Our typical reader is a business owner searching for the perfect payment processor. In this article, we’ll cover three important topics about what bankers need to know about merchant services. They are an important part of the process. After all, you do need a checking account at a bank to accept credit card payments!
Secure Card on File
A wonderful feature we offer is to store cardholder’s payment information in a secure, online system. When stored, the business staff still has access to recharge or refund the card on file according to their needs and cardholder’s authorization. Our clients love this feature because it keeps their customers’ credit card information safe, just like you keep their money safe. We do this through tokenization, or the replacement and mixing of card numbers into characters that only the payment processor can decode.
A list of what bankers need to know about merchant services wouldn’t be complete without an understanding of the underwriting process. We have stipulations, just like you, about what businesses will get approved. Just as you evaluate a business to approve them for a loan, our underwriters evaluate a business to approve them for a merchant account. Merchant account providers have liability on merchant accounts in situations whereby merchants don’t pay their processing fees or their losses on cardholder disputes, known as chargebacks. During the underwriting process, we examine their time in business, processing history, industry type, payment collection processes, goods or services rendered, and business credit. Sometimes we’ll also need to check an owner’s personal credit or the company’s financial statements. We’ll also examine a business’s encounters with fraud and their propensity to have chargebacks.
Yet another aspect of payment processing you are familiar with: cardholder disputes. If a cardholder experiences fraud on their debit/credit card issued by your bank, you’ll help them by charging back this transaction to the merchant who ran the sale, and rightfully so. This situation leaves the merchant reimbursing the cardholder for the fraudulent transaction. The merchant loses the money, even if they already delivered products to the fraudster who perpetrated the crime. What bankers need to know about merchant services chargebacks is that a good merchant account provider should help their merchants reduce or eliminate chargebacks. To do this correctly, the business needs to identify or prevent fraud from occurring at the point of sale.
At PayFrog, we help train small businesses on fraud prevention and chargeback protection so the fraudulent sale never happens in the first place. We train them properly collecting cardholder authorization. We install compliant EMV chip card readers and NFC contactless readers for more secure transactions. We educate them on the benefits of processing sales with a matching billing address and a CVV code for online transactions. We even share stories of popular scams or heists that have been carried out on similar business types as theirs so they can be aware of the signs of fraud so they can spot it and catch it as it is unfolding. On top of all this, we enforce PCI Compliance for small businesses. PCI Compliance prevents hacks and data breaches that expose cardholder data, thus preventing the fraudsters from stealing card data in the first place.
We are a huge supporter of small businesses and a big believer in working with trusted referral partners in the community. We’d love to have you in our corner when a business owner is looking for the right credit card processor, and you’ll love having us when our customers are looking for the right bank to partner with! You can feel secure in your referral after checking out our core values and what makes us qualified.