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  • Mastercard Negative Option Billing Rules

    Negative Option Billing is a business practice that has built a reputation as being somewhat shady or deceitful. The premise of this practice relies on the customer signing up for a service that it is a free trial or reduced price, and then once that trial is over the customer gets billed for future products at full price. For example, a customer will sign up to receive free cosmetics for one month but will have to give their credit card information to the company. The customer receives the free cosmetics in that first month, but then will be billed for more cosmetics in subsequent months. In order to avoid being billed, the customer must contact the company and unsubscribe from the service. Because this business practice relies on customers staying subscribed long enough to be charged, companies offering this service make it hard to unsubscribe.

    On April 12, 2019, MasterCard established new rules regarding negative option billing. These new rules apply only to card-not-present subscription services in which the customer receives a physical product. These rules do not cover digital services,such as streaming TV or music services. If your business relies on negative option billing practices, it is important to understand MasterCard’s rules in order to avoid charge backs and possible action against you. So, what do these new rules entail?

    ·       Notification:A merchant offering a free trial must notify the customer once that trial has ended, before charging the customer. The customer must also be notified of the transaction amount, the date of transaction, the merchant name, and how to terminate the service at any time.

    ·       New MCC: Any merchant offering a free trial of a physical product will be assigned an MCC of 5986 – Direct Marketing: Continuity/Subscription Merchants.

    ·       High Risk Classification:Merchants who make use of negative option billing are classified as “high risk,” which may affect a merchant’s credit card processing fees.

    ·       Permission: The merchant must obtain explicit permission from the customer before charging their card.

    ·       Trial Period: Instead of the trial period beginning once the customer completes the transaction, the trial period must begin on the day that the customer receives the product.

    ·       Verification: Acquiring banks must monitor and verify multiple purchases from the same account holder.Merchants must be able to provide proof of sale for a year.

    ·       Customer Service:A customer service phone number must be available on the website when that site is down for maintenance.

    ·       Cancellation: A merchant must provide the customer with clear, direct instructions on how to cancel their subscription on their website and on customer receipts. If a customer cancels the subscription, the merchant must provide written confirmation of that cancellation.

    ·       MasterCard Registration Program:Acquiring banks must register merchants using negative option billing and any third-party service providers in the MRP.

    Need help keeping track of these rules and staying compliant? PayArc can help! Call or email us today to help get started with a merchant account.

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    Payarc

    November 15, 2021
    Industry Insights
    chargebacks; payment-processing; mastercard
  • Merchant Account Providers Vs Processing Aggregators

    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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    Trackbacks/Pingbacks
    1. Top 6 Considerations Your Mobile App Payment Gateway | PayArc – […] is often the least appreciated aspect of the payment aggregator business model, along with funding timeframes and account stability.…
    2. How to Use Expert Payment Solutions to Grow Your Meal Prep Business | PayArc – […] enough about payments, to get past start-up and survival, then on to success? Like why a landing a merchant…
    3. Card Brand Fees 101: Understanding Network Access and Brand Usage (NABU) Fees | PayArc – […] the money charged for card brand fees goes to the card (VISA, for example), the credit card processor doesn’t…

    Payarc

    November 15, 2021
    Industry Insights
    payment-aggregators
  • Ecommerce Nightmare: Going Global or Going Broke?

    Ecommerce Nightmare: Going Global or Going Broke?

    International expansion is the dream of many an ecommerce merchant, but that dream can quickly turn into an ecommerce nightmare if you’re not careful. Oversights can quickly turn to obstacles when it comes to overseas expansion. Maybe your customers are complaining they aren’t receiving their product, or you’re receiving bewildering notices about unpaid taxes, or even just a high rate of abandoned conversions. A fairytale of international expansion can rapidly turn into a horror show if merchants aren’t carefully prepared to scale overseas. While launching international sites is an admirable goal, it can cost you big if you aren’t prepared.

    Of course, that doesn’t mean you shouldn’t do it. It’s simply important to be prepared for what’s in store. To that end, here’s a merchant’s guide on what not to do when expanding internationally. To avoid an ecommerce nightmare, read on!

