In the dynamic realm of ecommerce, embracing local payment methods is an absolute must. Without a doubt, diversifying your payment options has the power to supercharge your revenue and maximize your conversion rates. 
There are several reasons why every ecommerce business should offer relevant payment methods based on their audience. PPRO states that if <a href="https://www.ppro.com/news/retailers-risk-losing-customers/" target="_blank" rel="noopener">retailers</a> don&#8217;t offer the payment methods that their customers prefer, they could lose up to 42% of them. 
In this article, we’ll tackle all the details about local payment methods, the benefits of utilizing them and some tips to implement them in your ecommerce business. 
Let’s dive in!
<h2>Local Payment Methods in a Nutshell</h2>
Local payment methods refer to payment options that are specific to a particular country. Whether it&#8217;s <a href="https://www.shift4.com/blog/card-transaction-types-overview-merchants" target="_blank" rel="noopener">credit card payments</a>, direct debits, mobile payments, or Buy Now, Pay Later (BNPL), these options are tailored to meet your customer preferences. 
Integrating <a href="https://www.shift4.com/local-payment-methods" target="_blank" rel="noopener">local or alternative payment methods</a> so to say is an absolute necessity in today&#8217;s competitive landscape. By providing convenient payment options, you can minimize cart abandonment rates, showcasing your commitment to localization and customer-centricity. 
Curious about more benefits? Let’s have a look. 
<h2>4 Benefits of Offering Multiple Payment Options at Checkout</h2>
<h3>Maximizing Conversions</h3>
By providing multiple payment methods, you can reduce the barriers that could hinder the completion of a transaction, resulting in lower <a href="https://www.shift4.com/blog/checkout-abandonment-what-it-is-how-to-reduce" target="_blank" rel="noopener">checkout abandonment</a> rates and facilitate frictionless transactions, leading to higher checkout conversions.
<h3>Streamlining the Checkout Process</h3>
Payment methods take different amounts of time to process. But if you give your customers more than one option, you can speed things up! Take digital wallets or one-click payment methods for example, which can boost the checkout process. The efficiency contributes to a streamlined experience that saves customers time and enhances their overall satisfaction.
<h3>Reducing Cart Abandonment with Flexible Choices</h3>
Customers have all sorts of ways they like to pay. And if you want to attract as many people as possible, you should give them choices! Offering a bunch of <a href="https://www.shift4.com/online-payment-methods" target="_blank" rel="noopener">online payment options</a> means you can accommodate everyone, even those who have particular preferences or restrictions with certain methods. 
By doing this, you&#8217;re preventing website drop off and cart abandonment, which can happen when a customer can’t pay with the method they prefer. And guess what? Your customers will appreciate the freedom and ease that comes with having options.
<h3>Enhancing Customer Satisfaction and Loyalty</h3>
Offering multiple ways to pay at checkout isn&#8217;t just for a smooth shopping experience. It actually boosts customer satisfaction and loyalty. By giving a variety of payment options, you offer a personalized shopping journey.
When customers can choose their favorite way to pay, they appreciate your business&#8217;s flexibility. This strengthens their trust and loyalty towards your brand.
Having diverse payment methods is also good for international sales. It removes hurdles tied to <a href="https://www.shift4.com/blog/mastering-cross-border-payments-localization-strategy" target="_blank" rel="noopener">cross-border transactions</a>, making it more likely customers will complete their purchases. This leads to higher conversion rates.
<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-30193" src="https://assets.shift4.com/wp-content/uploads/2023/11/S4-Cover-Why-You-Should-Offer-Multiple-Payment-Methods-at-Checkout.jpg" alt="" width="1201" height="676" srcset="https://assets.shift4.com/wp-content/uploads/2023/11/S4-Cover-Why-You-Should-Offer-Multiple-Payment-Methods-at-Checkout.jpg 1201w, https://assets.shift4.com/wp-content/uploads/2023/11/S4-Cover-Why-You-Should-Offer-Multiple-Payment-Methods-at-Checkout-300x169.jpg 300w, https://assets.shift4.com/wp-content/uploads/2023/11/S4-Cover-Why-You-Should-Offer-Multiple-Payment-Methods-at-Checkout-1024x576.jpg 1024w, https://assets.shift4.com/wp-content/uploads/2023/11/S4-Cover-Why-You-Should-Offer-Multiple-Payment-Methods-at-Checkout-768x432.jpg 768w" sizes="(max-width: 1201px) 100vw, 1201px" />
<h2>How to Offer Multiple Payment Options</h2>
Handling payment tasks can be tough without expert help. But with payment pros on your side, things get way easier. They guide you and make the process simple.
We&#8217;re about to dive into the details to help you understand what to expect. You&#8217;ll learn how to set up payment solutions for your online business.
<h3>Analyze Customer Preferences</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Conduct a market research and analyze your target audience to uncover their payment preferences</li>
<li style="font-weight: 400;" aria-level="1">Collect data from customer surveys, feedback, and purchase patterns to identify the most popular payment methods.</li>
<li style="font-weight: 400;" aria-level="1">Let geographical factors, demographics, and customer behavior be your guide to tailor your payment options to specific customer segments.</li>
</ul>
<h3>Select the Right Payment Options</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Evaluate what your customers prefer and focus on payment methods that match your target audience.</li>
<li style="font-weight: 400;" aria-level="1">Provide a wide mix of payment options like credit and debit cards, digital wallets like Apple Pay and Google Pay, bank transfers, and Buy Now Pay Later (BNPL).</li>
<li style="font-weight: 400;" aria-level="1">Reach out to special markets by giving payment methods that they&#8217;ll like. This could be cryptocurrency for tech-savvy customers or invoice-based payments for B2B transactions.</li>
<li style="font-weight: 400;" aria-level="1">Make sure the payment methods you offer are safe, dependable, and well-known to build customer trust.</li>
</ul>
<h3>Partner with a Reliable Payment Provider</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Choose a reliable <a href="https://www.shift4.com/blog/choosing-the-right-payment-provider" target="_blank" rel="noopener">payment service provider (PSP)</a> who&#8217;s willing to partner with you and offer the payment methods you need.</li>
<li style="font-weight: 400;" aria-level="1">Assess their features like integration choices, security protocols, <a href="https://www.shift4.com/preventing-fraud" target="_blank" rel="noopener">fraud prevention</a>, and user-friendly interfaces.</li>
<li style="font-weight: 400;" aria-level="1">Make sure the PSP is compatible with your ecommerce platform for a seamless integration and smooth checkout process.</li>
<li style="font-weight: 400;" aria-level="1">Don&#8217;t overlook additional services the provider may offer, such as subscription billing, recurring payments, or cross-border payment handling.</li>
</ul>
<h3>Test and Optimize</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Set up your payment choices and check them well. Make sure each click and transaction works smoothly and is easy for users.</li>
<li style="font-weight: 400;" aria-level="1">Keep an eye on how well transactions are doing, what customers are saying, and how many sales you&#8217;re making. This helps you spot any problems or places to get better.</li>
<li style="font-weight: 400;" aria-level="1">Stay in the loop on the latest payment technology. This lets you update and grow what payment options you offer.</li>
</ul>
<h3>Provide Clear Information and Support</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Let your customers know about available payment options at various stages, including product pages, shopping carts, and checkout pages.</li>
<li style="font-weight: 400;" aria-level="1">Don&#8217;t leave your customers guessing; offer them clear instructions and guidance to complete their payments for a seamless checkout experience.</li>
<li style="font-weight: 400;" aria-level="1">Make sure to provide accessible customer support channels that can quickly address any payment-related questions or issues.</li>
</ul>
<h2>Wrapping Up: How Offering Multiple Payment Methods Boosts Your Revenue</h2>
Offering a variety of payment methods isn&#8217;t just good customer service—it&#8217;s a smart business move. When you meet your customers where they are by giving them flexible, secure payment options, you not only gain their trust but also increase your chances of higher sales and repeat business. 
By staying updated on customer preferences and emerging payment technologies, you can keep your payment solutions fresh and relevant. In the end, more payment choices mean happier customers and happier customers mean more revenue for you.

Why You Should Offer Multiple Payment Methods at Checkout

Credit card transactions are an integral part of our daily routines, facilitating everything from online shopping to bill payments. Yet, as we embrace the convenience of these transactions, we also expose ourselves to potential security threats like credit card information theft and unauthorized access. These risks can lead to not only financial losses but also emotional distress.

