Connecticut
- Kansas
- New York
- Massachusetts
- Florida
In some cases, surcharges don’t make business sense. A low average transaction value and high credit card usage among your customer base, it may make sense to implement a cash discount program.

What are the Benefits of a Cash Discount Program?

A cash discount program offers merchants a way to offset tiered fees incurred when running credit card transactions.

A cash discount program allows merchants to implement a service fee (no more than 4% per transaction) to customers that pay via credit card while offering a discount to customer that pay with cash.

Cash discount programs require merchants to provide at least one notification before purchase that service fees are added to purchase, though multiple points of notification are recommended. Information about the service fees must also be included on customer receipts.

A cash discount program often encourages many customers to pay cash, which in turn reduces the transaction volume fees you incur from the credit card companies, your bank, and the terminal leasing fee needed to run credit cards.

In fact, you can use the money you save and your additional cash flow to reinvest in your business—something your customers will likely appreciate. If you’re a coffee shop, for example, you can use your new cash flow to make WiFi free or add a few comfortable couches for your guests to relax in.

If you’re considering a cash discount program, you will need a specialized vendor. Look for a vendor that has a varied fee structure that works with your business and average ticket size. This is rapidly growing subset of payment processing, so there is an abundance of companies to choose from.

How to Select a Cash Discount Program Vendor

Do your due diligence and ask potential vendors how much their customers save on average. You may also ask to view a sample receipt and check out their BBB rating. Your vendor’s technology should allow you to accept all credit card types, mobile wallets and EMV chip cards. Finally, make sure they disclose all fees to you.

Pricing usually comes in two forms; a flat rate, which works great for high transaction volume but low average transaction value, or a percentage of sale, which is ideal for businesses with a high dollar transaction value. Also, your vendor might offer free in-store signage to make your customers aware of the change.

PayArc has recently launched our Cash Discount Program, and we’re looking for motivated merchants to partner with. If you’ve been considering implementing a cash discount program, contact us today so we can show you the incredible savings we can provide.
Payarc

November 15, 2021

Fraud Prevention, Industry Insights, Security

payment-processing
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 New Commerce Playbook: Aligning Your Online & Offline Strategies
Ecommerce has eclipsed traditional brick-and-mortar commerce, but that is only the beginning of the story. Ecommerce continues to get more and more complex with mobile commerce, conversational commerce, and cryptocurrencies.

The moral of the story is that the offline and online worlds are converging and merchants need to follow a new roadmap that accommodates omni channel commerce.

Your omnichannel mantra should take a like from Field of Dreams: “If you build it, he will come.” Meaning, if you build a great omni channel experience, the customers will show up. Why? Because omni channel is all about meeting the customer’s’ needs and offering the opportunity to buy how, when, and where the customer prefers.

Understanding the Omni Channel Approach

The focus has largely been on perfecting the ecommerce experience – and the data supports that push. According to census.gov, the total ecommerce sales estimate for Q3 of 2017 increased 15.5% over Q3 of 2017, topping out at an estimated

$1,268.9 billion. Every merchant wants a slice of that pie. But there’s a much bigger slice available to merchants that make every path to purchase a pleasant one – and that goes beyond the online experience.

Brick-and-mortar and ecommerce experiences should go hand-in-hand and support each other. It’s not an either-or proposition. The best way to ensure you’re on the right track with all channels is to ask “Shopping at StoreX would be easier if_______.”

Optimizing Customer Experience to Win Big Across Channels

Customers are inclined to make purchases that are easy. That may mean bridging across channels at different stages in the purchase process. If merchants are not prepared to offer a path of least resistance, the customer will often abandon the purchase. So how can merchants ensure that the path is short, unobstructed, and well-lit? Here are some best practices based on recent consumer trends:
- Offer in-app or online purchases that can be picked up at a physical store (offer ship-to-store for online purchases, too).
- Provide online or in-app maps for specific products in the store (including aisle # and inventory count)
- Provide barcode scanning technology within your app that allows customers to see detailed product information.
- Allow app users to create wish lists (or general shopping lists) that can be saved and shared.
- Test products online before bringing them in-store (many customers webroom – researching products online before going into the physical store to buy).
- Offer free shipping on returns for items purchased online
- Enable social shopping, where customers can purchase items displayed in your Instagram feed using a platform like Like2Buy
- Use social data to organize your brick-and-mortar store based on product popularity on social channels like Pinterest
Ensuring a Seamless Experience from Start to Finish

Implementing some of the tips above can make for a positive customer experience, but what about when it’s time to pay? Merchants need to remember that the payment process is also a part of the customer experience, no matter on which channel the transaction takes place.

Brick-and-mortar merchants should have up-to-date POS systems that are up to EMV standards. For busier stores, many retailers enable their salespeople to check people out via smartphone or iPad to cut down on long waits in line.

Online merchants have a few more nuts and bolts to consider. Card-not-present transactions pose extra risk, so merchants need to be sure their fraud prevention tools are up-to-par to combat the latest schemes and fraud. Online payment processing also needs to be PCI-compliant to protect sensitive cardholder data.