    Don’t Neglect to Research Local Payment Preferences

    This might seem like a no-brainer. Of course you’ll accept international credit cards, right? But a would-be international merchant should be attuned to unique regional preferences. Different countries have different payment preferences. Some regions prefer e-wallets, debit cards, mobile payments or even cash on delivery over credit cards. If your payment processor doesn’t offer customers their preferred payment method, you’ll be looking at a lot of abandoned e-shopping carts. And it’s worth understanding cross-border fees so you don’t have any nasty fiscal surprises.

    Don’t Forget Local Taxes

    This is one of those things that might slip through the cracks when a merchant is focused on international expansion, but it’s one of the quickest ways to create an ecommerce nightmare out of your global expansion. For example, Brazil has a staggering seven different (and cumulative) income taxes. Preventing this kind of ecommerce nightmare is as simple as consulting with local experts. Someone who can guide you through the taxes and tariffs involved in the country in question will help facilitate a smooth launch. (A good accountant or lawyer won’t hurt here either.)

    Don’t Skimp on Security

    International customers will already be wary of buying from a foreign merchant online. Not taking precautions against data breaches is a surefire way to drive away would-be customers — and that’s only half the battle. You have to make it clear to international customers that their data is safe. There are a few ways of doing this. One is as simple as clearly describing the data security measures in place so customers will understand how you are keeping their payment data safe. Another way to foster feelings of security in international customers is to ensure your payment page is fully integrated on your site. A seamless transaction reassures customers and will help build loyalty — a must for successful international expansion.  A good payment provider will be able to help integrate a secure payment gateway on your site.

    Do Your Due Diligence

    Global expansion is a great dream, but it’s one that take a lot of work to achieve successfully. A good chunk of that work should be research into your proposed market. There are plenty of local quirks that can quickly become huge stumbling blocks. Chinese websites are subject to dizzying amounts of red tape, while Latin American countries might eat up a shocking of the cost of sold merchandise with transportation costs. An ounce of prevention is worth a pound of cure, and online businesses already shouldn’t take many chances. There’s no shortcut: if you want to prevent an ecommerce nightmare, do your research.

    Conclusion

    There’s no question that there are plenty of things that can go wrong when merchants decide to turn to international markets. However, having an ecommerce business means that this kind of expansion isn’t impossible. In fact, with diligent research, following proper procedures, and a merchant account provider that understands the challenges of international expansion, going global is more possible than ever before. Expanding abroad doesn’t have to be an ecommerce nightmare. With the right preparation – and a great payment processing partner – your dream of going global can come true

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    Payarc

    November 15, 2021
    Industry Insights
    payment-processing
  • How to Accept Donations Online for Your Nonprofit or Foundation

    How to Accept Donations Online for Your Nonprofit or Foundation

    “Philanthropist” derives from Late Latin and from Greek. A direct translation from philanthrōpos or “loving people,” Merriam-Webster defines it as “goodwill to fellow members of the human race; especially: active effort to promote human welfare.”

    Nonprofit organizations are born from that love of other living beings, and the desire to improve their welfare. If your passion for a cause led you to start a nonprofit, maximizing results of online giving ranks as a top priority.

    People are accustomed to making payments online for everything today, and they want charitable donations to be quick and easy too. Fortunately, today’s technologies facilitate digital donations via mobile payments and online giving websites., making it fast and easy to accept donations online.

    But there’s a price to be paid by charities for this convenience due to transaction processing fees. These charges reduce the amount actually collected by a charity — a trade-off that most people don’t realize.

    Let’s take a look at a few helpful tips for accepting donations online while optimizing results for your nonprofit.

    Payments Industry Basics for Nonprofits

    Processing payments carries a cost for all industry sectors — charities included. The first thing nonprofits should understand is that choices exist to help them accept payments online and to maximize results.

    The payments ecosystem may seem complex to those not familiar with the industry. What with terminology like merchant accounts, issuing banks and acquiring banks, payment processors, payment aggregators, and other merchant service providers, how could it seem otherwise?

    Don’t let either the cost or complexity of payment card acceptance stand as a barrier to your nonprofit success. Resources and budgets are tight enough.

    Instead, choose a payment processing partner that specializes in working with nonprofits.  They’ll help you set up and optimize online transaction processing, and may offer payment processing at cost to qualified charities. Let the experts handle the intricacies of online payment processing for you.