Dive into this blog post to discover why credit card encryption is crucial in preventing unauthorized access and mitigating financial risks.
<h2>What Is Credit Card Encryption?</h2>
Essentially, credit card encryption is  a process that converts sensitive credit card data into a code-like format that can only be decoded by authorized recipients. Credit card encryption provides an extra layer of protection so that even if the information falls into the wrong hands, it remains useless and unreadable. Think of credit card encryption as a secret language that protects our financial information from potential misuse and interception.
<h3>Encryption Process</h3>
Credit card encryption is a critical defense mechanism against data breaches and identity theft in the digital age. One powerful method is end-to-end encryption, which encrypts the cardholder data before it enters the payment terminal until it reaches its final destination, such as the bank or merchant.
<img decoding="async" loading="lazy" class="aligncenter wp-image-30165 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/11/credit-card-encryption-02-1024x576.png" alt="credit card encryption scheme" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/11/credit-card-encryption-02-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/11/credit-card-encryption-02-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/11/credit-card-encryption-02-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/11/credit-card-encryption-02-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/11/credit-card-encryption-02-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/11/credit-card-encryption-02.png 1600w" sizes="(max-width: 750px) 100vw, 750px" />
For example, when a customer makes a purchase using a credit card, the merchant&#8217;s payment processor or gateway encrypts the information. This encrypted data is then sent to the credit card network, such as Visa or Mastercard, which then sends the information to the <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">issuing bank</a> for verification. The bank then decrypts the data and approves or <a href="https://www.shift4.com/blog/credit-card-decline-codes-for-merchants" target="_blank" rel="noopener">declines</a> the transaction.
Throughout this process, credit card information remains encrypted, making it virtually impossible for hackers or cybercriminals to decode the data without the appropriate <a href="https://www.techopedia.com/definition/25403/encryption-key" target="_blank" rel="noopener">encryption keys</a>.
<h3>Card Encryption Techniques</h3>
There are different levels of credit card encryption, from basic techniques to advanced <a href="https://www.shift4.com/blog/payment-tokenization-explained" target="_blank" rel="noopener">tokenization</a>. Basic encryption uses a secret key to scramble data, while tokenization replaces transaction data with randomized, unique values, keeping sensitive information concealed.
Credit card encryption deploys robust algorithms like Advanced Encryption Standard (AES) or Rivest-Shamir-Adleman (RSA), rendering data unreadable to unauthorized parties. Card encryption techniques shield us from <a href="https://www.shift4.com/blog/protect-business-from-fraud">fraud</a> and identity theft, providing assurance when making transactions, so whether online or in-store, credit card encryption works to preserve the confidentiality of your financial information.
Credit card encryption is paramount for customer peace of mind and business trustworthiness. When shopping online or using a mobile payment app, customers can play an active role by spotting encryption cues, like SSL indicators or padlock symbols, ensuring their credit card data remains secure.
Compliance with industry standards such as the <a href="https://www.shift4.com/blog/what-is-pci-compliance" target="_blank" rel="noopener">Payment Card Industry Data Security Standard</a> (PCI DSS) is also essential in ensuring credit card data security. By being aware of these security measures, you can take control of your financial safety and ensure credit card information remains secure in the vast digital landscape.
<h2>How Credit Card Encryption Works</h2>
Credit card encryption is a critical defense against the theft of sensitive financial information, shielding it from falling into the wrong hands. This process involves converting the data on a credit card into an unreadable format using a specialized algorithm and encryption key.
One well-known approach is using EMV chips, which offer enhanced security compared to traditional magnetic stripes. These chips generate unique codes for each transaction, making the creation of counterfeit cards an uphill battle for criminals. However, it&#8217;s important to remember that encryption for EMV-enabled cards only applies to <a href="https://www.shift4.com/in-person-payments" target="_blank" rel="noopener">in-person payments</a> when the card and the payment terminal are physically present. .
The encryption procedure revolves around generating a one-time code by the EMV chip during each transaction. The credit card processor then transmits and deciphers this code, ensuring that only authorized parties can access and interpret the encrypted data. This practice significantly mitigates the risks of criminals accessing sensitive information and engaging in fraudulent activities.
As EMV chip cards replace magnetic stripe cards, encryption becomes more advanced and secure. Every transaction using a chip card is associated with a unique <a href="https://www.merriam-webster.com/dictionary/cryptogram" target="_blank" rel="noopener">cryptogram</a>, bolstering security and thwarting unauthorized actions.
Encryption is used to secure data during transit and at rest, such as during online purchases or ATM transactions. It’s like a unique tool that helps keep information safe. There are two main types of encryption:
<ul>
<li aria-level="1">Symmetric encryption, where we use a single key to lock and unlock the information</li>
<li aria-level="1">Asymmetric encryption, which employs two logically linked keys</li>
</ul>
Think of it like a lock and a key that fits perfectly. While encryption is essential for safeguarding data and meeting compliance regulations, managing encryption keys can be challenging. So, a comprehensive plan is needed to safeguard the key management system and ensure the overall effectiveness of the encryption process.
<h2>Best Practices for Implementing Credit Card Encryption</h2>
Keeping customer information secure is a top priority for businesses, especially regarding credit card details. Credit card encryption is one way to protect sensitive data from potential threats. This primary measure ensures that customer information is kept safe and secure.
A strong encryption key is crucial to this process, as it forms the foundation of the security measures. By implementing a robust encryption key, businesses can significantly enhance the security of their customer&#8217;s data and reduce the risk of unauthorized access.
Businesses looking to implement credit card encryption should follow industry best practices outlined by PCI compliance standards. These practices include conducting thorough analysis and documentation of systems, networks, and resources, implementing security policies, conducting background checks for employees handling cardholder data, and establishing a centralized cybersecurity authority. By adhering to these guidelines, businesses can improve their security and reduce the risk of data breaches.
Partnering with a PCI-compliant payment processor offering advanced <a href="https://www.shift4.com/preventing-fraud" target="_blank" rel="noopener">fraud management tools</a> is crucial for business owners. This choice guarantees the payment system meets industry standards while providing robust security features.
Another vital best practice involves prioritizing supplementary security measures like tokenization and point-to-point encryption (P2PE). Tokenization replaces sensitive credit card data with unique identification codes, rendering hackers incapable of accessing card details. On the other hand, P2PE encrypts data from capture to arrival at the payment processor, reducing the risk of interception. Including these measures in the encryption strategy further strengthens customer data protection.
Additionally, implementing extra security methods such as AVS, CVV codes, and multi-factor authentication (MFA) adds protection against fraudulent transactions. Establishing a clear refund policy and promoting payment capabilities through credit card decals and logos instill customer trust and can attract new sales.
<h2>Future Trends in Credit Card Security</h2>
As we look ahead to the future of credit card security, two key trends are expected to make a splash: quantum encryption and artificial intelligence (AI).
To stay ahead of evolving <a href="https://www.forbes.com/sites/chuckbrooks/2023/08/16/6-cyber-threat-areas-for-companies-and-organizations-to-prioritize/" target="_blank" rel="noopener">cybersecurity threats</a>, companies must utilize the top tools in their specific industry. According to Forbes, security trends include securing remote workforces, defending against ransomware attacks, and addressing quantum computing.
<h3>Quantum Encryption</h3>
Quantum encryption utilizes the principles of quantum mechanics to create unbreakable codes, ensuring that sensitive information remains secure.
Quantum computing can potentially significantly improve fraud detection in the payments industry. With their ability to process large amounts of data quickly and accurately, quantum computers can effectively detect fraud patterns.
A <a href="https://www.fraud-magazine.com/article.aspx?id=4295019616" target="_blank" rel="noopener">quantum algorithm</a> was found to be 2% more accurate than existing AI technologies in detecting credit card fraud. This finding is crucial because <a href="https://www.fintechnews.org/how-quantum-computing-is-playing-a-game-changing-role-in-fighting-credit-card-fraud/" target="_blank" rel="noopener">credit card fraud is projected to exceed $46 billion worldwide</a>. By harnessing the power of quantum computing, we can revolutionize fraud detection and significantly reduce unauthorized activity in the payments industry.
<h3>Artificial Intelligence for Threat Detection</h3>
Speaking of AI, such technologies can be utilized to monitor and prevent cyber threats by carefully analyzing patterns and identifying any suspicious activities. However, it’s essential to carefully monitor AI and machine learning use to ensure ethical use. While AI can be a powerful tool in enhancing credit card security, finding a balance between automation and human oversight is crucial.
Additionally, AI can be combined with quantum encryption to improve credit card transaction security even further. These two trends can potentially revolutionize fraud detection and enhance the overall safety of credit card transactions.
However, businesses must stay alert and implement security measures to mitigate risks. Organizations can proactively protect themselves and their customers from potential attacks by staying informed about evolving cybersecurity trends and threats.
With the right combination of quantum encryption, AI, and human oversight, we can create a future where credit card transactions are secure and fraud-free.
<h2>The Key to Financial Security: Understanding Credit Card Encryption</h2>
With increasingly digital financial transactions, credit card encryption emerges as a critical line of defense against potential data breaches and identity theft.
By understanding the underlying principles of credit card encryption and staying informed about best practices and emerging trends, individuals and businesses can confidently navigate the evolving landscape of financial security. Implementing robust encryption measures, continuous vigilance, and proactive efforts will contribute to a safer and more secure financial ecosystem for everyone.
&nbsp;

The Power of Credit Card Encryption in Safeguarding Your Finances

In the dynamic world of cross-border payments, achieving high conversions is more essential than ever. By 2024, online sales are projected to make up a significant <a href="https://on.emarketer.com/rs/867-SLG-901/images/eMarketer%20Global%20Retail%20Ecommerce%20Forecast.pdf" target="_blank" rel="noopener">21.2% of all retail sales</a>. This underscores the growing importance of international expansion for online merchants.
In this case, achieving high conversions is crucial for merchants looking to expand their reach and tap into new markets. One of the keys to unlocking this potential is localization. In this article, we&#8217;ll dive into the critical role of localization and share tips on what to expect from a <a href="https://www.shift4.com/blog/choosing-the-right-payment-provider" target="_blank" rel="noopener">Payment Service Provider (PSP)</a>.
<h2>The Power of Payment Localization</h2>
Payment localization is your secret weapon for success. It&#8217;s all about tailoring your global payment options to match the <a href="https://www.shift4.com/local-payment-methods" target="_blank" rel="noopener">local payment methods</a> of the countries and customers you serve. 
Why is this so crucial, you ask? Well, <a href="https://www.shift4.com/blog/online-payments-benefit-business" target="_blank" rel="noopener">online shoppers in new markets expect a variety of payment options</a> when they&#8217;re ready to hit that &#8220;buy&#8221; button. To make it happen, you need a solid strategy and the right infrastructure to support these local payment methods.
So, how can you bring local payment methods and currencies into the mix? The solution lies in a payments provider that allows you to effortlessly accept local payment options in multiple currencies. It will supercharge your offerings and keep costs in check. Who doesn&#8217;t love that?
We&#8217;ve been closely observing our merchants, always on the lookout for ways to elevate their payment strategy. Here is an example of one moment, where we were able to help. 
Take a look at how small adjustments can make a big difference to your bottom line:
Problem: One of our leading international eWallet merchants only offered euros (EUR) as a transaction currency, including in India, which was a new market it was trying to penetrate. Our deep analysis and industry benchmarks revealed that this approach was hindering approval rates. Issuers were declining transactions left and right, and shoppers were ghosting the payment process. The merchant was losing precious customer relationships in the process.
Solution: After our analysis, our specialized ePayments team suggested a logical solution: why not offer the local payment currency of Indian Rupees (INR)? By doing so, we predicted a significant boost in approval rates and conversions. The logic was simple: cardholders would be less likely to abandon ship. 