Those precautions are table stakes. To provide a truly positive experience, merchants need to consider the best path from website visitor, to shopper, to buyer. This means presenting a clean, easy-to-navigate website or app experience. It also means making the checkout process as seamless as possible. A few tips:
- Accept a wide variety of payment forms. This includes the major card brands but also alternative methods like PayPal. Be sure to display the “payments accepted” information prominently.
- Enable a progress bar during the checkout process so customers know how many steps they have completed and how many they have left. Use intelligent forms and geolocation to autofill information where possible.
- Be transparent: display all costs on a single page (products, taxes, shipment) so there aren’t any surprises at checkout. If you’re international, you may also want to consider currency conversion so that non-domestic customers can see the total price in their local currency.
- Don’t require registration to checkout. New customers may not want to register right away, so don’t make it a requirement for them to finish the transaction.
It’s important to remember that customers don’t think in “channels” but rather experiences. Optimizing both is the merchant’s responsibility and it extends from the moment a customer sets foot in your store (or eyes on your site) all the way through payment.
Payarc

November 15, 2021

Industry Insights, Security, Technology

mobile-commerce
Mobile Ecommerce Trends 2018: The Customer Rules
Mobile app developers know they’re onto a good thing — especially those planning to monetize app ideas. Consumers love apps, including apps used to shop for all sorts of treasures.

Retail experts at Forrester predict mobile payment transactions to account for $282.9 billion (in the U.S. alone) by 2021. Indeed, they predict a compound annual growth rate (CAGR) of 20.3% until then.

Forrester also highlights benefits of customer loyalty and engagement ROI that accrue to retailers either setting or following mobile commerce trends.

Clearly, you’ve joined the m-commerce movement at a great time.

And like any good retailer, it pays to keep up with the trends influencing both consumers and competitors. One thing’s for sure in 2018: The Customer Rules.

But what mobile commerce trends might affect your success this year? Let’s take a look.

Smartphones & Tablet Users Hail Apps 5 Hours Per Day

Does anyone even remember the days before smartphones and tablets? No quick peaks at Facebook or Twitter between meetings. No email shadowing you everywhere, twenty-four/seven.

We’re talking only fifteen years ago. Yet it seems akin to “way, way back in time” when we made do with old-style mobile phones.

According to an MIT Technology Review article by Michael DeGusta, “The era of the smart phone in America really began in 2002, when existing PDAs took on the ability to make phone calls.” About five years later, Apple launched the iPhone.

MIT’s question at the time of their study (2012) was whether smartphones and other mobile devices were achieving mainstream adoption faster than any other technology in human history.

Unanswerable then and now, yet the number of users worldwide continues logging impressive growth. Tablet market adoption followed a fast track too. Mobile commerce trends both drive and benefit from garnering one third of most marketing budgets.

More to the point today, US consumers now spend five hours per day on mobile devices, with 92% of their time spent in apps. Page down a bit in that link, and you’ll see the breakdown of favored app categories, according to a study by analytics firm Flurry.

M-commerce shopping accounted for $22.7 billion (or 21%) of online spend in the 4th quarter 2016. No doubt 2017 results will outpace that. So, app developers: You’re in the right space at the right time.

Three Mobile Commerce Trends to Embrace

A Google search on “mobile commerce trends 2018” returned more than 2,000,000 results at the time of writing. Let’s review one.

Lacie Larschan, writing for Granify (purveyor of AI-based eCommerce tools) identified three customer-centric mobile commerce trends for 2018:
1. AI-Backed Everything
2. One-Click Payments
3. Blended Offline – Online Experiences
Mobile eCommerce (m-commerce) has come of age, providing opportunities for traditional retailers and eCommerce merchants alike.

Artificial Intelligence (AI)

“AI-Backed Everything” might be an overstatement for small merchants today, but there’s no doubt that AI-backed m-commerce especially helps support high risk merchants in the fight against fraud.

Financial fraud is pervasive, and on the rise. Payment card issuers, payments processors, and merchants large and small go to great effort and expense to detect and prevent upwards of $8.6 billion in fraudulent payment card transactions.

AI-based solutions help m-commerce apps fight the good fight, using machine learning and real-time fraud prevention capabilities to detect potentially fraudulent transactions before they’re completed. Machine learning-based tools can also be applied to “increase revenue, save time, and reduce costs.” That’s a win for eCommerce merchants.

One-Click Payments

Everyone who’s shopped on Amazon even once since 1997 knows about one-click payments. Patent-protected since then, one-click purchase capabilities are now in the mix for all eCommerce vendors. Because Amazon’s patent expired.

App users frequently abandon their shopping carts because it’s Too Much Trouble to enter 30-40 characters to complete an order. But they’ll do it once to set up an account, and continue shopping. Labeled the end of an era by some, it’s good news for m-commerce.

Of all the mobile commerce trends in play today, one-click payments may increase revenues most directly for app developers who choose to implement their own one-click purchase capability. Simplify the user experience, and see your repeat customer revenue skyrocket.

