When you’re processing credit card transactions at your small to mid-sized business, minor mistakes could hurt your bottom line. Unfortunately, too many business owners don’t get the information they need from their payment processing provider to avoid these errors.
If you’re not sure of the best ways to handle your credit card transactions, learn from these four payment processing errors you might be committing that harm profitability.
Error #1: Not Getting Enough Customer Information
Getting as much customer information as possible with every order helps protect your business from paying a higher rate than necessary. For instance, if your business takes credit card orders over the phone, make sure you always ask for the customer’s credit card billing address and zip code. While you might assume that the billing address matches the shipping address, this is often not the case. Simply entering the correct billing address with every order ensures that you pay the lowest rate possible.
Businesses that process high-value, in-person transactions on items such as jewelry should consider asking customers to present their driver’s licenses. Recording a customer’s driver’s license number along with their credit card information could help with disputing possible charge-back claims.
For all types of credit card transactions, getting as much information as possible helps protect your business’s bottom line.
Error #2: Not Batching Out Every Day
Another common error businesses make with their payment processing is not batching out their credit card transactions every day, usually to avoid paying a batch fee daily. However, to get the most favorable transaction rate, businesses should batch out their transactions within 24 hours. Letting your business’s transactions accumulate for longer increases your risk of paying a higher transaction rate.
Additionally, most credit card authorization codes are only valid for 30 days. If you wait longer than 30 days to batch out a transaction, you may be unable to collect the funds for that transaction. Waiting to batch out transactions also carries the risk of customers no longer having enough space under their credit limits to get the purchase approved. Finally, American Express actually imposes penalties on transactions that are not batched within 30 days.
To ensure you’re able to collect your funds and receive the most favorable transaction rate, batch out your credit card transactions once per day.
Error #3: Not Providing Enough Data Security
To avoid profit-draining costs and fines, you should ensure your business provides robust payment data security. Achieving PCI compliance is a great way to avoid significant fines and make sure you are taking the right steps to protect your payment data. Not complying with PCI regulations puts your business at risk for fines of up to $100,000 per month. Additionally, non-PCI-compliant businesses that experience a data breach also face card replacement costs and forensic audit costs.
To secure your business’s payment data, you should have strong passwords, only allow employees access to customer payment information on a need-to-know basis and protect your data with a firewall. Then, work with your merchant services or credit card processing provider to take the necessary steps to achieve PCI compliance.
Error #4: Not Having The Right Payment Technology
If your business accepts in-person credit card payments, you need to have the right payment technology. You should have an electronic cash register or POS terminal that is compatible with chip and pin credit cards. Having technology that works with these cards protects your business from the costs of fraudulent payment transactions. Under the terms of the EMV liability shift, fraudulent payment transactions authorized at your business are now your financial responsibility. However, having machines that offer robust fraud prevention by working with chip and pin credit cards shields you from these costs.
Acquiring state-of-the-art payment technology also offers your business benefits beyond fraud prevention. For instance, being able to accept mobile payments may attract new customers. Also, some POS terminals offer inventory management and revenue-tracking capabilities that could help boost your profits. If you continue to rely on outdated or ultra-low-cost payment machinery, you risk not only the costs of fraud, but also miss out on information that could help boost your bottom line.
The best way to avoid profit-reducing payment processing errors is to work with an expert merchant services or credit card processing company that is committed to helping your business succeed. These companies offer payment processing guidance, around-the-clock customer support and advice on the right fee structure for your business. All of these benefits add up to higher profits for your business.
Are you looking for a payment processing and merchant services provider as dedicated to your bottom line as you are? Schedule your free 30-minute consultation with a certified payment processing expert today.