    Follow these keys to success:

    • Choose a processor that provides the secure payment gateway needed to transfer payment information between your fundraising platform — the issuing and acquiring banks — and the processing networks.
    • Ensure your processor’s gateway is PCI-DSS compliant (Payment Card Industry – Data Security Standard) — a requirement for processing online payment transactions. Maintaining PCI compliance can be burdensome to nonprofit staff, so choose to work only with a processor who handles all PCI requirements.
    • Recognize that donors care about the security of their payment card data. Make website visitors comfortable by displaying information about security standards employed, so they feel comfortable sharing payment details — and become your donors.
    • Accept multiple payment types. Increase your potential market to maximize your fundraising efforts. The right payment processor will help set up the ability to accept donations online via major card brands (domestic and international), multi-currency options, and alternative payment types like PayPal and others. Make it easy for potential donors to help your organization, no matter where they live.
    • Easy integration with your fundraising platform or website describes the right processing solution for your nonprofit. Choose a processor that enables custom donation forms, or allows you to set up an online donation portal fitting the “look and feel” of your website. So that when you accept donations online, the processing solution facilitates an excellent customer experience and provides secure payment processing.

    We hope those tips help you find a payment processing partner that you can trust, and that offers favorable rates — because that’s often the bottom line.

    Charities That Accept Donations Online Make Giving Easier

    Do your homework, and aspire to work with a processor that offers services at a reduced rate, while helping your nonprofit streamline processes and reduce expenses. There are processors out there who want to help nonprofits thrive in the competitive online world.

    Yes, it does cost money to accept online donations. Flexible processing needs (like processing recurring donations and selling merchandise) can cost charities even more. But the good news is that some processors provide charitable payment processing at cost, for qualified 501(c) nonprofits.

    As Melissa Johnson (writing for Merchant Maverick) points out, it is possible to qualify for charitable payment processing rates to accept donations online — simply by asking and proving non-profit 501(c) status. “Which has a positive effect on any organization’s bottom line.”

    Let PayArc Reduce the Cost Footprint of Your Nonprofit

    American banks and credit card companies make huge profits — in the neighborhood of $250 million a year — from processing online charitable donations. They can afford to reduce the cost burden for nonprofits.

    PayArc’s program strives to do exactly that: reduce the burden on charitable organizations that accept donations online. We give them access to the lowest rates possible, and offer special processing programs that:

    • Maximize non-profit donations with electronic payments made via credit cards, debit cards, and ACH/eChecks through nonprofit-hosted payment forms.
    • Retain existing donors and reduce marketing costs with automated recurring donation options.
    • Increase payment security through PCI-compliant payment processing solutions.

    PayArc provides charitable payment processing at cost, for qualified 501(c) nonprofits. Explore working with us, and we’ll use our payments industry expertise to offer amazing pricing to your qualified charity.

    Because we’d love to help.

    Payarc

    November 15, 2021
    Industry Insights
    payment-processing
  • How to Optimize Your Natural Products Store Online

    How to Optimize Your Natural Products Store Online

    Running a natural products store online can be highly profitable due to the growing consumer interest in organic food and beverage items, as well as supplements. The U.S. Natural and Organic Product Industry sales surged 6.5% to $207 billion in 2017, while the natural supplement market grew 6.1% to $44 billion in the U.S. over the same span, according to New Hope Network’s Nutrition Business Journal.

    The number of individuals and investors opening up natural products stores is on the rise due to the high revenue opportunities that the natural and organic product space offers. Working with a reputable credit card processor can help these merchants optimize payments—and growth.

    How to Get a Natural Products Store Merchant Account

    Merchants in this space are well-advised to open a merchant account through a specialized payment processor that understands the industry. This requires completing a few simple steps and providing the necessary information.

    Most applications for a natural products store merchant account will request that your business share a valid, government-issued ID, a bank letter or pre-printed voided check, three months of the most recent bank statements, three months of the most recent processing statements and a Social Security Number (SSN) or Employer Identification Number (EIN).

    Working with a payments services provider that specializes in this niche can speed up the application process. In some cases, merchants can get approved within a matter of days. Specialized payment processors often offer one-stop solutions to help augment your payments operations, including fraud prevention, risk mitigation, and PCI compliance. This is to the merchant’s benefit as they have one resource to help manage and lower chargebacks, protect customers’ sensitive data and receive advice on streamlining payments.

