Feb
09
2022
February 9th, 2022 by Admin

John Stewart
January 17, 2022
https://www.digitaltransactions.net/trends-like-open-banking-and-bnpl-will-sustain-e-commerces-hot-streak-a-report-says/

Open banking, single-click checkout wallets, and the hot buy now, pay later trend will all help drive e-commerce volume worldwide in the coming five years, predicts Juniper Research in a report released Monday. This momentum is likely to push online sales long after the short-term impetus from the pandemic subsides, Juniper says.

E-commerce volume totaled $4.9 trillion globally in 2021, a figure the United Kingdom-based research firm forecasts will reach $7.5 trillion in 2026, when China will control a 37% share. Wider availability of multiple e-commerce channels, including mobile devices, will propel the overall growth worldwide, Juniper says. But along with the boom in e-commerce will come a corresponding growth in fraud via identity theft, account takeovers, and fraudulent chargebacks, the report warns. China, for example, will account for more than 40% of fraud losses worldwide in 2025, at more than $12 billion, Juniper forecasts.

Open banking is a trend by which fintechs can verify balances in consumers’ accounts and transfer funds to pay for online purchases. As standards bodies work to promulgate standards for this business, e-commerce payment providers “should … partner with specialists in … specific emerging payment areas to keep pace with changing merchant expectations around acceptance types,” the research firm says in its release, referring to digital wallets and crypto as well as open banking.


Open banking has taken on a higher profile in the global payments market with efforts by both of the global card networks to acquire firms that specialize in this area. Visa Inc. has acquired Tink AB, while Mastercard Inc. bought Aiia and Finicity Corp.

Physical goods will continue to dominate e-commerce spending, the report says, accounting for 82% of payment value by 2026. To tap into the trend, Juniper advises, payments providers should support buy now, pay later plans, which allow consumers to split purchases into four equal installments paid over a six-week period at no interest. BNPL is becoming more controversial, however, as the Consumer Financial Protection Bureau has launched an investigation of the option and as reports emerge that consumers with multiple accounts are more likely to miss a payment.

While still a big trend, e-commerce sales in the U.S. market cooled significantly last year as the pandemic effect lost some of its force. Third-quarter sales in 2021 reached $214.6 billion, up 6.6% year-over-year, according to the Census Bureau, which tracks retail sales. That follows an 8.9% rise in the second quarter and three straight quarters with increases of 32% or more. Fourth-quarter 2021 results are not yet available.

Posted in Credit card Processing, Credit Card Reader Terminal, Credit Card Security, Digital Wallet Privacy, e-commerce & m-commerce, Financial Services, Mail Order Telephone Order, Merchant Account Services News Articles, Merchant Services Account, Mobile Payments, Mobile Point of Sale, Point of Sale, Small Business Improvement, Smartphone, Uncategorized, Visa MasterCard American Express Tagged with: , , , , , , , , , , , , , , , , , , , , , , ,

Sep
11
2020
TO PREVENT CHARGEBACK
September 11th, 2020 by Admin

The chargeback process was introduced more than four decades ago as a consumer-protection mechanism. It was meant to inspire consumer confidence in payment cards, which were still a novel concept at the time. Fast-forward to today, though, and these forced payment reversals have evolved into a significant problem for online merchants.

Chargeback abuse—commonly known as friendly fraud—is a major source of loss. In fact, chargeback issuances resulting from friendly fraud were expected to reach $50 billion annually in 2020, according to Mercator Advisory Group.

Even then, this figure is a low estimate. It doesn’t account for current trends in a post-Covid environment, where we’ve seen a dramatic increase in friendly fraud. These attacks were already up by the end of March, and there’s no sign that they’re going to slow down.

Covid-19 might look like the source of the problem on a superficial level. If we dig deeper, though, we see four underlying factors behind the preexisting upward trend in chargeback filings:

  • More fraudsters view the CNP environment as the “channel of least resistance;”
  • Inconsistency in technologies and regulations across different markets;
  • The rise of mobile banking;
  • The response by card networks like Visa and Mastercard.

These four factors carry diverse ramifications for the market. For instance, roughly $118 billion in e-commerce transactions are declined each year, according to Javelin Strategy & Research. Most of these rejected purchases are false positives, meaning the merchant unnecessarily rejected the purchase in hopes of avoiding a chargeback.

Clearly, there’s a growing disconnect between merchants, financial institutions, and card networks regarding how best to address this situation. We can see this reflected in the fact that the rate of chargeback issuances in North America is expected to significantly outpace those in the European market. This is attributed to factors like strong customer authentication protocols required by the Revised Payment Services Directive (PSD2), and more widespread use of 3-D Secure technology.

The pressure is on for industry players to find more comprehensive solutions for chargebacks. These solutions must be data-driven and adaptable, though. Otherwise, the growing disconnect between cardholders, merchants, financial institutions, and card networks will exacerbate existing problems in the market, leading to further losses.

The good news is that, in the meantime, there are strategies merchants can employ to address these concerns. For instance, even though friendly fraud operates by concealing itself behind false chargeback reason codes, it’s still helpful to have a clear understanding of what each reason code means in context.

Merchants can’t avoid friendly fraud in the same way they can detect criminal attacks or eliminate merchant errors. However, they can minimize friendly fraud risk by adopting key best practices, including:

  • Notifying customers to remind them about recurring payments;
  • Keeping organized and well-documented transaction records;
  • Using delivery confirmation when shipping physical goods;
  • Providing easy access to round-the-clock, live customer service;
  • Providing a quick response to any refund or cancellation requests.

