We’ve all been quite stunned at the level of disruption the current pandemic has caused. Most businesses have strong contingency plans, but few could have foreseen the way life and business as we know it would be changed as a result of COVID-19.
So, as the landscape continues to shift and evolve, what merchant payment processing issues should eCommerce vendors be planning for now? And how can they update their contingency plans to prepare for the uncertainties that lie ahead?
Don’t forget to backup
I cannot stress this enough – merchants must have connectivity to more than one acquirer, and preferably a robust one!
In this latest crisis, different payment channels have been affected in varying ways. When people went into lockdown, consumption in the card present (CP) space decreased rapidly, while card-not-present (CNP) usage soared.
For eCommerce merchants connected to an acquirer or processor that dealt mostly in the CP space, this will have likely have had a two-fold effect: not only would that acquirer be focusing on alleviating the CP damages, but they’d also be struggling to service the CNP surge.
That’s why having a backup acquirer is essential to sustain business operations and continue offering a seamless merchant payment processing experience to your customers, whatever situation may arise.
It’s also prudent to consider your acquirer’s contingency plans. Do they have work-from-home capabilities to limit service disruption? Are they agile enough to adapt and sustain the continuity of service your business requires?
To sustain a good relationship and get the most out of your backup acquirer, it’s a good idea to pass traffic through them, even during non-peak times. That’s not to say you need to have an equal split, you just need to avoid the dreaded dormant Merchant IDs (MIDs) that acquirers try to prevent.
But how do you choose which acquirer to pass traffic through? Of course, all transactions should, in theory, be approved through whichever provider you select. However, in practice, approval rates can vary.
This is because when issuers approve transactions, they look at three main factors: the location of the acquirer, the merchant, and the cardholder.
If all parties in this trinity are in the same region, the transaction will likely be deemed safe and therefore will be approved. If not, it’s likely to be suspected as higher risk.
The best way to go about distributing traffic between acquirers is to have a good team of analysts, either internal or provided by the payment gateway, who can determine which route is most appropriate for each geography.
As well as being an acquirer, Credorax offers a smart routing gateway with strong relationships to over 100 other banks/acquirers, in a range of geographies, to help connect companies in this way.
Merchants simply need to express which country they would like to target, and Credorax can help establish the relevant relationships to facilitate seamless business there.
Factoring in regulations
While other issues may be hogging the limelight right now, merchants should not forget about upcoming regulations – and the fines that come with them if they aren’t compliant in time.
The most pressing is Strong Customer Authentication (SCA). This regulation, in a nutshell, is set to reduce fraud by adding a couple of extra authentication steps into the checkout. It’s a way of confirming that customers really are who they say they are.
To avoid fines and protect against future fraud, all merchants must be SCA-compliant by 14th September 2021 – and ideally by December 2020, according to FCA officials.
SCA compliance will require merchants to implement the 3D Secure 2.0 authentication protocol into their checkouts.
However, the easiest way to do this is to work with an acquirer who is already compliant and has 3D Secure 2.0 capabilities.
For a comprehensive explanation of SCA, take a look at our complete guide, here.
What’s important to your customer?
When it comes to merchant payment processing, eCommerce vendors also need to consider the visibility of Alternative Payment Methods (APMs) and how reliance on them is growing as card use declines. Many consumers have a preferred payment process which they expect businesses to provide, and this varies globally.
Take Russia, for instance. Online shoppers here prefer to pay via online banking, however, e-wallets have also been gaining interest in recent years. Meanwhile, in Asia, mobile and messaging payment methods such as AliPay and WeChat pay are in widespread use.
So, if your company is open to international markets, you may want to consider your target country’s preferred way to pay to avoid losing sales.
In addition to this, merchants can further boost convenience for their customers through tokenization.
Tokenization is the data-secure way for online businesses to store customer payment details, meaning they can benefit from one-click capabilities, or simply avoid the hassle of digging their card out.
The bottom line
No business can always know what’s around the corner, but they can make a good contingency plan. And it won’t just kick in when disaster strikes.
All the points I’ve touched on – from backup acquirers to security measures, APM options and tokenization – provide many benefits for both business operations and customer satisfaction, whatever the landscape.
To learn more about how Credorax’s merchant payment processing services can help elevate your business during COVID-19 and beyond, get in touch at: firstname.lastname@example.org.