Best Practices For Taking Online Payments For The First Time

payment security

Partnering with the right suppliers is essential if you want to start taking online payments for the first time. Ecommerce is no longer in its infancy and therefore there are many merchants firmly established in the marketplace.  From the pioneers of Amazon and eBay, to the huge range of choice online in every sector, competition is high. Therefore if your brand or organisation wants to make an impact on the market, get expert support to help you do so.

In the UK and Europe the ecommerce market is mature. However there is still room to innovate, whether it is expanding into emerging markets or offering domestic consumers more choice and convenience. This is why partnering with online payment experts is important, allowing your business to access their knowledge and business intelligence.

One of the advantages of introducing online payments for the first time now, is that there is a wealth of research, data, and solutions available to help your business get it right.  Here we share best practices to help you get started. However, if you want to discuss the dynamics of the sector you operate in and how online payments can be optimised specifically for your business, get in touch with our payments team.

Online Payments Customer-Centric Best Practices

Consumers expect a smooth, fast online payment experience. They demand and should expect a high level of security, without that interfering with the user experience. They also want choice, a range of options from traditional credit and debit cards to modern alternatives, such as Apple Pay, PayPal and other alternative payment methods.

Retailers and any organisation that wants to start taking online payments need to deliver according to customer expectations. But at the same time, a smooth user experience is only part of the challenge. Getting organised behind the scenes is equally important. Here are a few best practices we recommend for taking online payments for the first time.

#1: Publish Terms and Conditions, Returns and Shipping Policies

Most Payment Services Providers (PSP) – payment processors, payment gateways and acquirers – won’t allow an organisation to take payments without terms and conditions and clearly stated policies.

When you are ready to take payments online, you enter into a contractual agreement with every customer. You agree to deliver a certain product or service for an agreed price. The customer has accepted that price and agreed to pay. Between a customer making a payment and an organisation receiving that money is a myriad layer of PSPs and technology that make that transaction possible.

Without terms and conditions (or terms of service), a returns policy (if physical goods are being sold and shipped) and shipping/postage policies, you and the customer are vulnerable to fraud. As a result, so are the companies – including banks and card schemes – that make online transactions possible. Which is why clearly stated terms, on the website, in the checkout and as part of the order and delivery confirmation process (in emails) is essential.

#2: Verify your customers

Knowing who your customers are reduces the chance of fraud. ‘Friendly fraud’, which is when a seemingly genuine customer places an order then claims they didn’t receive it, to get a refund, is a rising problem.  Payment card fraud is also a threat for online merchants, with fraudster using stolen card data to make purchases.

Verifying customers using secure two-factor authentication – such as Verified by Visa or Mastercard SecureCode – can help protect your business. It is also best practice to ensure shipping and billing addresses are the same unless the customers chooses a gift option or specifies a different delivery address.

There are other ways to verify customers, including fraud prevention tools that checks IP addresses match the customer’s payment card location. Bio authentication is another option through third-party payment options, including Apple Pay, and we expect this to become more commonplace as technology evolves.

#3: Make your organisation name clear on bank/card statements

Chargebacks are a challenge for the online merchant. They cost businesses money and can even result in merchant accounts being terminated. One reason customers request chargebacks is when they don’t know who has charged their credit or debit cards. If they don’t recognise a company name, they might be inclined to ask for the money back through their card issuer or bank, costing merchants in chargeback fines, the refund value of the sale, and in the cost of the goods themselves.

An effective way to reduce ‘mistaken’ chargebacks is to ensure transactions appear on bank statements with a name the customer will recognise. Using the group company name instead of the brand the customer bought from is a common mistake that can result in chargebacks.

#4: Support and customer services

Although online payments are a faceless process – designed to reduce the steps between selecting a product or service, and paying for it – consumers still want reassurance that support is available.

If they have questions, you should be able to answer them.

During working hours, customers should be able to pick up the phone, send an email or even talk to someone using a Live Chat feature on your website. And then outside office hours, self-serve and artificial intelligence-powered options should be available to answer questions a potential customer might have about your products or services.

#5: Build trust with your customers

A significant barrier to successful online payment processing is trust. This is not such a problem for established retailers, business and organisations that are introducing online payments as a way of optimising payments for their existing customer base. However, for merchants that are building brand reputation and awareness, customers want reassurance that their transactions are secure and that the business will fulfil the contract. There are three key areas that can build trust with your customers:

  1. Trusted payment gateway – while many merchants want a branded payment page, to increase conversion it is often better to use the trusted reputation of your payment gateway provider. Redirecting customers to the PSPs payment page can provide the reassurance customers want that their payment and data is safe.
  2. Trust badges and security logos – consumers also look for evidence that websites are secure. From the site security status on the web address, to trust badges and security logos from Norton, McAfee and TRUSTe.
  3. Reviews and testimonials – as well as concerns about the security of a website and online payments, customers are also concerned about whether their transaction will be honoured, that goods are shipped according to T&Cs, and that any issues are resolved satisfactorily. Online reviews are an important way to reassure customers and there are numerous tools available to collate and promote them (Google, Facebook, Trustpilot, TripAdvisor etc.).

Consumers are increasingly surprised when online payment options are not available, be it to buy a product or pay for a service. However while they increasingly want this option, they will not use it if it doesn’t offer choice, convenience and security.  A smooth, customer-centric online payment process is the best way to convert new and existing customers to this method of payment.

You may also like to read our article on How To Get Started With EU Cross Border Online Trade, which provides more information for merchants wishing to expand into new markets.