What if my Representment is Incorrectly Declined?
April 10, 2024
And what if a successful RDR or Ethoca submission gets charged back? Read on This blog breaks down the next steps.
11 Things Every Merchant Needs To Know Before Taking Payments
Payments can be a minefield for Merchants.
Payments is full of fraud, chargebacks, and changing requirements. It’s also quite a bit more involved and complicated than just buying a credit-card swiper and calling it good.
But don’t feel discouraged. We’ve put together a handful of tidbits for Merchants getting started in Payments.
11 Things Every Merchant Needs to Know Before Taking Payments
- Shop around for the right Processor and PSP
Don’t pick up the first solution without seeing what the market has to offer. No Processor or PSP is exactly the same. Some are large, some are small. Some require strict underwriting, some may not. Some have specific solutions tailored to specific Merchant industries, some don’t.
Because of this, everything from prices, thresholds, capabilities, and expertise can vary. - Easy isn’t always better
When finding a Merchant account, sometimes Merchants choose the easiest option available. Companies like Stripe or Square for example, may require little underwriting and fewer steps to integrating into your website. That can be extremely appealing to a Merchant without much transaction volume or a less technically savvy workforce. But easier isn’t always better in Payments.
Solutions with minimal underwriting can mean aggressive thresholds, high fees, and minimal support. Shortly after breeching a threshold, Merchants can also be dropped quickly. And once dropped, finding a new Processor with a poor chargeback history can be exceptionally difficult.
In the same vein of shopping around, don’t overlook spending the time, money, and resources for an underwriting solution. - What kind of customer support will you need?
When issues start to growing and festering, whether with setting up equipment and portals, or dealing with disputes, having a strong support network can save time and money. Because let’s face it, blogs and forums are a great start—but there isn’t always an in-depth answer to your specific and highly-individual questions.
Unless the Merchant is processing a large quantity of transactions, getting a dedicated account manager is difficult with a large Processor. Sometimes a smaller Processor is willing to provide the needed support for your business, industry, and individual Merchant needs. - Will your technology needs be supported by the Processor?
Processors aren’t all cut from the same cloth. Technology can be a hard hurdle to overcome once onboarded. Before pulling the trigger, consider:- What are their Point of Sale (POS) capabilities?
- What does their reporting look like? Is it confusing, difficult, and time consuming?
- How easy is the setup process? Some Processors are integrated into no-code tools, some might require a team of developers to integrate into your website.
- Chargebacks will happen
Chargebacks are when a customer calls their bank to dispute a fraudulent charge. That money is taken out of your Merchant account and refunded to the card holder. Chargebacks usually include service fees that can change depending on you Processor, reason code, MCC, ratio, and transaction volume.
Unfortunately there is no way to completely prevent all chargebacks. They are bound to happen and considered the price of doing business. Have the right procedures in place to fight them and find PSP solutions that can help you track chargeback compliance rates.
Learn more about preventing chargebacks - Fight all chargebacks with representments, and know which ones are worth fighting
Representments fight chargebacks. It’s a response that you can often file through your Processor, with a third-party service, or with a representment generator. It includes a letter that introduces the Merchant, states that the chargeback is fraudulent, and backs up the argument with proof of intent.
Representments can be expensive, and riddled with service fees that might even exceed the price of the transaction—this is especially painful if you are fighting a large quantity of chargebacks. But they are necessary for keeping within compliance. Tools like Slyce360 can help optimize which representments to fight and which to table, which can save money in lost-cause disputes.
Read on for a full break down of what goes into creating a successful representment:
How to win more representments - True fraud vs. friendly fraud
Merchants can face 2 types of fraud. The first type is true fraud; this is where the cardholder is actively trying to defraud the Merchant by using stolen or unauthorized cards. Friendly fraud in contrast is hard to prove if the card holder being malicious; sticking to its name, this type of fraud is when a legit customer disputes an intentional purchase. Friendly fraud tends to happen when a transaction is thought to be unauthorized, or if a cardholder thinks they didn’t receive what they paid for. But where the line blurs is when a customer actively defrauds the Merchants and acts as if they did nothing wrong.
With the right tools and procedures in place, true fraud can be caught and dealt with. Friendly fraud is often far harder to prove though. Intent to defraud is tricky to prove. And considering the ease of chargebacks and the disconnected nature of ecommerce, calling your bank and asking the Merchant for a refund has never been easier.
Read more about true and friendly fraud - Consider RDR, CDRN, and/or Ethoca
Processors might automatically enroll and require you to use these tools. If not, they can be extremely useful and sometimes underused. They can give the Merchant the ability to trigger a refund before the cardholder files a chargeback, saving time, money, and potentially your thresholds.
Want to learn more about chargeback mitigation tools? Start here - Make your refund policy clear
Put your refund policy on bills, receipts, and your website. Your customer needs to understand the rules around returns and how to contact your shop. This does a couple things. Firstly, it can help cut down on friendly fraud chargebacks. Secondly, it can give you more evidence to fight chargebacks with—it can provide compelling evidence that the Merchant is acting in good faith. - Compliance thresholds will changeThe threshold that you’re following will slightly (or drastically!) change depending on how the Merchant is underwritten and the Card Associations’ (VISA, Mastercard, AMEX, and Discover) new processes, regulations, and tools. Tracking compliance can be difficult for Merchants. It’s common for a Merchant to need to monitor all their thresholds. This becomes time consuming because you might also have to reach out to your Processor to get your hands on compliance changes.
Slyce360 shows you the thresholds. No more waiting for your Processor to get back to you with changes. And no more figuring out how to manually track your threshold health. - Breech compliance and lose your account
Every Merchant has compliance thresholds—breeching them is serious business. It can lead to heavy fines and potential account closure. Once you lose your account, finding a new processor becomes exceptionally difficult.
Why Processors care about thresholds?
Slyce360 Makes Payments Easier
Powerful alerts and metrics let Merchants track compliance in real-time. Predictive insight tells you the root cause of growing chargebacks and friendly fraud. And prescriptive action plans help you win more representments.
Ask your Processor or ISO/MSP about Slyce360.
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