    Managing Chargebacks Natural Products Stores

    Like most online businesses, natural products stores are not immune to the chargeback problem. In some cases, customers have buyer’s remorse, blaming the merchant for how supplements or other natural products that seemingly didn’t work. These disputes snowball into chargebacks, costing the merchant dearly in fines, fees, and penalties.

    Many online shops offer free trials to customers as a way to let people try their natural products, risk-free. This is a handy marketing tool; however, it can also cause an increase in chargebacks. Without excellent communication about the terms of a free trial, customers can become confused about payment conditions—or simply forget about their purchase—and dispute the charges later on. It is imperative for natural product store merchants running free trials to provide email confirmations, email reminders, and other information on the website so that customers have the right information.

    Optimize Your Site — and Your Brand Story

    In an industry as competitive as the natural products business, you’ll need to develop a brand, website and line of products that are unique. Don’t try to carry every natural supplement or vitamin available simply to follow industry fads; quality always trumps quantity.

    Be straightforward in your advertising. Maintain high standards and carry products that you know will help customers. Use a marketing approach with long-term goals in mind. Build your business as a farmer rather than a hunter, with a focus on harvesting a long-term relationships with customers rather than shooting for quick sales with customers who won’t return.

    Avoid misinformation and clearly articulate the benefits of the products you offer. Where possible, reference industry experts that can back claims and provide additional guidance. Educating your customer base can add to your appeal and it also helps customers feel secure in what they are purchasing from your brand.

    Another way to bolster trust is to ensure that your brand experience remains consistent from the home page through product pages and all the way to the end of the payments process. Checkout pages or portals that veer from the regular branding can cause confusion and distrust among consumers.

    Follow up online sales with a branded confirmation email that includes a receipt for each customer’s purchase. This goes a long way in improving the customer experience, and also provides a way for customers to get in touch if they have a question or an issues. The more you communicate with your customers, the less likely it is that disputes will arise and snowball into costly chargebacks.

    Conclusion

    PayArc offers comprehensive payment processing services, which include a PCI compliant payment gateway, mobile payment processing solutions easy integration of your online systems with our full API and SDK.

    Payarc

    November 15, 2021
    Industry Insights
    payment-processing
  • 2019 Ecommerce Strategy

    2019 Ecommerce Strategy

    Jared Ronski was recently in the news discussing how optimizing mobile and omnichannel is table stakes for merchants looking to keep customers happy and retain them over the long haul. He speaks to the benefits of streamlining checkout, using a mobile-first strategy, and expanding payment options to keep customers happy in the new year.

    Another consideration is understanding whether or not using a payment aggregator makes sense for business. Many merchants opt to take a shortcut by using payment aggregators to accept payments for their online business. We’ve outlined some reasons why you may want to reconsider in 2019 in the infographic below:

    Payment aggregators cheat sheet

    Read the full article here.

    Payarc

    November 15, 2021
    Industry Insights
    mobile-apps-payments; mobile-commerce
  • 4 Ways to Make Your Ecommerce Shop Holiday-Ready

    4 Ways to Make Your Ecommerce Shop Holiday-Ready

    The back-to-school season is upon is, which means that the bustling holiday shopping season is right around the corner. For many e-commerce shops, this is the bread-and-butter season. With U.S. consumer confidence at 15-year highs and e-commerce projected to take an even bigger slice of the overall retail pie, online stores must go into the holiday season prepared.

    Optimize for Conversions

    Many small- and medium-sized online retailers utilize one of the popular ecommerce platforms out there like Magento, Shopify, or WooCommerce. Let’s look at how each one can be optimized for maximum conversions during the holiday shopping season.

    Magento

    Speed and ease-of-use are key. In default form, Magento checkout consists of 6 steps, which can cause lower conversion rates. Removing some of those steps can speed up the process and improve conversions. Consider installing a one-step checkout extensions (see: OneStepCheckout, Checkout Pro or MageWorld’s One Step Checkout).

    Shopify

    In the same vein, Shopify Plus merchants can make things easier for online shoppers by including a checkout progress bar. About one quarter of shoppers will abandon the checkout process due to time constraints, so if you let people know how far along they’ve come (and how much more they have to complete), they may be more inclined to complete the purchase.