Outcome: Our merchant took our advice and swiftly implemented Indian Rupees as a transaction currency in India. And the results were great with a 22% increase in approval rates for all traffic from this country. So, it impacted up to $1M in monthly sales volume.
<img decoding="async" loading="lazy" class="aligncenter wp-image-30159 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/11/Cross_Border_Article-1024x576.jpg" alt="Cross-border payments" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/11/Cross_Border_Article-1024x576.jpg 1024w, https://assets.shift4.com/wp-content/uploads/2023/11/Cross_Border_Article-300x169.jpg 300w, https://assets.shift4.com/wp-content/uploads/2023/11/Cross_Border_Article-768x432.jpg 768w, https://assets.shift4.com/wp-content/uploads/2023/11/Cross_Border_Article.jpg 1281w" sizes="(max-width: 750px) 100vw, 750px" />
<h2>You Don’t Have to Support All Local Currencies</h2>
You don&#8217;t have to support every single local currency out there. Consider the markets you&#8217;re targeting. It&#8217;s all about understanding where your customers reside and what they expect from you. Let&#8217;s break it down.
For instance, if you&#8217;re not actively serving customers in or from China, there&#8217;s no need to dive into the details of UnionPay, Alipay, and WeChat Pay. On the other hand, if you&#8217;re a European merchant eyeing the Netherlands or Germany, you definitely don&#8217;t want to miss out on direct debits like SEPA or iDeal. By offering your customers their preferred payment methods, you&#8217;ll unlock <a href="https://www.shift4.com/revenue-optimization" target="_blank" rel="noopener">revenue optimization</a> opportunities. It&#8217;s a win-win!
To get started, ask yourself these key questions:
<ul>
<li style="font-weight: 400;" aria-level="1">What language do your customers speak?</li>
<li style="font-weight: 400;" aria-level="1">Which currency do they use?</li>
<li style="font-weight: 400;" aria-level="1">What payment methods do they prefer?</li>
<li style="font-weight: 400;" aria-level="1">What regulations govern their specific country?</li>
</ul>
Now, you might be thinking, &#8220;that&#8217;s a lot to handle!&#8221; We hear you, and that&#8217;s exactly why PSPs exist — to be your guiding light through the payment localization process. However, it&#8217;s crucial to ensure that your chosen PSP has the necessary data and expertise to analyze your business and provide advice based on industry benchmarks.
<h2>Localization Strategy: What to Expect from a PSP?</h2>
PSPs are here to assist in facilitating <a href="https://www.shift4.com/online-payments" target="_blank" rel="noopener">online payments</a> and streamlining your payment process. They understand that every business is unique, which is why they tailor the entire payment experience to fit your specific dynamics and cater to your customer’s preferences. 
That means supporting local payment methods, accommodating various languages, and seamlessly handling multiple currencies. With their expertise by your side, you can confidently expand your international presence and simplify the way you do business in new markets.
But that&#8217;s not all. A good PSP is your partner in optimizing the checkout process to boost conversions. They know the tricks of the trade and can guide you on enhancing your checkout flow, reducing friction, and delighting your customers every step of the way. It&#8217;s all about maximizing conversions and boosting your bottom line.
And let&#8217;s not forget about compliance! Operating in multiple markets means you need to stay on top of the regulations and compliance requirements in each one. Lucky for you, a reliable PSP will have your back, ensuring you remain fully compliant in every market you operate in. It&#8217;s a weight off your shoulders, allowing you to focus on what you do best — growing your business.
<h2>Your Localization Strategy Matters</h2>
As online shopping continues to claim a larger slice of the retail pie, getting your localization right is key to unlocking more transactions and higher conversions.
We&#8217;ve walked you through various strategies—from knowing what payment options resonate with local customers to leveraging the know-how of a PSP. These practical tips set you on a course to master cross-border payment methods, keep your customers happy, and elevate your business.
If you&#8217;re ready to increase your conversions and take your global payment game to new heights, look no further. Connect with us today and let&#8217;s explore how we can transform your business with our online payments solutions.

Mastering Cross-Border Payments: Localization Strategy

Without a doubt, chargebacks are a thorn in the side of every merchant.They can lead to significant financial losses, making it essential to take proactive steps to prevent them and protect your revenue. 
Fortunately, with the right strategies, merchants can safeguard their businesses and maintain a healthy bottom line.
This article provides a comprehensive list of the most common mistakes merchants should avoid when fighting chargebacks and offers practical solutions that you can implement immediately.
<h2>What Is a Chargeback?</h2>
Before we dive in, let&#8217;s start with a quick refresher about <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargebacks</a>. In brief, a chargeback is a form of customer protection. It&#8217;s a guarantee that when a transaction is recognized as fraudulent, the bank will refund the disputed transaction value to the cardholder. 
Even though errors caused by merchants are not the only reason for chargebacks, they constitute a significant part of disputes. 
Therefore, it&#8217;s advisable to learn what merchants can do when a customer disputes a charge and what mistakes to avoid when <a href="https://www.shift4.com/blog/cut-back-chargebacks" target="_blank" rel="noopener">fighting chargebacks</a>. 
So, what are the most frequent missteps merchants take? 
<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-29983" src="https://assets.shift4.com/wp-content/uploads/2023/10/chargebacks-mistakes-02.png" alt="" width="1600" height="900" srcset="https://assets.shift4.com/wp-content/uploads/2023/10/chargebacks-mistakes-02.png 1600w, https://assets.shift4.com/wp-content/uploads/2023/10/chargebacks-mistakes-02-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/10/chargebacks-mistakes-02-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/10/chargebacks-mistakes-02-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/10/chargebacks-mistakes-02-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/10/chargebacks-mistakes-02-1568x882.png 1568w" sizes="(max-width: 1600px) 100vw, 1600px" />
<h2>Mistake #1: Incorrect Reason Codes </h2>
Even though chargebacks are a means  for customer protection, merchants have the right to fight every dispute. They should do it whenever they can prove the disputed transaction was legitimate.
Yet, to increase the chances of winning the dispute, merchants must be aware of chargeback reason codes (also known as dispute codes). 
Why is it so important? 
The purpose of the reason code is to categorize the chargeback, identify the customer&#8217;s reason for disputing it, and determine the specific evidence that a merchant must provide if they want to challenge the customer&#8217;s dispute. 
Understanding reason codes is essential when fighting chargebacks because each code has evidence-collection requirements. Merchants who understand  reason codes can better prepare for dealing with chargebacks. 
<h3>Good Practice for Merchants: </h3>
Keep a list of required compelling evidence close at hand to increase your chances of winning a dispute.
<h2>Mistake #2: Superficial Evidence Review </h2>
To increase your chances of  a successful outcome, it&#8217;s obligatory for merchants to meticulously scrutinize all proof before presenting them as evidence, act promptly, and not postpone the submission of documentation. 
When preparing to dispute chargebacks, merchants must track the customer&#8217;s activity, analyze their behavior, and keep logs in the system to avoid unwanted surprises. They should also make sure that everything is adequately documented.
You should review documents as soon as a chargeback is initiated and promptly gather and submit all the necessary evidence. 
It&#8217;s also wise to double-check all provided proof before sending the evidence and try to consolidate the  documentation into a single PDF file to simplify the process.
<h3>Good Practice for Merchants: </h3>
Double-check all the evidence. Make it clear and structured to increase the chances of success in fighting chargebacks.
<h2>Mistake #3: Doing Nothing With the Dispute</h2>
While fighting every chargeback claim might not be the best move, ignoring chargeback disputes altogether is not recommended either. 
It is vital to scrutinize each chargeback to determine which ones are disputable. Pursuing the chargeback representment process can result in substantial savings in some situations, making it worthwhile. 
Doing nothing will result in money loss in every single case. By conducting thorough analyses of every claim, we can identify which ones are worth fighting and take the necessary steps to recover the losses.
<h3>Good Practice for Merchants: </h3>
Always stay vigilant with your business and take proactive steps to recover as much of your money as possible.
<h2>Mistake #4: Merchant &amp; Customer Communication Issues  </h2>
Although chargebacks are supposed to protect the customer, cardholders sometimes overuse them. They may file chargebacks when they can&#8217;t recognize a purchase, feel misled by the product description, or need help finding the return policy on the merchant&#8217;s website. 

Even though the issues listed above may appear vastly different, they all have one common root cause: communication breakdowns on the merchant&#8217;s end — the effect of which can damage the business and result in loss of revenue and the merchant&#8217;s frustration. 
Preventing these issues may seem daunting, but clear and timely communication is the key. 
Merchants can significantly lower the incidence of chargebacks by keeping their customers updated on their purchase status, making their account information and payment options easily accessible, offering smooth payment processes, and taking care of details such as <a href="https://www.shift4.com/blog/transaction-descriptors-in-brief" target="_blank" rel="noopener">transaction descriptors</a> or return policies.
Top-notch customer service is another powerful way of mitigating chargebacks. Customers often try to contact the merchant before filing a chargeback. If their issues are quickly addressed, there&#8217;s a chance to avoid an unnecessary chargeback. 
Therefore, merchants must stay alert to address such scenarios effectively since being proactive is the key to safeguarding their reputation and ensuring customer satisfaction.
In certain instances, it&#8217;s worth considering giving a refund instead of dealing with a future chargeback.
<h3>Good Practice for Merchants: </h3>
Stay in touch with your customers throughout the entire sales process. Keep contact information visible on your website and checkout page.
<h2>Mistake #5: Saving on Fraud Prevention Solutions </h2>
Investing in a <a href="https://www.shift4.com/blog/protect-business-from-fraud" target="_blank" rel="noopener">fraud prevention solution</a> allows merchants to focus on their core business responsibilities, free their chargeback team from manual analysis, and most importantly, safeguard their business and customers. 
Prevention is always better than a cure. It pays off to take the time to explore and choose the perfect fraud solution so you can minimize potential chargebacks. 
The great thing is that merchants don&#8217;t need to break the bank to ensure their business’s security. Instead, they can choose a reliable <a href="https://www.shift4.com/blog/what-is-a-payment-processor" target="_blank" rel="noopener">payment processor</a> offering <a href="https://www.shift4.com/preventing-fraud" target="_blank" rel="noopener">anti-fraud tools</a> and a well-designed chargeback process. 
With the right resources, process, and technology partner fighting chargebacks could be a smooth ride.
<h3>Good Practice for Merchants: </h3>
Choose a security-driven payment provider offering a range of best-in-class anti-fraud tools that enables you to eliminate the threat and possible losses.  
<h2>Mistake #6: Inaccurate Transaction Monitoring</h2>
Maintaining comprehensive records of all transactions is crucial when fighting chargebacks. Merchants must collect customer and purchase information and screenshots or receipts of the item purchased. That might be further evidence that the customer bought or received their item.
Customer communication should occur via email, along with  all relevant receipts, notices, and paperwork.
When facing a chargeback dispute, merchants might be required to provide a signed delivery slip, <a href="https://www.shift4.com/blog/why-card-security-codes-matter-online-shopping" target="_blank" rel="noopener">CVV verification</a>, and emails exchanged between them and the cardholder. 
Establishing a well-organized filing system to store this information for effortless retrieval is advisable.
<h3>Good Practice for Merchants: </h3>
Hope for the best, and prepare for the worst. Collect any information that may help you prove the chargeback isn&#8217;t legitimate.  
<h2>Mistake #7: Metrics Monitoring Negligence  </h2>
Monitoring chargeback metrics is critical to achieving success on a larger scale. Not only does it affect the business results, but it also incurs higher fees, penalties, or labeling as a high-risk business. 
Any abnormalities in the fraud rate should immediately raise a red flag and alert merchants since it likely resulted directly from fraudulent activity on the website. 
When the fraud rate suddenly grows, merchants may suspect it&#8217;s a consequence of the customers&#8217; account takeover attack, stolen card testing, or any other type of cyberattack.  
Therefore, card companies strongly encourage businesses to monitor their fraud rate closely and take necessary measures to keep it under control. Otherwise, they will face the fee. 
Apart from the fraud rate, merchants should control their win/loss rates to be proactive and prevent severe business consequences. 
<h3>Good Practice for Merchants: </h3>
Stay sharp with your <a href="https://www.shift4.com/business-intelligence" target="_blank" rel="noopener">business intelligence</a>, know your metrics, and be ready to take necessary action before the real problem appears.
<h2>Mistake #8: Ignoring Red Flags</h2>
One of the biggest mistakes merchants can make is ignoring or disregarding so-called red flags. 
Staying alert and aware of any warning signs indicating fraudulent activity, such as repeated chargebacks or suspicious transactions, is vital. 
It is imperative to meticulously track all payments, maintain detailed transaction records, and consistently monitor any suspicious activity or trends related to chargeback fraud. 
Merchants must take proactive steps to review payment analytics regularly to identify patterns that may indicate an increase in dispute frequency or commonly reported reasons and stay up-to-date on all chargeback reason codes. 
By identifying red flags and chargeback fraud patterns early on, businesses can adjust their fraud prevention tactics and solutions accordingly to mitigate the risk of future occurrences effectively. 
<h3>Good Practice for Merchants: </h3>
Stay alert and investigate every fraudulent activity, as it helps to identify and eliminate eventual shortcomings in the anti-fraud system.
<h2>Take a Proactive Approach to Fighting Chargebacks</h2>
Fighting chargebacks is a highly challenging and costly procedure that can severely impact the business. However, giving up on fighting chargebacks is never a wise choice. 
While it&#8217;s not easy to win a dispute, if the merchant doesn&#8217;t try, they&#8217;ll never win.
For this reason, merchants should implement effective tactics, utilize suitable software, cooperate with top-class, security-oriented payment processors, and avoid the mistakes listed above. 
Though it&#8217;s impossible to alleviate this burden entirely, the chances of winning a dispute will fire up.

