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The
"Other" Option – No Merchant Account Required
If you read
last week's
instalment, you might think that
there are only two options to process online
payments. But there is a third option... well,
sort of. If you have little cash on hand, or
sell a limited number of products, you can try
one of the alternate processing companies
(called third party processors). Instead of
paying setup fees, transaction fees, statement
fees, discount fees and the like, you’ll simply
pay 10-20% of the sale price of each product. We
don’t recommend using these companies in the
long-term. They're excellent if you are just
starting out and you don’t need the cash from
sales right away (CCNow, for example, withholds
part of the proceeds from a sale for up to three
months to protect against chargebacks) but in
the long run they will end up costing you a lot
more.
Once you’ve generated enough capital to support
a real merchant account for your company, get
one. If you’re a non-US based business, the best
way to go is to use a 3rd party processor, at
least until the cost for a real merchant account
drops. Many of the companies below support both
US and Non-US based businesses:
Chargebacks and Fraud
Chargeback
- the word that Internet merchants fear. A
chargeback is when a transaction is reversed. In
other words, rather than adding money to your
account, it is deducted. Chargebacks can occur
for a wide variety of reasons, such as
double-charging, credit card expiration, bank
errors, and customer disputes. If your Merchant
Account incurs too many chargebacks, there's a
possibility that you will loose your account.
Once this happens you'll be placed on the
Visa/MasterCard MATCH list for several years.
All Merchant Account Providers have access to
this list, and if they find your name on the
list, they'll usually decline to issue a
Merchant Account to you. But if you're one of
those merchants who have lost their Account,
there's still hope.
Bank Card Law
specializes in helping companies who’ve lost
their Merchant Account due to excessive
chargebacks.
Here are some tips that can help eliminate
chargebacks:
1. On
your order confirmation page, make a note to the
customer as to the name (phone number, email
address, etc.) that will appear on their monthly
credit card statement.
2.
Also include a note about these details in the
email confirmation that your customers receive
when an order is placed (they do get one don't
they? If not, they should... it's good for
keeping records).
3.
Use Address Verification. People who order
products with a stolen card number will never
use the real cardholder’'s billing address, so
this is your chance to stop the order before its
too late!
4.
Scrutinize orders from foreign countries. A
large percentage of fraudulent Internet
purchases are made from Indonesia, Russia, and
other eastern block and developing countries.
5. If
an order seems suspicious, call or email the
customer and attempt to verify anything you can
about them. Pay attention to strange orders and
then follow up.
6.
And lastly, if you ship a product, attach a note
to the customers invoice.
And always keep copies of transactions, so that,
if you're ever challenged, you have some kind of
defense.
Unfortunately, online credit card fraud is very
prevalent on the Internet. The best thing that
you as a merchant can do to reduce the cost of
fraud is to be informed. I highly recommend that
you dedicate several hours to the exploration of
the Websites below, and to the implementation of
as many of the suggested strategies as possible
within your ebusiness:
In almost all cases, you'll be held responsible
when a fraudulent credit card is used on your
site, and you will be charged for the sale.
Alas, authorities are unlikely to get involved
in a fraud case unless very significant amounts
are involved, although you should not hesitate
to report each and every case of fraud that
occurs. |
ISOC
IWA
ARTT
RTS
