As consumers increasingly face a cashless and digital economy, the use of credit cards is only expected to rise. According to some estimates, credit card transactions globally are expected to hit USD 7.8 trillion by 2026, up from USD 7.1 trillion recorded in 2021.
In the Philippines, credit card payments are expected to grow by 10.1 percent in 2023 to reach PHP 2.5 trillion (USD 45.3 billion) as forecasted by GlobalData. Though cash is still the most popular payment method in many places around the world, cashless options such as credit cards, debit cards, QR payments, and digital wallets are rising.
This upward trend in the use of credit cards may be due to consumers realizing how convenient credit cards can be. While there are some disadvantages associated with using them, the truth is that credit cards provide convenience and flexibility when used correctly.
For startups and small- to medium-sized enterprises or SMEs, it’s an essential business strategy to accommodate credit card payments, along with other forms of cashless transactions. If a wide range of payment options are made available to them, customers would be able to pay for their purchases however they want, which could favorably affect their customer experience.
Processing credit cards though comes with its fair share of challenges. Merchants often encounter common credit card processing issues that can hinder their operations. In this article, we’ll explore these issues and provide practical solutions to overcome them.
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Payment Declines
Nothing is more disheartening for both the customer and the merchant than seeing the dreaded “Payment Declined” message.
It often leaves many individuals wondering, “why is my card declining when I have money?” It can happen for various reasons, such as insufficient funds or an expired card. It can happen for various reasons, such as insufficient funds or an expired card.
To resolve this issue, clear communication is key. Ensure your customers are aware of any potential issues by providing automated reminders for upcoming payments. Best of all, ensure that you have a backup payment method to offer them.
For business in the Philippines, one of the most respected financial technology (fintech) companies, Maya Business, may have the solution in this regard. Designed especially for brick-and-mortar stores, the Maya Terminal card swipe machine is a new-generation POS device that accepts various cashless payment options, including credit and debit cards, QR codes, and digital wallets.
With this device, which is more than just a credit card machine, your business can accept a range of payment options from your customers.
Chargebacks
Chargebacks occur when customers dispute a transaction with their issuing bank. This often leads to lost revenue and extra administrative work. Not to mention, some banks charge fees for chargebacks.
Prevent chargebacks with clear policies and excellent customer service. Moreover, make sure you can provide evidence for legitimate transactions. Lastly, keep meticulous records to support your case in the event of disputes.
Fraudulent Transactions
Credit card fraud is a global concern that can damage your reputation and bottom line. With the rise in the use of credit cards, fraudulent transactions are also expected to increase. According to a 2021 Nilson Report, global losses due to credit card fraud amounted to USD 28.65 billion.
Combat this issue by investing in fraud prevention measures, such as AI-powered fraud detection tools and real-time transaction monitoring. Moreover, verification processes, like requiring the card’s CVV code and encouraging customers to use two-factor authentication, can also deter fraudsters.
Using modern POS and payment gateway solutions that adhere to global security standards can also help deter fraudulent activities. For example, the Maya Terminal card payment machine prevents fraudulent transactions, thanks to being EMV-certified and PCI-DSS-compliant.
For online transactions, you can rely on payment gateway products like Maya Checkout, which has 24/7 fraud protection baked into it as a featur
Payment Gateway Issues
For e-commerce or online transactions, technical glitches or downtime with payment gateways can disrupt your business operations. Recurring issues like this can wreak havoc on your website, leading to a high cart abandonment rate.
That’s why it’s important to choose a reliable payment gateway provider, such as Maya Business. Aside from a credit card terminal, Maya Business offers online payment solutions like Maya Checkout and specific e-commerce plug-ins for WooCommerce and Shopify.
What’s more, Maya Business also provides alternative payment methods like Payment Links, which allows you to accept payments from customers through a link that you can send via popular messaging apps. This backup payment method can help you continue accepting payments even when your website might be experiencing downtime because of technical issues.
High Processing Fees
High processing credit card fees can eat into your profits, especially if you’re running a small business. Undoubtedly, the high merchant discount rate or MDR is one of the significant barriers for some startups and SMEs to accommodate credit and debit card payments.
With the Maya Terminal, however, there’s no need to worry about high MDRs. Maya Business’s MDR for transactions made through this device starts at 1.5% per transaction, but it can vary depending on the financial institution. That said, Maya Business can arrange a custom package for your business, ensuring volume discounts, multi-product discounts, and other considerations.
Expiry Date Issues
Using cards past their expiry dates can cause transaction failures, especially with recurring payments. It may be a trivial issue, but it’s one that causes payment delays nonetheless.
You can avoid this minor oversight by reminding your customers to update their card information when necessary. Moreover, make sure to implement systems that handle recurring payments smoothly, verifying card expiration dates in advance.
Navigating the world of credit card processing can be tricky, but with the right strategies and the right payment solutions provider, you can overcome the common challenges that come your way.
Remember, your goal is not just to accept payments but to provide a secure and hassle-free payment experience for your customers. By doing so, you’ll not only enhance your business’s reputation but also pave the way for growth and success in today’s competitive marketplace.
