European e-commerce is predicted to reach €263 billion by 2011. The reason? Online retail is seeing a dramatic increase in both its consumer base and average spend per customer. From 2006 to 2007, online retail in Europe experienced a year-on-year increase in sales of 58%. And that number is expected to continue growing as late-adopters join the online shopping ranks.
No wonder High Street retailers are looking online to extend their market reach. Big names like Ikea, Tesco and M&S are launching or re-launching their online retail sites, putting pressure on smaller retailers to examine their market channels. But before you launch your e-commerce site, you need to consider your payment channels.
Finding the right solution for your business
The old adage “what you don’t know can’t hurt you” is far from the truth when it comes to e-commerce payment channels. What you don’t know can hurt you, costing your business in non-compliance penalties and charge-backs from fraudulent transactions.
Switching payment channels isn’t simply a matter of choosing a new method. For example, did you know that you require a different Merchant ID for each type of payment processing?
Your brick-and-mortar Merchant ID cannot be extended to online payments. Cardholder Not Present (CNP) transactions are at higher risk for fraud and identity theft and therefore, credit card companies require a higher level of security and identity verification. Retail outlets or mail order businesses moving online require a CNP or MOTO Merchant ID.
Failure to comply with the regulatory standards and security practices for processing CNP transactions could result in heavy fines, processing surcharges and potentially the loss of your Merchant ID status. Even worse, a security breach could cost you your business, as legal costs, lost opportunities and regulatory fines put the cost in the millions or even billions of pounds.
Understanding payment channels
Choosing the right payment channel requires understanding which ones will work for your business and which ones comply with regulatory requirements for that payment processing application. From services designed for mail order companies to complete e-commerce solutions, there are many payment channels to choose from:
Card terminal – Called a Point of Sale (POS) Terminal, card terminals are exclusively for cardholder present transactions. Card terminals include both automated card swipe and manual data entry systems.
IVR – Short for Interactive Voice Recognition, IVR refers to an automated self service channel that permits you to enter card details and transaction value data over the telephone, using the keypad or voice commands.
Call centre – Includes any person-to-person transfer of card details over the telephone. Call centre payments are manually keyed into a card terminal or directly into a virtual terminal for automated payment processing by a PSP.
Payment page – An online page where customers enter their payment details for real-time authorization. Payment pages may be hosted by a PSP or on your own site, however the latter require an additional step of securely transferring data to a PSP for behind-the-scenes payment processing.
Virtual terminal – An online card terminal for manually entering credit card information for CNP telephone and mail orders without the need for a full-scale internet payment solution.
Outsourcing payments to a PSP
Most merchants choose to outsource to a Payment Service Provider (PSP) to handle all aspects of payment processing including regulatory compliance. They benefit from additional perks like tools for risk management, transaction processing and real-time reporting so they can focus on growing their retail business, both online and offline. Even telephone and mail order businesses can benefit from using a PSP – it’s not only for online businesses.
Find out more: http://www.web-merchant.co.uk/
No comments:
Post a Comment