Common Mistakes Merchants Make When Fighting Chargebacks

As the world becomes increasingly digital, businesses are rapidly shifting towards online platforms to cater to their customers&#8217; needs. One crucial aspect of this transition is setting up an online merchant account. In this blog post, we will guide you through the essential considerations and list down the expectations you should have when establishing an online merchant account for your business.
<h2>What Is a Merchant Account?</h2>
When customers pay for your goods or services online, the funds are processed by your chosen payment platform and then transferred to your merchant account. This account collects and holds the funds until the settlement date. While you may not have immediate access to the funds in this account, they will be deposited into your business account at a predetermined interval, usually once a week.
Only merchant accounts can collect payments using popular debit and credit cards such as Visa, Mastercard, or American Express. Every merchant gets a unique merchant ID (MID) after successfully applying for a merchant account. The payment processors, in partnership with an <a href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener">acquiring bank</a>, provide these MIDs.
<h2>How Does a Merchant Account Work?</h2>
When a customer pays online, the payment request is sent from the payment page to the merchant&#8217;s acquiring bank via an integrated payment system. Then, the acquirer transmits the request to the customer’s <a href="https://www.shift4.com/blog/what-is-an-issuing-bank/" target="_blank" rel="noopener">issuing bank</a>. If the customer has enough funds in their account, the transaction is authorized, and the funds are transferred to the merchant&#8217;s account.
If the customer&#8217;s account lacks sufficient funds, or if the issuing bank <a href="https://www.shift4.com/blog/credit-card-decline-codes-for-merchants/">declines</a> the transaction for any other reason, the payment process parties are informed about the unsuccessful request.
<h2>Getting Started</h2>
It’s important to conduct comprehensive research when choosing a merchant account provider, as this choice can impact the success of your business. Look for companies with a stable market position and years of experience offering cutting-edge technology and attentive customer service.
Select an online merchant account provider that offers the necessary features and integrations for your specific business model, as not all providers are compatible with every type of business.
When selecting a payment provider, choose one that prioritizes PCI compliance to protect your customers&#8217; payment information. This security measure will prevent you from undergoing a lengthy PCI compliance review.
And lastly, consider providers that specialize in online payment processing and offer competitive rates.
<h2>Understanding the Fees and Requirements</h2>
Before signing up for an online merchant account, it’s essential to understand the fees and requirements associated with this type of account.
Merchant account providers typically charge a processing fee for each transaction, ranging from 2-5% of the sale amount. They may also charge a setup and  monthly fee, while some providers may require a minimum transaction volume or credit score.
<h2>Getting an Online Merchant Account</h2>
After selecting a provider and collecting the necessary documents, you may proceed with the application process. This process typically requires completing an online application and supplying your business information, such as your website and payment processing requirements. Ensure that you answer all inquiries truthfully and precisely.
You can do this online, which is convenient and takes roughly 10 minutes if you have all the required documents. If you choose the right payment provider, they will help you complete the entire process and set up your account.
<img decoding="async" loading="lazy" class="aligncenter wp-image-29939 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/10/online-merchant-account-01-1024x576.png" alt="credit card payment" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/10/online-merchant-account-01-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/10/online-merchant-account-01-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/10/online-merchant-account-01-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/10/online-merchant-account-01-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/10/online-merchant-account-01-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/10/online-merchant-account-01.png 1600w" sizes="(max-width: 750px) 100vw, 750px" />
Businesses often ask how long it will take to complete their online merchant account application. Unfortunately, there is no definitive answer as it varies depending on the provider&#8217;s policies and the complexity of the application. Typically, it will take a few days to a few weeks.
It&#8217;s important to note that underwriters often work during standard banking hours, which means the timing of the application is critical. It&#8217;s best to plan ahead to ensure a smoother and quicker process.
<h2>Preparing for the Underwriting Process</h2>
Your website will be pre-approved for <a href="https://www.shift4.com/blog/website-compliance-requirements-for-merchants/" target="_blank" rel="noopener">compliance requirements</a>. In most cases, you&#8217;ll only need to provide a working URL, and in the meantime, you can start collecting all the necessary documents, including:
<ul>
<li aria-level="1">Proof of incorporation (company name, registration number, address)</li>
<li aria-level="1">Phone number of the primary owner</li>
<li aria-level="1">Certificate of directors or current appointment report (information about the top management of your company)</li>
<li aria-level="1">Shareholder certificate or annual report</li>
<li aria-level="1">Management credentials (i.e., a photo of the director’s passport, a utility bill, etc.)</li>
<li aria-level="1">Proof of business ownership</li>
<li aria-level="1">Current processing history for the last six months, if applicable</li>
<li aria-level="1">Business bank account and bank letter</li>
</ul>
Also, provide a brief overview of your business model and the products or services you plan to offer. A reliable payment platform can assist you in preparing and securely submitting your application to the relevant acquiring bank.
<h2>Waiting For Approval</h2>
Once you submit the required documentation, you will proceed to the underwriting process, where the processor or acquirer will assess the level of risk involved. The underwriting procedure may vary depending on the specific guidelines of the bank. Since banks and payment processors take a risk by opening a merchant account, they conduct a thorough investigation of the company you represent.
It would help if you also prepare to supply supporting documentation, typically dependent on processing volume or when you begin accepting payments. The underwriter will need proof that your business is currently operational.
If everything checks out, you will receive your bank and gateway agreements. You must thoroughly read through the terms and conditions of your merchant application before signing any contracts. Be sure to check for hidden costs or potential issues with contract termination. Once you have signed the agreements, your merchant account is active.
<h2>Setting Up Payments on Your Website</h2>
In the meantime, you can start the integration process. If you’d like to process payments through Shift4, go to the <a href="https://dev.shift4.com/docs" target="_blank" rel="noopener">documentation</a> section. If you have any queries, you can check our <a href="https://dev.shift4.com/knowledge-base" target="_blank" rel="noopener">knowledge base</a> resources or get assistance from technical support.
We recommend testing the system before transitioning to &#8220;live mode&#8221; to ensure everything works correctly. Therefore, it is better to opt for solutions with a sandbox mode, enabling you to view the entire payment process using testing credentials.
<h2>Key Takeaways</h2>
Getting an online merchant account is essential for any business that wants to accept online payments. By researching providers, understanding fees and requirements, gathering the necessary documentation, completing the application, and waiting for approval, you can obtain an online merchant account and start accepting payments quickly and easily. Choose a provider that suits your business&#8217;s needs and offers competitive rates.
<ul>
<li aria-level="1">Do your research to ensure you get the best deal, as different providers may have different fees, features, and contract terms.</li>
<li aria-level="1">Find a merchant account provider that takes PCI compliance seriously.</li>
<li aria-level="1">Prepare your website. Make sure it stays in line with website compliance requirements.</li>
<li aria-level="1">Plan. Gather all required documents before submitting your application. This typically includes a copy of your business license, proof of identity, and a voided check or bank statement. Some providers may also require financial statements or tax returns.</li>
<li aria-level="1">Test the payment flow before going live.</li>
</ul>

How Do I Set Up an Online Merchant Account for My Business?