Also, if a merchant identifies a chargeback as friendly fraud, it’s important to engage that dispute through the representment process. This is a complex, time-consuming process, which is why many merchants opt to outsource their chargeback management. It’s still possible to conduct the process with in-house management. However, it will require strong evidence to support the merchant’s case, such as:

  • A legible sales receipt
  • A tracking number
  • Any emails or transcripts of communications you’ve had with the customer
  • Delivery confirmation information
  • A record of in-store pickup
  • Photographic evidence (when available)

This evidence needs to be contextualized with a chargeback rebuttal letter, explaining why the original transaction was valid. Also, merchants are on a tight schedule. In most cases, they have only a few days to provide a response to their acquirer.

Chargeback management can be a difficult and confusing process. But, with the problem of chargeback abuse only set to grow over time, it’s something merchants can’t afford to take for granted.

—Monica Eaton Cardone is the chief operating office and cofounder of Chargebacks911, Clearwater, Fla.

COMMENTARY: What Will the Future Hold for Chargebacks in Digital Payments?

Monica Eaton-Cardone September 11, 2020 Competitive Strategies, E-Commerce, Fraud & Security, Issuing/Originating, Mobile Commerce, Point-of-sale, Transaction Processing

Posted in Best Practices for Merchants, Credit card Processing, Credit Card Security, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Uncategorized, Visa MasterCard American Express Tagged with: , , , , , , , , , , ,

Apr
07
2014
April 7th, 2014 by Elma Jane

Business-to-business ecommerce describes Internet-enabled transactions between businesses, such as a manufacturer and a wholesaler, a wholesaler and a retailers, or a wholesaler and a business user. The B-to-B ecommerce market was expected to exceed $550 billion in the U.S. last year, offering great opportunities for distributors and manufacturers to streamline sales, boost profits, and engage with new customers.

Since the late 1990s, businesses have been using the Electronic Data Interchange (EDI) system to transfer purchase orders and similar structured information electronically, representing, if you will, a form of B-to-B ecommerce.

Separately, some B-to-B sellers have created websites on which business customers can make purchases as if they were shopping on a business-to-consumer site. This category of B-to-B ecommerce may enjoy the most growth and offer the most opportunity.

 

Important points to consider of running a B-to-B ecommerce site.

 

B-to-B Customers Are also B-to-C Customers

B-to-B sites often trail consumer sites in technology, function, capabilities, and design. Typically not good enough.

As an example, the U.S. B-to-B site for a major multinational manufacturer, which includes information for dealers in the U.S., can only be viewed on Internet Explorer, and won’t work in any other browser, including Firefox, Chrome, Opera, or Safari. And don’t even think about visiting this site on a mobile device. It just won’t work.

This is a ridiculous business decision. It forgets a fundamental fact about B-to-B ecommerce customers. They are also B-to-C ecommerce customers.

It is extremely likely that the professional shopper on an ecommerce-enabled B-to-B website has had at least some experience shopping on consumer ecommerce sites, which all have compelling product photography, good navigation, good search capabilities, and good content.

A B-to-B ecommerce site must provide the same visual and functional experience as the best B-to-C ecommerce sites.

Personalization Is Vital

B-to-B shoppers may require a greater level of personalization than B-to-C customers, since businesses may have contract prices, special payment terms, or negotiated shipping rates.

Business relationships may be very deep and complicated. It is not unusual for B-to-B ecommerce sites to require registration before showing prices or shipping rates or offering a quote. This login requirement allows the B-to-B ecommerce site to personalize almost every aspect of the transaction.

A good B-to-B ecommerce site may take a little longer to launch since the system for handling relatively complex business relationships can take some time. But once it is in place, this personalization will mean that the relationship could be longer lasting.

Sales people Are the Primary Marketing Vehicle

While it is both possible and likely that B-to-B ecommerce sites will be able to acquire new customers simply by making products easy to order online, salespeople who contact customers are probably the B-to-B ecommerce seller’s primary and best marketing channel.

Salespeople can attract new customers or deepen relationships with existing shoppers. Sometimes, it can be enough to follow up after a B-to-B sale with a call to make certain that the transaction went as expected.

Shopping Is Part of Your Customer’s Profession

One of the most significant differences between B-to-B and B-to-C ecommerce is that shopping is part of the B-to-B ecommerce customer’s daytime job.

This means that the stakes can be higher for the B-to-B seller. If the shopper has a good experience, that shopper is likely to return and reorder repeatedly – even suggesting the seller to co-workers or other divisions. But if something goes wrong, particularly something that would cause the shopper to miss deadlines at work or appear in some way to have done a poor job, that shopper will likely blame the B-to-B seller. Depending on the unhappy shopper’s influence, the B-to-B seller might lose the entire account, including many individual buyers or divisions.

This means that order handling and transactional communications must be top notch. Some B-to-B ecommerce sellers will call customers to confirm orders or shipments when the customer has ordered a large quantity, very expensive items, or requested express shipping, since these orders may represent important transactions to the customer.

What Ecommerce Can Do for your B-to-B Business

If you sell to other businesses, ecommerce should have three potential benefits for your business.

First, it may help new customers find you. Having an easy-to-find and use ecommerce site means that new customers – customers with a need – will be able to locate your business regardless of geography or prior relationships.

Second, B-to-B ecommerce may streamline sales for existing customers. Some of your current customers will appreciate the ability to order online, 24 hours a day 7 days a week. The process may also be faster than sending emails or, even worse, faxed orders.

Finally, B-to-B ecommerce may improve margins and boost profits. It may be possible to provide customers with a better ordering experience and better customer service using ecommerce while spending less on labor and order processing. Any cost savings that B-to-B ecommerce brings may drop straight to your business’s bottom line.

Posted in Credit card Processing, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Mobile Payments, Mobile Point of Sale, Small Business Improvement Tagged with: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,