Credit Card Processing Mistakes to Avoid in Ecommerce

The life’s blood of ecommerce, credit card payments are the killer app without which online shopping would not exist. Of course, along with the convenience they provide, credit cards bring some pretty significant issues of which digital merchants need to be aware.

Here are five common credit card processing mistakes to avoid in ecommerce.

1. Skimming Over Terms and Conditions

We’ve all become accustomed to simply clicking “Agree” when presented with a Terms and Conditions screen. As 50,000,000 Facebook users recently discovered, that’s probably not the best idea when you’re counting on business to be done in a specific way. Skimming over the terms and conditions can be positively ruinous for your ecommerce store when it comes to credit card processing agreements.  You could be leaving yourself open to all sorts of financially debilitating situations. Read over everything carefully before signing, or have it gone over by someone you trust who has competency in such matters.

2. Agreeing to a Volume Requirement

Many processors insist upon merchants doing a set dollar amount of business with them each month. Meanwhile, if you’re just starting out, you have no idea where your sales volume will land. If you’ve agreed to one of these deals, you could be on the hook for money you didn’t make. If you must sign on to a volume agreement, start out with a low volume processor, then scale up as your sales increase.

3. Overlooking Hidden Fees

Every processor has fees. After all, that’s how they make their profits. Now, with that said, don’t just automatically go with someone who seems to have the lowest fees. There are many ways a lower fee structure can wind up being costlier in the long run. Fees can vary based upon the type of credit card your customer presents. Online transactions can entail higher fees than physical ones in brick and mortar stores. And, those “customer rewards” offered by certain card companies are paid for by charging you higher fees too. Being mindful of the fee structure when you choose a processor is an imperative.

4. Skimping on Fraud Protection

Whether you’re running ebooks online stores, selling furniture on the ‘net or cosmetics, one good run of chargebacks in a given month could put you out of business. Chargebacks can occur when unscrupulous individuals steal credit card numbers and use them to make purchases at your store. When these charges are discovered by the rightful owner of the card and reported to their financial institution, you can be compelled to refund the legitimate cardholder. This puts you at a double loss. You’re out of the money as well as the merchandise the fraudster “purchased”. You want to work with a processor who will do everything possible to minimize fraud—and offer you protection if criminals slip through their defenses.

5. Taking on The Responsibility of PCI Compliance

Payment Card Industry Data Security Standards (PCI DSS) were put in place to make credit card transactions as secure as possible. A necessary part of doing business, they can also be expensive to meet. Further, PCI DSS protocols evolve as new threats emerge and methods to thwart them are developed. Keeping up can be difficult when you’re also trying to run your business. To avoid this, choose a processor who maintains PCI compliance and make sure your site is being hosted by a PCI compliant entity as well.

Affording the proper attention to these five credit card processing mistakes to avoid in ecommerce will save you a lot of headaches. They will also help you keep more of your hard earned money where it belongs—in your bank account.


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