In today&#8217;s complex business landscape, choosing a reliable payment provider to ensure a seamless and secure payment process is essential for customer satisfaction, operational efficiency, and overall business growth. 
However, with numerous payment gateway options available, each offering a range of features, pricing structures, and security measures, making the right choice takes a lot of time and effort.
In this article, we will delve into the key factors merchants should consider making well-thought-out decisions aligning with their unique business requirements and goals.
<h2>Why Do Merchants Look for a Payment Provider? </h2>
Some individuals starting a new business might be looking for a payment provider for the first time. Others may already have some experience with online payments, but the experience could have been better, so they decide to shop around. 
However, the number of card processing companies operating on the market can be overwhelming and make the decision process challenging. Therefore, thorough preparation and in-depth analysis are crucial. 
Not only do merchants need to analyze their business needs, but they also need to consider security and <a href="https://www.shift4.com/blog/protect-business-from-fraud" target="_blank" rel="noopener">fraud prevention</a> features provided by the payment gateway as well as its compliance, fees, ease of integration, overall user experience, and much more. 
It might seem irrelevant, but even the location of where the company is registered may also impact the selection of payment providers a merchant can choose from. For example, this may happen when a provider doesn’t support certain security features required by law in a particular country. 
Let’s get into details on how to set the boundary parameters. 
<img decoding="async" loading="lazy" class="aligncenter wp-image-29906 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/09/choosing-the-right-payments-provider-02-4-1024x338.png" alt="" width="750" height="248" srcset="https://assets.shift4.com/wp-content/uploads/2023/09/choosing-the-right-payments-provider-02-4-1024x338.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/09/choosing-the-right-payments-provider-02-4-300x99.png 300w, https://assets.shift4.com/wp-content/uploads/2023/09/choosing-the-right-payments-provider-02-4-768x253.png 768w, https://assets.shift4.com/wp-content/uploads/2023/09/choosing-the-right-payments-provider-02-4-1536x506.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/09/choosing-the-right-payments-provider-02-4-2048x675.png 2048w, https://assets.shift4.com/wp-content/uploads/2023/09/choosing-the-right-payments-provider-02-4-1568x517.png 1568w" sizes="(max-width: 750px) 100vw, 750px" />
<h2>Step-by-Step Guide for Merchants</h2>
<h3>1. Assessing Business Needs </h3>
Before diving into the sea of payment providers, it is essential to understand a business&#8217;s unique payment processing requirements. 
When looking for a payment gateway, merchants should consider the following factors:
<ol>
<li>Transaction Volume and Frequency: It&#8217;s essential to determine the average number and value of transactions the business handles daily, monthly, annually, and the projected figures for upcoming years. Based on this data, assessing whether the payment provider can accommodate both current and forecasted transaction volume without compromising performance or incurring excessive costs is necessary. 
</li>
<li>Target Market and Customer Preferences: A business&#8217;s geographic reach and the target audience&#8217;s preferences may significantly impact the final choice. The payment gateway must support the specific local payment methods most commonly used by their customers in a specific region. These should cover not only credit cards or mobile payments but also locally-specific alternative payment methods. 
</li>
<li>Integration With Existing Systems: Evaluating the compatibility of the potential payment provider with the merchant’s existing systems is a must. The ease of integration, <a href="https://dev.shift4.com/docs/api" target="_blank" rel="noopener">full API reference</a>, or developer support to streamline the implementation process cannot be underestimated.</li>
</ol>
<h3>2. Security and Compliance </h3>
Without a doubt, payment security should be a top priority at all times for every business. And its importance grows even more when a new business partner is chosen. In these situations, you should review the following aspects:
<ol>
<li style="font-weight: 400;" aria-level="1">PCI Compliance: Ensuring the payment provider is <a href="https://www.shift4.com/blog/what-is-pci-compliance" target="_blank" rel="noopener">PCI DSS compliant</a> guarantees that the necessary security standards for processing, transmitting, and storing sensitive cardholder information have been implemented. 
</li>
<li style="font-weight: 400;" aria-level="1">Tokenization and Encryption: <a href="https://www.shift4.com/blog/payment-tokenization-explained" target="_blank" rel="noopener">Tokenization </a>replaces sensitive card data with unique tokens, thus reducing the risk of data breaches. Encryption ensures secure transmission of customer data over the internet, protecting it from unauthorized access and eliminating the risk of fraud. 
Merchants should ask payment providers about data encryption, Verisign SSL certificates and <a href="https://www.shift4.com/blog/why-card-security-codes-matter-online-shopping" target="_blank" rel="noopener">CVV2</a> verification, and any additional encryption algorithms ensuring enhanced data protection. 
</li>
<li style="font-weight: 400;" aria-level="1">Fraud prevention: Robust, AI-based anti-fraud solutions protect businesses and their customers from unauthorized transactions and fraudulent activities, reducing the number of <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargebacks</a>. </li>
</ol>
Digital security is no longer a hot topic but an absolute must for online payments. 
It is not only about the safety of the merchant account but also about the safety of their clients and payment-related sensitive information.
<h3>3. Pricing and Cost Optimization</h3>
Payment provider pricing structures and associated costs can significantly impact a business’ bottom line. Therefore, getting familiar with them before making the final decision is essential. Merchants must know in advance and, even more crucial, understand the entire fee structure. 
The fee structure should be transparent and easy to understand, since there is no room for surprises or a lack of trust when money is involved. 
It&#8217;s essential to ensure that no small print notes apply, especially since it still happens that some payment gateways charge additional fees for certain services, or the displayed parameters apply provided certain conditions are met, such as the minimum volume required or limited currency options.
The best advice for merchants is to ask. And then ask again, if necessary, until everything is clear. 
A reliable payment provider should be able to enlist all the costs the merchant might encounter while using their service, including:
<ul>
<li style="font-weight: 400;" aria-level="1">Setup fees</li>
<li style="font-weight: 400;" aria-level="1">Monthly fees</li>
<li style="font-weight: 400;" aria-level="1">Registration fees</li>
<li style="font-weight: 400;" aria-level="1">Processing fees</li>
<li style="font-weight: 400;" aria-level="1">Transaction fees (successful and declined)</li>
<li style="font-weight: 400;" aria-level="1">Refund fees</li>
<li style="font-weight: 400;" aria-level="1">Chargeback fees</li>
<li style="font-weight: 400;" aria-level="1">Reserves</li>
<li style="font-weight: 400;" aria-level="1">Any other fees merchants may be subjected to based on different business scenarios</li>
</ul>
Careful revision of the payment provider&#8217;s terms and conditions is the only correct approach to finding a trustworthy partner. 
<h3>4. Integration and User Experience</h3>
A seamless payment experience is critical to increasing customer satisfaction and maximizing conversions. Here’s what to pay attention to when evaluating payment providers: 
<ol>
<li style="font-weight: 400;" aria-level="1">Variety of Integration Options: Payment gateways should offer various integration options to suit different businesses&#8217; needs, including APIs, plugins, custom integrations, or even user-friendly integration solutions that can be implemented without extensive coding knowledge.</li>
<li style="font-weight: 400;" aria-level="1">Developer Support and Documentation: The quality and availability of support affect the comfort of business relations from the beginning. 
Comprehensive documentation, including API reference guides, <a href="https://dev.shift4.com/examples" target="_blank" rel="noopener">integration examples</a>, and code snippets — combined with prompt and knowledgeable developer support — can significantly streamline the integration process.</li>
<li style="font-weight: 400;" aria-level="1">Processing Options: This is where the magic happens. The payment form design is more important than it is credited with. Not only can it determine the conversion rate, but it also impacts customer confidence in the business. 
Before deciding on the payment processor, merchants must check if it offers embedded card components to keep users constantly on the website (no-redirection options result in significantly higher conversion). 
A frictionless checkout option will dramatically influence the user experience, simplify the entire user flow, and make payments fast and easy (a simple and perfect solution for one-time and recurring payments). 
The innovative payment provider will offer a wide range of features designed to increase sales and profits such as multi-language checkout, one-click upsells, cross-sales, or &#8220;remember me&#8221; function allowing returning clients to pay with a single click.</li>
<li style="font-weight: 400;" aria-level="1">Customization and Branding: A consistent and branded checkout experience undoubtedly reinforces trust and enhances the user experience. The ability to customize the checkout page with the logo, color scheme, and other branding elements should also be on the merchant&#8217;s must-have list. This feature set is standard practice at Shift4 since we offer our merchants easy-to-implement yet robust and flexible customization options, delivering the perfect solution for any business model. To help merchants make an informed decision, we offer a risk-free opportunity to <a href="https://dev.shift4.com/signup" target="_blank" rel="noopener">sign up and test our amazing services for free</a>!  </li>
<li style="font-weight: 400;" aria-level="1">Mobile-Friendly Solutions: With the increasing use of mobile devices for online transactions, a seamless mobile experience is beyond discussion. Therefore, merchants must check if the payment processor offers responsive payment pages or mobile software development kits (SDKs) for easy integration into mobile applications</li>
<li style="font-weight: 400;" aria-level="1">User-Friendly Interface: The user interface (UI) of the payment provider&#8217;s dashboard or admin portal will tell all about the payment gateway&#8217;s approach toward user experience. 
A user-friendly interface with intuitive navigation makes managing transactions, viewing reports, and performing other essential tasks easier. These features simplify day-to-day operations and enable merchants to monitor and analyze payment data effectively.</li>
<li style="font-weight: 400;" aria-level="1">Multi-Channel Support: Merchants whose business operates across multiple channels — such as <a href="https://www.shift4.com/online-payments" target="_blank" rel="noopener">online</a>, <a href="https://www.shift4.com/in-person-payments" target="_blank" rel="noopener">in-store</a>, and <a href="https://www.shift4.com/skytab-mobile" target="_blank" rel="noopener">mobile</a> — should choose a payment provider that offers seamless integration and support across all channels. </li>
</ol>
<h2>Finding a Reliable Payment Provider Pays Off </h2>
Without a doubt, selecting the right payment provider can significantly increase customer trust and satisfaction, simplify transactions, and stimulate business growth in the competitive digital landscape.
Yet, like in every business, there are some traps to avoid and things to look particularly at to ensure the quest for finding the right payment partner will pay off. 
By carefully assessing specific business needs, security features, pricing schemes, integration options, and user experience offered by payment providers, merchants can choose a real business partner that seamlessly aligns with their business goals and enhances customer satisfaction.