    WooCommerce

    Not everyone is going to complete a purchase, but that doesn’t mean they’ll never complete a purchase. With the Recover Abandoned Cart plugin, WooCommerce merchants can recapture shoppers by sending them a sequence of follow-up emails that include difference offers to entice them into completing the purchase.

    Broaden Payment Brand Acceptance

    The beauty of e-commerce is that your consumer base isn’t limited to one location. With the potential to make global sales, you should ensure you that your payment gateway can accept as many different payment types as possible (and rational). In addition to the major credit card brands (Visa, MasterCard, Discover, American Express), consider enabling payments from PayPal.

    Merchants that have a significant consumer base abroad should also consider popular payments types for the regions they are targeting. Some countries have popular payment methods that are not used in the U.S., so you should be sure to talk to your payment processing partner about how to add those options to your gateway.

    The other consideration here is currency. Global ecommerce merchants will want to be sure their gateway supports processing charges across currencies. Presenting prices in a customer’s native currency can improve conversions and boost sales.

    Guard Against Chargebacks & Fraud

    Along with the increased traffic and sales volume of the holidays comes increased fraud. The sheer increase in both can be overwhelming for some merchants. In some cases, it may make sense to outsource chargeback prevention and management during the holidays. Companies like Chargebacks911, Ethoca, or Verifi offer solutions and services that can remove some of the burden from busy online retailers who want to focus on making sales.

    In any case, ecommerce merchants can implement some best practices to reduce chargebacks:

    • Establish realistic and enforceable return policies with specific time frames, conditions for returning merchandise, and exceptions.
    • Be sure your return policy is clearly presented – both in language and presence. Use clear, concise, and direct language and be sure it’s easy to find on your website.
    • Properly staff customer service call centers and set your reps up for success. Having a straightforward script that can address all customer issues, complaints, and questions will ensure favorable resolution in most cases.
    • Include accurate product descriptions and photos for all in-stock inventory. Including customer reviews alongside products can also be helpful in building trust with shoppers about the quality of your product.

    Up Your Security Game

    Consumers shop with sites they know are secure. Be sure your site has a high-assurance SSL/TLS certificate, which signals to consumers that you are a safe site to shop with. Getting an EV SSL can be even better as it includes additional trust indicators: green padlock and green address bar with your company’s name. Customers recognize those indicators and are more comfortable shopping with merchants that have them.

    Be sure your payments gateway complies with Payment Card Industry Data Security Standard (PCI-DSS).  Additionally, use additional security features for authorization:

    Address Verification System (AVS) – this system verifies the address of the person using a payment card to make a transaction by checking the billing address the user inputs against the one on file with the credit card company.

    Card Verification Value (CVV) – this anti-fraud feature helps verify that the purchaser is in possession of the payment card with which he is attempting to make a purchase by asking him to enter the number at the time of purchase. The CVV is a three-digit number printed on the back signature panel of a card.

    IP Address verification  – This protocol compares the IP geolocation from the device used to make the transaction with the actual billing address the user enters online.
    The holidays are an exciting time for buyers and sellers alike. Making the entire buying process — from browsing to paying — as seamless as possible can increase sales and help ecommerce merchants avoid unnecessary holiday headaches.

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    Trackbacks/Pingbacks
    1. Biz Tips: 3 Things Ecommerce Merchants Need to Know Before The Holidays Hit | BizAtomic – […] because a payment option is not available. This cause for abandonment can be avoided if you accept multiple payment…

    Payarc

    November 15, 2021
    Industry Insights, Technology
    payment-processing
  • 7 Payment Processing Trends to Watch for 2019

    7 Payment Processing Trends to Watch for 2019

    Consumers are becoming more familiar with alternative payment methods and more confident in their security. As these payment options continue to gain in popularity, businesses need to adapt to consumer preferences — and having a clear understanding of the latest payment processing trends can help them make the right decisions for their future.

