Credit Card Payment Challenges Faced by Businesses

We’ve come a long way when it comes to basic commerce. First, we started with simple bartering exchanges, and then we moved to coinage meant to be redeemable for precious metals like gold or silver. Now, we live in a digital age where thousands of dollars can be exchanged at the click of a button or swipe of a card. Credit cards are one of the shining examples of how sophisticated our financial system has become. People can effectively spend money they don’t necessarily have to purchase just about anything. However, many things go on behind the scenes when processing credit cards that are much different from a typical debit transaction, both on the ends of the person handling the payment and the eventual recipient.

Here are a few things businesses need to account for when dealing with credit card payments:

Payment integration

The massive amounts of data used in credit card transactions need to be compatible with the bookkeeping practices of the business in question. Payment integration refers to how processed payments are structured and presented to the business owners. At their simplest, a raw dump of the relevant data can be taken and then later organized, but this is time-consuming and comes with a high risk of error. Properly integrated payments go to an easily explorable and organized ledger, so there are no differences in accounting across the books of business.

 

Fraud protection

Credit cards are highly susceptible to fraud by the sheer virtue of their design. There’s an entire shadow industry concerning stolen credit cards and their use to defraud legitimate business to the tune of about $21 billion annually. Suffice to say, credit card fraud is a big business. Since businesses have an inherent duty to their customers to protect their financial information, it’s necessary that they have measures in place to keep customer card information secure at all times. Different processors offer different levels of security, so it’s important to find one that delivers the level of security necessary to insulate both clients and the business themselves from fraud.

 

Payment processing

How payments are processed is necessary for anyone who wants to receive money via credit card. Payments need to be taken from the customer, and then deposited in the account of the business in question, something that requires some outside help. Depending on the industry in question, fees will vary as well as the full range of services offered. High risk credit card processing, for instance, requires a processor willing to deal with the risks involved, such as dealing with refunds or chargebacks for an online dating service. Payment processors always have fees associated with them when it comes to dealing with credit card payments. As inconvenient as it might seem, it’s a simple cost of doing business at this point.

 

Conclusion

These challenges might seem daunting, but they aren’t impossible to overcome. In fact, now, each of these problems has a multitude of solutions that mean just about any business can get involved in taking credit card payments with very little in the way of hurdles. At first, credit cards were only accepted by major retailers who could handle the risk of fraud, as well as the fees associated. Now, the barrier to entry is quite low, with many small businesses both in person and online able to deal with receiving payments via credit card.


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