Choosing the Right Payment Provider: A Guide for Merchants

Although the entire payment process takes seconds, various entities work behind the scenes to make this process work seamlessly for a frictionless customer experience. 
Let&#8217;s dive deeper to better understand the roles and responsibilities of payment processors in the checkout process.   
<h2>What Is a Payment Processor?</h2>
A payment processor — or a payment service provider — is a company or financial institution responsible for handling the logistics of a credit card transaction. 
These entities get credit or debit card information and transfer it to the <a href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener">acquiring bank</a> and the customer&#8217;s bank. When the customer&#8217;s account contains sufficient funds, the transaction gets approved.
Apart from transferring money, the payment processor is also responsible for checking whether the customer&#8217;s data is correct and keeping the process secure by analyzing <a href="https://www.shift4.com/blog/protect-business-from-fraud" target="_blank" rel="noopener">fraud possibilities</a>. In a way, the payment processor works as a mediator between the bank and the merchant. 
A payment processor&#8217;s primary role is to verify with the customer&#8217;s card <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">issuing bank</a> or card association, determine whether the card details are correct, and perform anti-fraud measures to safeguard the transaction.
In addition to those responsibilities, payment processing companies can help businesses get their merchant accounts. And, if necessary, when a customer disputes a transaction, a payment processor is often the party that helps the merchant resolve it — a service that may come at an extra fee. Merchants should keep in mind that payment processors charge a fee for each transaction , an interchange fee, and also <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargeback</a> fees. 
If a business prioritizes pricing when selecting a payment processor, it’s important to carefully review the terms of service to understand what is included with their costs. This could help to avoid costly unexpected fees in the future.
<h2>Payment Processing at a Glance</h2>
Before we delve deeper into the process itself, let’s explore the various parties involved in payment processing.
Apart from the obvious — a payment processor working behind the scenes — several other players are involved, including:
<ul>
<li style="font-weight: 400;" aria-level="1">Customer (who enters the card data)</li>
<li style="font-weight: 400;" aria-level="1">Merchant</li>
<li style="font-weight: 400;" aria-level="1">Payment processor</li>
<li style="font-weight: 400;" aria-level="1">Payment gateway (typically operated by a payment service provider)</li>
<li style="font-weight: 400;" aria-level="1">Customer&#8217;s bank or credit card company (the issuer)</li>
<li style="font-weight: 400;" aria-level="1">Merchant&#8217;s bank (the acquirer)</li>
</ul>
While the payment gateway is responsible for the transfer, the payment processor&#8217;s role is to authenticate and secure the transaction. As mentioned above, a payment processor verifies whether the payment data entered by the customer is correct. 
<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-29936" src="https://assets.shift4.com/wp-content/uploads/2023/10/S4-InContent-What-Is-a-Payment-Processor-and-Why-Do-You-Need-One-2.jpg" alt="" width="651" height="355" srcset="https://assets.shift4.com/wp-content/uploads/2023/10/S4-InContent-What-Is-a-Payment-Processor-and-Why-Do-You-Need-One-2.jpg 651w, https://assets.shift4.com/wp-content/uploads/2023/10/S4-InContent-What-Is-a-Payment-Processor-and-Why-Do-You-Need-One-2-300x164.jpg 300w" sizes="(max-width: 651px) 100vw, 651px" />
The entire operation usually takes up to just a few seconds and includes the following phases:
<ol>
<li style="font-weight: 400;" aria-level="1">The customer enters their card information on the merchant’s website, at a terminal in a store, or through any other payment method where card data is being used. The card data is submitted through the payment gateway.</li>
<li style="font-weight: 400;" aria-level="1">The payment gateway encrypts and sends the collected information to the payment processor.</li>
<li style="font-weight: 400;" aria-level="1">The payment processor sends the authorization request to the acquiring bank, which redirects the information to the card network (Visa, Mastercard, American Express, or others) for their approval.</li>
<li style="font-weight: 400;" aria-level="1">The transaction details are then forwarded to the issuing bank. The issuer thoroughly examines the customer&#8217;s account status, available balance, or credit limit and approves or declines the transaction.</li>
<li style="font-weight: 400;" aria-level="1">Once receiving the authorization response from the issuing bank, the card network returns through the acquiring bank to the payment processor with the information indicating whether or not the payment request is approved.</li>
<li style="font-weight: 400;" aria-level="1">If approved, the merchant finalizes the transaction initiated by the customer. If the transaction is declined, the merchant can ask the customer to use an alternative payment method.</li>
<li style="font-weight: 400;" aria-level="1">For approved transactions, the payment processor informs the issuing bank (the one that issued the customer’s card) that the funds can be sent to the acquiring (merchant’s) bank as soon as the transaction is complete.</li>
<li style="font-weight: 400;" aria-level="1">Depending on the payment provider, the account type, and the payment method chosen, the merchant receives funds immediately or within a few business days.</li>
</ol>
Sometimes a transaction is declined. In this scenario, the merchant receives a <a href="https://www.shift4.com/blog/credit-card-decline-codes-for-merchants" target="_blank" rel="noopener">decline code</a> so they know the reason for the cancellation. 
It’s important to know that not every transaction decline results from a lack of funds or criminal <a href="https://www.shift4.com/blog/protect-business-from-fraud" target="_blank" rel="noopener">fraud</a>. Some declines may result from system errors, the card itself, or communication errors between banks and processors. 
<h2>How to Start Working With a Payment Processor</h2>
Before merchants choose the payment processor they want to work with, they must consider several aspects to ensure it meets their business needs. 
We suggest starting with the following:  
<ul>
<li aria-level="1">Accepted Business Models: It&#8217;s not surprising that this is first on the list. It&#8217;s highly recommended that merchants ensure that the credit card processor they choose offers solutions for the industries their company operates in before they apply for a merchant account. The same goes for countries and payment cards.</li>
<li aria-level="1">Technology: To have full control over the setup and payment process, merchants (especially online merchants) should search for a payment processor offering application programming interfaces (APIs). They must ensure that the payment processor provides the latest technology, know-how, and procedures for fast onboarding and painless payment flow without downtime or surprises. 
 
Merchants interested in multiple accounts should check if this option is available. The same applies to the possibility of implementing various scenarios that align with their business needs, which can be critical — especially for complex business models. 
It&#8217;s advisable to check if the online payment form feature offered by the payment processor is fully customizable and if the payment processor provides all the features necessary to offer customers a flawless experience. 
 
From the technical point of view, it is possible to work with different entities and benefit from a merchant account, a payment gateway, and payment processing provided separately. However — for optimization purposes — it&#8217;s better to work with a single provider that offers an all-in-one solution like <a style="background-color: var(--global--color-background); font-family: var(--global--font-secondary); font-size: var(--global--font-size-base);" href="https://www.shift4.com" target="_blank" rel="noopener">Shift4</a>. As a result, many payment processing complexities can be avoided.</li>
<li aria-level="1">Security: It’s key to find a payment processing provider that adheres to strict security rules and provides a set of anti-fraud tools to protect a merchant&#8217;s business. A payment processor that offers a multi-layered approach to security will help reduce suspicious activity and deliver a decent <a href="https://www.shift4.com/blog/cut-back-chargebacks" target="_blank" rel="noopener">chargeback prevention</a> system.</li>
<li aria-level="1">Expertise: Since merchants entrust their money to the payment provider, it is highly recommended to do some research before signing a final agreement. Merchants must be sure that the expertise and know-how they pay for are exactly what they need and expect.</li>
<li aria-level="1">Transparent Pricing: Without a doubt, merchants have the right to understand pricing before they sign a contract with a payment processor. They must be sure that the fee structure is clear and that there aren’t any hidden or extra fees.</li>
<li aria-level="1">Customer Support: Responsive customer support that will help merchants quickly resolve payment issues is a necessity. After all, it&#8217;s about the customers&#8217; money and the merchants’ business reputation. Merchants should select a payment process that will address every problem quickly and professionally.</li>
</ul>
<h2>Secure Payment Processing is Key to Business Growth</h2>
A reliable payment provider can make merchants&#8217; lives easier as it takes on the responsibilities of securing and carrying out transactions, thus helping businesses grow. 
For this reason, finding a proper business partner should be preceded by an in-depth topic analysis — regardless of whether the merchant applies for a payment processor through a bank or a provider&#8217;s website. 
Without question, it&#8217;s better to spend twice as much time checking every aspect and analyzing the payment processor contract thoroughly to ensure that the right choice was made.

What Is a Payment Processor and Why Do You Need One?

The General Data Protection Regulation (GDPR) is the most rigid global privacy and security law. It has far-reaching implications for businesses, particularly for merchants who handle customer data. 
Its primary objective is to protect the privacy and rights of individuals by regulating the processing and handling of their personal data.
In this article, we will dive into what GDPR is, why it is crucial for merchants, and provide essential recommendations to ensure compliance that helps build customer trust.
<h2>GDPR in a Nutshell </h2>
As mentioned above, the General Data Protection Regulation is a significant data protection law setting the highest standards for privacy and security.
Although it originated in 2018 from the European Union (EU), it applies to organizations worldwide if they handle or process data of EU individuals. 
The implementation of the GDPR reflects Europe&#8217;s strong commitment to data privacy and security, which is extremely important nowadays, when individuals increasingly rely on cloud services and data breaches aren’t uncommon.
<h2>GDPR Compliance: No Exceptions</h2>
Compliance with the General Data Protection Regulation is mandatory for any organization processing individuals&#8217; personal data in the European Union. 
The term &#8220;personal data&#8221; refers to any information related to an individual, including but not limited to their name, email address, IP address, physical characteristics, and political affiliations. It encompasses all aspects of data handling, from collection to storage, transmission, and analysis.
Even if an organization is not EU-based, it still needs to comply with the GDPR if it processes the personal data of individuals in the EU. For instance, if your business is headquartered in Texas and you offer goods or services to residents in the Netherlands your business will need to be GDPR compliant.  
Apart from for-profit companies, <a href="https://www.investopedia.com/terms/n/non-profitorganization.asp" target="_blank" rel="noopener">nonprofits</a> and public entities must also adhere to GDPR requirements. GDPR compliance involves the implementation of various technical and operational precautions to ensure the protection of personal data held by organizations. 
To begin the compliance process, organizations should conduct a comprehensive GDPR assessment to help them identify the personal data they control, its storage locations, and the security measures in place to protect it.
Adhering to the privacy principles outlined in the GDPR is essential. These principles include obtaining consent from individuals for data processing, ensuring the right to data portability, and maintaining data accuracy and integrity. 
Organizations should also review and update their privacy notice to provide transparent information to individuals about processing their personal data.
<img decoding="async" loading="lazy" class="aligncenter wp-image-29904 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/09/GDPR-for-Merchants-02-1024x576.png" alt="" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/09/GDPR-for-Merchants-02-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/09/GDPR-for-Merchants-02-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/09/GDPR-for-Merchants-02-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/09/GDPR-for-Merchants-02-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/09/GDPR-for-Merchants-02-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/09/GDPR-for-Merchants-02.png 1600w" sizes="(max-width: 750px) 100vw, 750px" />
<h2>Consequences of Non-Compliance</h2>
To emphasize the importance of upholding its privacy and security requirements, the GDPR imposes substantial fines on non-compliant entities.
Data protection authorities in each country can impose sanctions and fines for non-compliance, reaching up to €20 million or 4% of the organization&#8217;s global revenue, depending on the higher amount. 
In addition, the body has the authority to impose other sanctions, including bans on data processing activities and public reprimands. 
These measures ensure that organizations take data protection and privacy obligations seriously and serve as a deterrent against non-compliance with the GDPR.
Achieving GDPR compliance poses significant challenges for businesses, particularly small and medium-sized enterprises (<a href="https://single-market-economy.ec.europa.eu/smes/sme-definition_en" target="_blank" rel="noopener">SMEs</a>). So, it&#8217;s crucial to have a good understanding of The General Data Protection Regulation.
<h2>Data Protection Officer (DPO) </h2>
Depending on the nature and scale of data processing activities, organizations may be required to appoint a <a href="https://edps.europa.eu/data-protection/data-protection/reference-library/data-protection-officer-dpo_en" target="_blank" rel="noopener">Data Protection Officer (DPO)</a> to oversee GDPR compliance efforts. 
The responsibilities of a DPO include:
<ul>
<li style="font-weight: 400;" aria-level="1">Advising and Informing: The DPO provides guidance and raises awareness about data protection laws, regulations, and best practices.</li>
<li style="font-weight: 400;" aria-level="1">Monitoring Compliance: The DPO assesses the organization&#8217;s data protection policies, procedures, and practices to identify potential risks and areas for improvement and to ensure compliance with applicable laws and regulations.</li>
<li style="font-weight: 400;" aria-level="1">Data Protection Impact Assessments (DPIAs): The DPO is responsible for conducting or overseeing DPIAs, which assess the potential risks and impacts of data processing activities on individuals&#8217; privacy rights. </li>
<li style="font-weight: 400;" aria-level="1">Acting as a Point of Contact: The DPO handles inquiries, requests, and complaints about data protection, ensuring timely and appropriate responses.</li>
<li style="font-weight: 400;" aria-level="1">Cooperation and Collaboration: The DPO works closely with internal stakeholders and external parties to ensure that data protection requirements are met.</li>
<li style="font-weight: 400;" aria-level="1">Staff Training and Awareness: The DPO conducts or coordinates training programs and awareness campaigns to educate employees about data protection responsibilities, policies, and procedures and promote a culture of privacy and data protection within the organization.</li>
<li style="font-weight: 400;" aria-level="1">Record-Keeping and Documentation: The DPO maintains records of the data processing activities, including data protection policies, data breaches, and responses to data subjects&#8217; requests. </li>
<li style="font-weight: 400;" aria-level="1">Liaising With Supervisory Authorities: The DPO acts as a liaison with data protection supervisory authorities, communicating and cooperating with them on data protection compliance, investigations, and audits.</li>
</ul>
Based on the size, nature, and complexity of data processing in the organization, the specific responsibilities of a DPO may vary. 
Nevertheless, its role is critical in ensuring effective data protection governance and promoting a privacy-centric approach within the organization.
<h2>Why Should Merchants Comply With GDPR?  </h2>
Merchants have a legal and ethical responsibility to comply with the GDPR for several reasons:
<ol>
<li style="font-weight: 400;" aria-level="1">Legal Obligation: The GDPR applies to businesses that process the personal data of individuals in the EU. Regardless of their location, merchants must comply with the GDPR if they collect, store, or process the personal data of EU residents. Failure to comply with the regulation can result in significant penalties.</li>
<li style="font-weight: 400;" aria-level="1">Protection of Customer Data: GDPR compliance ensures that merchants handle customer data securely and responsibly. It establishes strict requirements for collecting, storing, processing, and sharing personal data, aiming to protect individuals&#8217; privacy rights. </li>
<li style="font-weight: 400;" aria-level="1">Customer Trust and Reputation: Customers are increasingly concerned about the privacy and security of their personal data, and they are more likely to engage with businesses that prioritize data protection. By complying with the GDPR, merchants can assure their customers that their personal information is handled under established standards.</li>
<li style="font-weight: 400;" aria-level="1">Competitive Advantage: In an era where data breaches and privacy scandals regularly make headlines, businesses that prioritize data protection and privacy are viewed more favorably by their consumers.</li>
<li style="font-weight: 400;" aria-level="1">Global Data Protection Standards: Even if a merchant operates outside the EU, they may still need to comply with similar regulations in their jurisdiction. By understanding and implementing GDPR requirements, merchants can align their data protection practices with international standards, making it easier to adapt to evolving data protection regulations worldwide. 
</li>
</ol>
Overall, compliance with the GDPR is essential for merchants to meet legal obligations, protect customer data, gain customer trust, maintain a competitive advantage, and adhere to global data protection standards. 