    For business owners looking to stay relevant with a diverse group of consumers, more flexible payment solutions are necessary. But first, it’s important to have a firm grasp on what’s happening in this growing market. Below are seven payment processing trends to watch for in 2019:

    In-store mobile payments to overtake credit cards

    Chief among the leading payment processing trends for next year is the steady emergence of in-store mobile payments as the primary payment method in the U.S. By 2020, in-store mobile payments are expected to overtake credit cards, at $503 billion. The added speed and convenience of in-store mobile payments is particularly attractive to a younger generation of consumers. Demographic info of note: At 73 million, millennials are expected to overtake Boomers in population in 2019. Meanwhile, generation X is projected to pass the Boomers in population by 2028.

    Increased prominence of mobile wallets

    The convenience of mobile wallets is appealing for the consumer: Mobile wallet transactions tend to be quicker than paying by cash or credit card. When the consumer is ready to make their purchase, all they need to do is open the app, touch their phone to the compatible reader located next to the register, and the transaction is complete. Added security is also a plus. Unlike cash and credit cards, the card information a customer puts into a mobile wallet is encrypted, requiring them to unlock their device and use a passcode or fingerprint.

    Apple Pay, Google Wallet, Android Pay, and Samsung Pay are the top mobile wallets currently used at small and medium businesses.. Apple Pay and Google Wallet are expected to continue battling it out for the top spot into 2019 and beyond, but Android Pay and Samsung Pay still have their share of supporters.

    Payment methods of online shoppers

    The most popular payment methods for online shoppers include credit cards, electronic payment, and debit cards, respectively. While it’s unnecessary to offer every single payment method, merchants will want to have an understanding of which methods their consumers prefer and select a merchant service provider who can support their specific needs. The exact combination will depend on your customer base. Not only learning the latest payment processing trends, but understanding how they apply to your unique situation, is essential to giving yourself a powerful advantage in today’s market.

    mPOS devices rise in popularity

    According to TYSY, roughly 27.7 million mPOS devices will be in circulation in the U.S. within the next three years, almost 10 times the amount in 2014. An mPOS device can be cost-effective for small and medium business owners, who have limited staff and resources for electronic registers and software support. The average credit card processing cost for a retail business is around 2 percent for cards that are physically swiped in-person, compared with 2.3 percent to 3.1 percent for card-not-present transactions.

    Blockchain technology offers benefits

    Beyond giving consumers more payment options, blockchain technology gives small businesses the opportunity to reduce costs by allowing them to work directly with other businesses. Over the next five years, blockchain technology is expected to reduce the cost of accounting reconciliation by 70 percent and compliance costs by up to 50 percent. Along with reduced financial burden, the blockchain boasts improved transparency and security for both businesses and consumers. Information housed in the blockchain is entirely decentralized, rather than stored in one location.

    Biometric authentication enhances consumer security

    Biometric authentication — examples include fingerprint ID and financial recognition — will be used in more than 18 billion transactions by 2021. Apple Pay and Samsung Pay both use fingerprint identification, but not all platforms offer these levels of security. But the technology as a whole is more reliable and cost-effective, reducing password administrations costs and decreasing the likelihood of loss prevention. With the steady increase in fraudulent transactions and security breaches, adoption of this technology is essential to making customers feel more at ease with making their purchase.

    The improved customer experience

    Perhaps the most important of all payment processing trends is the renewed emphasis on the customer experience. Today’s alternative payment options are not replacements, but rather improvements on previous methods. Younger generations agree: More than 60 percent of millennial and Generation Z customers willing to share their bank account credentials with third-party vendors. That total will only increase as customers become more familiar with alternative payment options.

    As a business owner, keeping an eye on the future and staying informed about the latest payment processing trends is an invaluable part of increasing sales and improving customer satisfaction. In this ever-changing environment, there’s much to look forward to as we approach 2019.

    Payarc

    November 15, 2021
    Industry Insights
    payment-processing
  • 7 Ways to Streamline the Payment Process for Online Customers

    7 Ways to Streamline the Payment Process for Online Customers

    It’s gearing up to be a busy holiday shopping season and many retailers are trying to make the most out of increased traffic to their ecommerce stores. One of the best ways to increase conversions and sales is to make the payment process as simple and seamless as possible.

    From the shopping cart to the checkout page to payment confirmation, making a few small tweaks can mean the difference between tens of thousands of dollars. As the popularity of online shopping surpasses that of brick-and-mortar shopping, online retailers need to optimize their checkout process to make things smooth for paying customers.