Blended Offline – Online experiences

Consumers want consistent experiences from a retail brand, no matter where they shop. Known as omni-channel marketing, one example of blending offline and online experience is implemented through in-store mobile apps — one of the mobile commerce trends of 2018.

Retailers like Home Depot have led the way blending offline and online shopping experiences. Customers often need help finding the product they want within a huge hardware store. Mobile commerce trends to the rescue, blending offline and online experiences.

Home Depot provides a downloadable mobile shopping app that helps in-store customers find the aisle housing what they seek. Rushed customers unwilling to wait for a “live” customer support person to show them the way find it very helpful.

No longer do shoppers rely only on imagination when shopping in bricks-and-mortar stores. Brands like IKEA utilize augmented reality technology to bring a virtual kitchen to customers through their mobile devices. The IKEA VR Experience is in pilot now.

As offline and online marketing converge, app developers play a significant role implementing retail strategies. Mobile payment solutions complete the apps and allow them to generate revenues.

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 and app developers. PayArc provides merchants with the latest technology and pay options allowing them to focus on growing their businesses.

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. Why not start processing with PayArc today?
Payarc

November 15, 2021

Industry Insights

mobile-commerce
Mobile-First Payments: Understanding the New Way to Pay

February 2018 study from Pew Research found that 77 percent of Americans now own a smartphone. That’s more than double the amount of smartphones than when Pew first began tracking these numbers in 2011 (it was only 35 percent then). And as more smartphones make their way into the pockets of Americans, it’s more likely that they’ll turn to that device to make payments in their everyday life.

It might sound far-fetched now, but consider what happened in China: Mobile payments have swept rapidly through the country, displacing traditional payment methods like cash and credit. It’s possible to leave your house only with a phone, and pay for food, transportation, or other necessities by scanning QR codes and paying with apps like WeChat or Alipay.

Though mobile payments haven’t reached the same saturation in the US, they’re nevertheless on the rise. A 2017 report by the Mobile Ecosystem Forum said that 78 percent of people have made at least one purchase on a mobile device in the last six months.

“Clearly, the migration from desktop to mobile can only accelerate,” says Christian Von Hammel-Bonton, EVP of Global Product Strategy at Wirecard. “So my message to all businesses around the world is: if you neglect to offer services and products through the mobile channel, you will lose – not only your customers but also your business.”

Making Mobile-First Payments a Priority

This means that developing a plan to implement mobile-first payments is increasingly crucial for merchants. In order to capture business from tech-savvy users, business need to make the structure of mobile-first payments a priority.

An easy way to start making mobile payments a priority is simply to make your business’s website adaptive. This means structuring your site so it will automatically adjust to the screen size of the user browsing it. That means that whether customers are logging on from their PC or their phone, they’ll have the same experience on the site. Or, merchants can go a step further and optimize their site for mobile first. Customers will appreciate an a shopping experience that was designed for mobile users and will be more likely to make a purchase.

Having an good grasp of mobile payment is a must for merchants who hope to focus on mobile first payments. One key aspect of this is understanding how exactly your customers want to pay on mobile. While AliPay and WeChat aren’t as popular for payments outside of China, digital wallets are gaining users and popularity. Digital wallets are simply a tokenization of a user’s data stored digitally. This means that while a digital wallet can include payments (more on that in a moment), it can also include other types of data like boarding passes, room keys, or identification.

Mobile wallets (or the “Pays” — Apple Pay, Google Pay, and Samsung Pay) are what merchants who are interested in a mobile-first payments experience should be paying attention to. This is the much touted “tap and go” method of mobile payment. This technique uses a smartphone’s built in NFC (Near Field Communication wireless technology) or BLE (Bluetooth Low Energy) a payment is made to the merchant. These mobile wallets offer both convenience and security. Paying with a mobile wallet is a quick experience in a brick-and-mortar store, and is nearly instantaneous when paying online. When considering the pros of investing in mobile-first payments, merchants shouldn’t overlook the benefits to their own business: nearly instantaneous access to funds, access to real-time data, and a competitive edge that comes from giving the customer a fast and secure payment option.

But despite the fact that these mobile wallets do offer heightened security with encryptions similar to chip cards, good old card not present (CNP) transactions are still what most customers are most familiar with. Though e-wallets are burgeoning in popularity, many users will still first turn to the card in their physical wallet to make payments — even if they are making their payments on mobile. Though digital wallets and mobile payments are evolving quickly — and merchants should be keeping an eye on these trends for when (not if) they need to adopt them — to capture the most sales business should offer customers the option to perform CNP transactions on mobile.

The evolution of mobile commerce is perhaps one of the most crucial payment developments in recent years. Merchants who want to stay ahead of the curve should be looking for ways to start implementing mobile-first payments into their current business model.

Payarc

November 15, 2021

Industry Insights

mobile-apps-payments

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Smartphones & Tablet Users Hail Apps 5 Hours Per Day

Three Mobile Commerce Trends to Embrace

Artificial Intelligence (AI)

One-Click Payments

Blended Offline – Online experiences

Conclusion

Making Mobile-First Payments a Priority