By embracing GDPR compliance, merchants can ensure responsible data handling practices and contribute to a more privacy-conscious digital ecosystem.
<h2>What Is the Right to Be Forgotten? </h2>
The GDPR gives individuals a broad scope of control over the personal data they share with organizations. 
Apart from the right to be informed, have access to their data, and recertificate it, they are also entitled to restrict its processing, object, and erasure if necessary. 
Data portability and the rights related to profiling and automated decision-making also fall within the scope of the control mentioned above.  
Without a doubt, the above-mentioned <a href="https://gdpr.eu/right-to-be-forgotten/" target="_blank" rel="noopener">right to be forgotten</a> is one of the key personal rights given by the GDPR. 
According to this right, individuals can request the deletion of their data by the data controller without undue delay. It applies provided that certain conditions are met. These conditions include if the organization is processing data unlawfully or processing personal data for direct marketing, and the individual objects to this. 
Note that this right is not absolute, and in some justified-by-law situations, the organization might deny a request to erase data.
<h2>Build Trust With GDPR Compliance</h2>
GDPR imposes significant responsibilities on merchants in safeguarding customer data and upholding individuals&#8217; privacy rights. By embracing GDPR compliance, merchants can build customer trust, avoid legal ramifications, and gain a competitive advantage. 
However, compliance with the GDPR goes beyond technical and operational measures. Organizations must establish a data protection culture, incorporating privacy considerations into their business practices and decision-making processes. 
Regular employee training and awareness programs are crucial to foster a privacy-conscious mindset throughout the organization.
Businesses need to stay up to date with changes and guidance provided by data protection authorities and regulatory bodies to ensure ongoing compliance with the GDPR. 
By following the recommended practices and investing in robust data protection measures, merchants can navigate the evolving landscape of data privacy and ensure a secure and trustworthy environment for their customers.

GDPR Compliance for Merchants: Ensuring Data Protection and Trust

With more than 1.16 billion non-cash transactions in 2022 and their estimated number expected to soar to 2.12 billion by 2026 (according to Statista report: <a href="https://www.statista.com/statistics/265767/number-of-cashless-transactions-worldwide-by-region/" target="_blank" rel="noopener">Number of digital payments worldwide by region 2013-2021, with forecasts to 2026</a>), ensuring the security of payment card data has become a top priority for businesses worldwide. 
One essential aspect of protecting sensitive cardholder information is PCI compliance, or in other words — compliance with the Payment Card Industry Data Security Standard (PCI DSS). 
This article will explore why PCI compliance is crucial for businesses and the entire payment industry. 
<h2>PCI DSS </h2>
Along with the internet explosion and smartphone market growth, the payment sector skyrocketed. A growing need to stay in touch with customers on the move 24/7 and 365 days a year spotlighted the urgent need for an extra layer of online security. 
So, in 2006, <a href="https://www.pcisecuritystandards.org/about_us/" target="_blank" rel="noopener">the PCI Security Standards Council</a> was founded. The founding member&#8217;s body consisted of American Express, Discover, JCB International, Mastercard, and Visa. 
In short, PCI DSS develops and provides enhanced data security standards for the industry. These standards cover fraud prevention and detection, as well as advisable reactions to security breach incidents.
<h2>What Is PCI Compliance?</h2>
PCI compliance is a set of requirements designed to enhance cardholder data security and reduce the risk of data breaches. 
It applies to any merchant that wants to process, store, or transmit <a href="https://www.shift4.com/blog/why-card-security-codes-matter-online-shopping" target="_blank" rel="noopener">credit card data</a>. 
Ensuring compliance with the PCI DSS guidelines is crucial to avoid costly fines and penalties from credit card companies. 
PCI DSS demands that organizations comply with 12 general data security requirements: 
<ol>
<li style="font-weight: 400;" aria-level="1">Install and maintain a firewall configuration to protect cardholder data.</li>
<li style="font-weight: 400;" aria-level="1">Do not use vendor-supplied defaults for system passwords and other security parameters.</li>
<li style="font-weight: 400;" aria-level="1">Protect stored cardholder data.</li>
<li style="font-weight: 400;" aria-level="1">Encrypt transmission of cardholder data across open, public networks.</li>
<li style="font-weight: 400;" aria-level="1">Use and regularly update antivirus software and programs.</li>
<li style="font-weight: 400;" aria-level="1">Develop and maintain secure systems and applications.</li>
<li style="font-weight: 400;" aria-level="1">Restrict access to cardholder data as recommended by <a href="https://en.wikipedia.org/wiki/Principle_of_least_privilege" target="_blank" rel="noopener">the principle of least privilege (PoLP)</a>.</li>
<li style="font-weight: 400;" aria-level="1">Assign a unique ID to each person with computer access.</li>
<li style="font-weight: 400;" aria-level="1">Restrict physical access to cardholder data.</li>
<li style="font-weight: 400;" aria-level="1">Track and monitor all access to network resources and cardholder data.</li>
<li style="font-weight: 400;" aria-level="1">Regularly test security systems and processes.</li>
<li style="font-weight: 400;" aria-level="1">Maintain a policy that addresses information security for all personnel.</li>
</ol>
There are four different levels of compliance, based (mainly) on the transaction volume merchants process annually.
<img decoding="async" loading="lazy" class="aligncenter wp-image-29895 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/09/pci-compliance-OCo-2_2x-1024x292.png" alt="" width="750" height="214" srcset="https://assets.shift4.com/wp-content/uploads/2023/09/pci-compliance-OCo-2_2x-1024x292.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/09/pci-compliance-OCo-2_2x-300x86.png 300w, https://assets.shift4.com/wp-content/uploads/2023/09/pci-compliance-OCo-2_2x-768x219.png 768w, https://assets.shift4.com/wp-content/uploads/2023/09/pci-compliance-OCo-2_2x.png 1332w" sizes="(max-width: 750px) 100vw, 750px" />
Each one comes with specific requirements for merchants. For example, for merchants under level 4, the <a href="https://docs-prv.pcisecuritystandards.org/SAQ%20(Assessment)/Instructions%20%26%20Guidance/SAQ-Instructions-Guidelines-PCI-DSS-v4-0.pdf" target="_blank" rel="noopener">self-assessment questionnaire (SAQ)</a> will be sufficient. 
In contrast, for those following level 1 certification (Shift4, for example), an audit processed by a <a href="https://listings.pcisecuritystandards.org/assessors_and_solutions/qualified_security_assessors" target="_blank" rel="noopener">qualified security assessor (QSA)</a> is required.
It&#8217;s good to know that business volume is not the sole factor defining PCI compliance. Significant security risks, data breaches, or cyber-attacks might tighten the compliance procedure such as assigning the merchant to a higher compliance level.
<h2>Self-Assessment Questionnaire</h2>
Businesses falling under levels 2-4 can achieve compliance with a dedicated self-assessment questionnaire (SAQ) — tools helping organizations to report the results of their self-assessment. 
Since there are different types of questionnaires (e.g., SAQ A, SAQ A-EP, SAQ B, SAQ B-IP, SAQ C-VT, SAQ C, SAQ P2PE-HW, and SAQ D), businesses must identify which one corresponds with how they process card data. 
Thankfully, the PCI Security Standards Council explains each self-assessment questionnaire (SAQ) in this <a href="https://docs-prv.pcisecuritystandards.org/SAQ%20(Assessment)/Instructions%20%26%20Guidance/Understanding_SAQs_PCI_DSS_v3.pdf" target="_blank" rel="noopener">document</a> so you can find the right one for your business.  
Undoubtedly, undergoing PCI requirements could lead to a wide range of struggles for merchants since it&#8217;s a highly technical procedure. Therefore, merchants should coordinate with a payment processor that meets all the PCI Level 1 compliance standards, the highest PCI level with the strictest requirements, just as Shift4 does. 
Merchants working with Shift4 can fully focus on their businesses and stay out of the scope of PCI compliance. They can rest assured that all their and their customer&#8217;s sensitive data are fully protected, as each transaction is encrypted and the data is <a href="https://www.shift4.com/blog/payment-tokenization-explained" target="_blank" rel="noopener">tokenized</a>. 
As a result, their payments are highly secure and processed under PCI requirements without extra costs.
<h2>PCI DSS Version 4.0</h2>
In March 2022, the PCI DSS unveiled its latest version, 4.0, replacing the previous version (3.2) and becoming the most up-to-date framework for PCI DSS compliance. 
As stated in <a href="https://docs-prv.pcisecuritystandards.org/PCI%20DSS/Supporting%20Document/PCI-DSS-v4-0-At-A-Glance.pdf" target="_blank" rel="noopener">the PCI DSS v4.0 At a Glance</a>, which can be found in <a href="https://www.pcisecuritystandards.org/document_library/?document=dss4aag" target="_blank" rel="noopener">the document library</a>, the main goals of PCI DSS v 4.0 are to:  
<ul>
<li style="font-weight: 400;" aria-level="1">Continue to meet the security needs of the payment industry</li>
<li style="font-weight: 400;" aria-level="1">Promote security as a continuous process</li>
<li style="font-weight: 400;" aria-level="1">Add flexibility for different methodologies</li>
<li style="font-weight: 400;" aria-level="1">Enhance validation methods</li>
</ul>
<img decoding="async" loading="lazy" class="aligncenter wp-image-29896 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/09/pci-ssd4-goals-OCo-6_2x-2-1024x500.png" alt="" width="750" height="366" srcset="https://assets.shift4.com/wp-content/uploads/2023/09/pci-ssd4-goals-OCo-6_2x-2-1024x500.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/09/pci-ssd4-goals-OCo-6_2x-2-300x146.png 300w, https://assets.shift4.com/wp-content/uploads/2023/09/pci-ssd4-goals-OCo-6_2x-2-768x375.png 768w, https://assets.shift4.com/wp-content/uploads/2023/09/pci-ssd4-goals-OCo-6_2x-2.png 1332w" sizes="(max-width: 750px) 100vw, 750px" />
What&#8217;s essential is that all businesses must comply with PCI DSS 4.0 by March 2024. 
<h2>PCI Compliance in Europe and the U.S.</h2>
In Europe, the regulatory landscape is more standardized, with the GDPR providing comprehensive data protection guidelines. 
Hence, businesses operating in Europe must comply with PCI DSS and <a href="https://www.shift4.com/blog/gdpr-compliance-for-merchants" target="_blank" rel="noopener">GDPR</a> to ensure the privacy and security of cardholder data.
The U.S. follows a more contractual-based approach, with the card schemes driving compliance through their business agreements. Although compliance with PCI DSS is not mandated by federal law in the U.S., non-compliance can result in significant fines, loss of customer trust, and potential legal consequences. 
So whether it&#8217;s Europe or the U.S., businesses must comply with PCI DSS and are subject to periodic security assessments to ensure ongoing compliance.
<h2>Why Is PCI Compliance Crucial?</h2>
PCI compliance offers numerous benefits for businesses beyond regulatory requirements. 
PCI compliance ensures that organizations handling credit card information maintain a secure environment. This is a key factor in protecting businesses against data breaches, thus helping them to avoid costly fines and penalties.
Since cardholder data can be compromised from various sources if not appropriately secured, businesses must mitigate such a risk by adhering to the strict PCI DSS requirements. 
Compliance significantly builds customer trust by demonstrating a company&#8217;s commitment to protecting sensitive information. Being PCI-compliant means the company&#8217;s systems are secure, and the customers&#8217; data is well protected. 
What&#8217;s more, PCI compliance audits help businesses comply with and implement additional regulations, such as <a href="https://www.hhs.gov/hipaa/for-professionals/privacy/index.html" target="_blank" rel="noopener">HIPAA</a> and <a href="https://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act" target="_blank" rel="noopener">SOX</a>, to name a few.
Yet, one of the critical advantages of the PCI DSS is its detailed action plan, which can be applied to any organization using any payment card processing method despite their size and type.  
Such a streamlined approach gives organizations clear guidelines on the security measures they should implement. It enhances operational efficiency and reduces potential vulnerabilities, ensuring a smoother and more secure payment experience for businesses and their customers.
<h2>PCI Compliance Is Here to Safeguard Your Business</h2>
PCI DSS standards apply to all companies dealing with credit card information. And it&#8217;s a crucial aspect of protecting payment card data in Europe and the U.S. 
While the specific regulatory frameworks and enforcement mechanisms may differ, the underlying objective remains the same: ensuring the security and privacy of cardholder information. 
Therefore, businesses must prioritize PCI compliance to mitigate the risk of data breaches, maintain customer trust, and adhere to industry best practices. 
By implementing robust security measures and staying updated with evolving PCI DSS requirements, businesses can create a safer payment ecosystem for all stakeholders.