    While many merchants opt for the easy route of PayPal for payment processing, merchants with more complex payment systems can take advantage of the full control they have over the entire checkout process.

    The next 7 steps can help you optimize the process for increased conversions and sales.

    Diversify payment methods

    Users expect to have a choice when it comes to how they pay on your ecommerce site. Best practices is to include all major payment card brands (Visa, MasterCard, Discover, etc.) as well as PayPal. That said, if you truly cater to an international audience and analytics show that you get a decent amount of business from specific geographies, you may want to consider the payment preferences of those countries as well.

    No registration? No problem.

    Never make people register in order to complete the checkout process. This can be one of the top conversion killers for an ecommerce site because it’s intrusive and unnecessary. It’s another step to what many users already view as a long process to get what they want. “Checkout as guest” is the best route to take, enabling users to get through the checkout process without handing over any more information than they’re already providing.

    While you don’t have to require registration, you can always offer it as an option. Just be sure that it does not impede the checkout flow or become too aggressive.

    Consistency matters

    The design and experience of your brand should be consistent across all channels and along every page of your website – including checkout pages. While some online payment providers and gateways may offer out-of-the-box functionality, you’re relinquishing control of the experience, look, and feel of your brand. Take caution here.

    Be sure to use consistent fonts, colors, logos, and other design elements from start to finish of the user experience. Not only does it look more professional, but it builds trust between you and your customers. Given the rash of fraud, phishing, and other online scams, keeping a consistent design element during checkout can help put customers at ease and reinforce that you are a legitimate seller.

    User flow matters, too

    In the same vein as point #3 above, keeping users on your site is imperative. Redirecting to an outside gateway (like PayPal) erodes trust and also leads people away from your brand. Keeping users on your site from start to finish also makes it more likely that they’ll continue to browse around after their purchase.

    Also avoid pop-ups or any other advertisements that may distract users as they are attempting to checkout. Anything that takes someone away from the checkout process is bad form. Keep customers moving seamlessly through your site without distractions.

    Make payment forms intuitive

    Most online shoppers are already leery when offering up payment card information online. Making payment forms intuitive can relieve some of their anxiety while helping them to complete the process quickly and easily. Displaying a progress bar at the top of each checkout page is a great way to keep users on task and in-the-know about how many steps they have left to complete.

    Intelligent forms are also helpful. Some may be able to use geolocation technology to pre-fill fields like the country or state to which users are purchasing from. It may also be able to pre-fill some data from return customers, making a repeat purchase seamless.

    One final consideration is how to address errors as users are checking out. Be sure to present clear and relevant error messages if a form or field is filled out incorrectly or incompletely. Avoid displaying error messages at the top of the page, which forces users to scroll all the way up to see what they missed. Error messages should be displayed near the field where they occurred and should be clearly worded so the user understands what they need to do.

    Use clear calls to action

    Nothing is worse than a confused user who just wants to make a purchase from your ecommerce site. Offer clear calls to action and directions on each step of the checkout and payment processes. Be sure to use bold buttons and clear, concise wording directing the user what to do next.

    It can also be helpful to offer information buttons that allow users to click and receive more information about what is being asked. These additional instructions can mean the difference between a low conversion rate and a high conversion rate.

    Email a receipt

    This is perhaps one of the most overlooked steps in providing a cohesive, reliable, and easy checkout and payment experience for customers. It’s also a lost opportunity to upsell and cross-sell or to simply add to user’s pleasant shopping experience.

    Not only does it provide a record of the purchase for both you and the customer, but it can be a great way to market to customers that are at their highest level of trust with your brand (they just completed a purchase!).

    Use the opportunity to ask customers to rate their experience, provide a review, share with friends, or to offer a coupon for the next time they visit your ecommerce store.

    Conclusion

    Employing the tips above can boost your conversion rates, lower cart abandonment, and increase the trust and credibility of your brand. A/B testing is a great way to test out some of  these methods and to see what works for your particular customer base. Checkout and payment is an important – and often overlooked – piece of the overall user experience. Keeping on par with best practices is a great way to keep customers happy from start to finish.

    Payarc

    November 15, 2021
    Industry Insights
    payment-processing
  • Are Online Payments Dead?

    Are Online Payments Dead?

    When was the last time you went to the grocery store and pulled out a checkbook in the checkout line? Or how about this — when was the last time you wanted to pay for an item and were told a merchant didn’t accept a credit card and required cash? The odds are that the last time you used a check at the store was a while ago (some merchants actually won’t accept them anymore!) and stores that don’t accept cards are now the exception that proves the rule. And the rule is that the old way of paying for products and services in the 21st century  is changing — fast.

    This process has only been accelerated by the introduction of ecommerce. Almost overnight, a whole new crop of businesses sprouted up on the internet, and payment processing infrastructure to support it came up along with it too. Payment processing has seen great innovation in that time: from specialized security, to fraud prevention, to increasing amounts of tools for merchants to personalized their online checkout processes. Consumers have responded well to this new form of commerce. Nowadays, many people don’t even think twice about whipping out a credit card to pay for a product or service online, and online retailers are reaping the rewards. Ecommerce continues to gain momentum, as US e-commerce sales grew 14% in Q1 2018.

    The engine of technological development chugs on, and with it comes important questions. Because of this potent combination of quick growth and rapid innovation in ecommerce and payment processing, it’s not off base to wonder what’s next for online payments. Are they going to go the way of checks or cash (in some places)? In other words, are online payments dead?

    It’s true that things are much more different in the payments scene than they were even four years ago. Look at China, for example. Mobile ecommerce payments have taken the country by storm, all but replacing cash and credit cards. Instead of having certain businesses not accepting card transactions under a certain minimum or requiring cash outright, mobile payments in China are quickly becoming the status quo. Citizens scan QR codes and pay with apps like WeChat or Alipay to pay for food, transportation and other everyday necessities. This preference for mobile payments is creating a ripple effect in neighboring countries like Japan, as vacationing Chinese citizens increasingly prefer to pay with their phones. “Mobile pay is growing so rapidly in mainland China that as a foreigner I sometimes found it difficult to complete basic transactions without it,” writes journalist Evelyn Cheng, going on to outline her difficulties purchasing items at a McDonald’s and paying for a cab with cash. But Cheng also notes some concerns with this widespread system of mobile payments, namely privacy.

    So could that massive shift toward mobile payments happen elsewhere? And what does this mean for ecommerce? Well, though mobile wallets are starting to become more of a mainstream fixture in the US, the adoption of this technology is still nowhere near China’s. And that’s the key takeaway for ecommerce payments: without wide adoption from consumers, the effects of mobile payments won’t be felt by ecommerce. Though common mobile wallets like Apple Pay and Google Pay can be used to conduct Card Not Present (CNP) transactions that offer heightened security and fewer chargebacks risks, consumers haven’t embraced these payments wholeheartedly. “Mobile payments are a long way from mainstream adoption because current offerings lack a clear promise of superior benefits to consumers or a business model that addresses the needs of all the players in the payments ecosystem,” says Forrester Research analyst Emmett Higdon. That’s not to say it never will, but for now, the “card” in CNP transactions isn’t going anywhere.

    Of course, mobile wallets or payment-enabled apps like WeChat aren’t the only alternative payments to credit cards out there. There are others, like bank transfers, that are likely to increase in popularity in the coming years. Of course, ecommerce merchants would do well to pay attention to the rise of these other payment types. One method to keep an eye on is voice payments. An offshoot of conversational commerce (the name given to the trend of interacting with businesses through messaging and chat apps), voice payments means that consumers can pay for items with their voice. Devices like Amazon’s Alexa or Google Home can now double as personal shoppers, with consumers simply placing an order by speaking. But as with all new payment types, voice payments will live and die based on consumer adoption. Only time will tell if these methods will successfully be accepted by the mainstream public.

    Although there’s no shortage of alternative payments out there, online payments are a widely-accepted fact of life for a typical ecommerce consumer. And this acceptance is critical for its longevity. While there are other payment options on the horizon, there aren’t any that are prominent enough to disrupt the current online payments landscape. In short, traditional online payments won’t be going anywhere anytime soon.

    With this in mind, merchants who conduct business online need to ensure they have streamlined, secure end-to-end payments infrastructure in place. The continued push toward online and CNP payments means merchants must partner with trusted merchant service providers to keep their customers happy.

    Payarc

    November 15, 2021
    Industry Insights, Uncategorized
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