What Is PCI Compliance? A Guide for Merchants

Credit Card Decline Codes: A Comprehensive Guide for Merchants

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Smart routing is a solution designed to improve the efficiency of card payments. Since pushing business efficiency is the ultimate goal of every business, payment platforms go to great lengths and come up with new tools or features that boost conversion rates, thus positively impacting sales figures.
And when the merchants process thousands of transactions, even the slightest improvement in the card acceptance rate translates directly into money saved (earned).
</div>
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">What Is Smart Routing?</h2>
Smart routing is an <a href="https://www.investopedia.com/terms/a/artificial-intelligence-ai.asp" target="_blank" rel="noopener">Artificial Intelligence (AI)</a> and machine learning-based dynamic payment solution aiming to maximize payment acceptance rates. In other words, it&#8217;s a feature responsible for choosing (on behalf of the merchant) the most likely-to-succeed payment route.
</div>
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">What Is All the Fuss About?</h2>
In brief, it&#8217;s about the money — your money to be precise.
Day in and day out, the payment platform you work with processes tons of transactions. Some of them will be rejected by the acquirers; thus, some of your customers will be disappointed. Part and parcel of online business, you may say.
But what if you could increase the acceptance rate and reduce the number of dissatisfied customers? Well, with <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a> smart routing, you can.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Step-by-Step Toward a Higher Acceptance Rate</h2>
You are only three steps away from setting up a smart router.
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The creation of a routing account in the customer dashboard.
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<li>
The connection of your merchant&#8217;s accounts to the routing account created in the first step.
</li>
<li>
The creation of a smart router — your final step
</li>
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Imagine the situation when the merchant connected three acquirers with the previously created routing account (let&#8217;s describe the acquiring banks as A, B, and C).
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Then the merchant determined the transaction split as 25:50:25, which means that acquirer A will process approximately 25% of the transactions. Acquirer B will deal with 50% of them, and the last 25% will go through acquirer C.
Proper assessment of the transaction history, acceptance rates, rejections, and so forth is on the merchant, who knows the business inside out. Therefore, has to decide on the final quantitative transactions split. And this is exactly when the smart routing algorithm begins to work.
Its role is to assess (based on historical data) and assign the probability of transaction completion to each of the <a href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener">acquiring banks</a>.
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<img decoding="async" loading="lazy" class="aligncenter wp-image-29918 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/09/large-Streamline-Your-Payment-Flow-With-Smart-Routing-1024x516.png" alt="" width="750" height="378" srcset="https://assets.shift4.com/wp-content/uploads/2023/09/large-Streamline-Your-Payment-Flow-With-Smart-Routing-1024x516.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/09/large-Streamline-Your-Payment-Flow-With-Smart-Routing-300x151.png 300w, https://assets.shift4.com/wp-content/uploads/2023/09/large-Streamline-Your-Payment-Flow-With-Smart-Routing-768x387.png 768w, https://assets.shift4.com/wp-content/uploads/2023/09/large-Streamline-Your-Payment-Flow-With-Smart-Routing.png 1280w" sizes="(max-width: 750px) 100vw, 750px" />
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">How Does the Algorithm Work?</h2>
As mentioned above, each acquirer has a certain level of probability of transaction completion. Let&#8217;s imagine they are: 80% for acquirer A, 70% for acquirer B, and 60% for acquirer C.
One would say that acquirer A would be the obvious choice since its probability is the highest. However, the chance of transaction completion is just one of the elements that the algorithm analyzes. It has to be combined with the quantitative constraints set by the merchant a couple of steps back.
And for some reason, the merchant has decided that acquirer A can proceed with only 25% of all transactions. Possibly some transactions may have already been processed this way. Therefore, acquirer A may not be the first and obvious choice of the smart routing algorithm.
It may channel the payment through the acquirer B instead due to the good combination of the transaction cap and the probability of transaction completion.
In conclusion &#8211; the smart routing algorithm juxtaposes the probability of transaction completion and the quantitative restrictions specified by the merchant to calculate the optimal payment route for a particular transaction.
The feature activates when the buyer clicks the &#8220;buy now&#8221; button and, in a flash, analyzes various factors such as the credit card type, currency, the seller&#8217;s and the trader&#8217;s location, etc. Literally, everything that can impact the transaction approval.
The goal is clearly defined &#8211; do absolutely everything possible to maximize the chances of the transaction being approved. The payment is directed to the most suitable acquirer, providing the highest possibility of transaction completion.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">How To Benefit From Smart Routing?</h2>
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First and foremost – the merchant must have more than one merchant account.Easy with Shift4 since we cooperate with leading acquirers in Europe and America.
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The business volume should be sufficient to be split between different acquirers.
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The merchant must be willing to optimize its payment process.
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</ul>
Smart routing makes a real difference. It improves business efficiency with little effort and no cost. Why not give it a go?
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Smart routing arrows showing options to route transactions

Streamline Your Payment Flow With Smart Routing

As the name implies, a transaction descriptor describes a payment. It is created for customers&#8217; convenience to make the transaction listed on a bank statement easily recognizable.
Why should customers be interested in transaction descriptors at all? The answer is quite simple — because it&#8217;s their money.
Imagine the customer has made a couple of transactions during the month, and when reviewing the bank statement they find it difficult to recall all of them. Small amounts don&#8217;t seem suspicious, so they probably ignore them.
Yet, if they happen to make larger purchases, it can be problematic if it&#8217;s impossible to identify the transactions correctly.
And if the customer is not 100% sure the transaction is legitimate or suspects fraud, they might call their issuing bank and trigger the costly dispute procedure.
Since chargeback requests are often initiated by customers who don&#8217;t recognize the transaction, it is in the interest of the merchants to avoid such situations. And that&#8217;s when transaction descriptors come in handy.
<h2><span style="font-family: var(--heading--font-family); font-size: var(--heading--font-size-h2); font-weight: var(--heading--font-weight); letter-spacing: var(--heading--letter-spacing-h2); background-color: var(--global--color-background); color: var(--global--color-primary);">Types of Descriptors </h2>
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Before determining descriptors for your products or services, it&#8217;s good to assess your needs, get familiar with their usability, and consider potential advantages and problems they may cause. So, what options can merchants consider? Let’s dive deeper below.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">Static Transaction Descriptors</h3>
Static descriptors, otherwise known as hard descriptors, are unchangeable for every transaction processed via a given merchant. They are set for all transactions, regardless of the product or service bought.
Hard descriptors appear after a transaction is settled and are permanently displayed on the statement.
They consist of two elements:
<ul class="ml-[1rem]">
<li>
DBA name
</li>
<li>
Contact information
</li>
</ul>
The <a href="https://www.forbes.com/advisor/business/what-is-a-dba/" target="_blank" rel="noopener">DBA name</a> is nothing other than the &#8220;doing business as&#8221; name. It has to be described shortly, with less than 22 characters. The character limit for contact information is even more restrictive — the merchant has only 11 characters at their disposal.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">Dynamic Transaction Descriptors</h3>
Dynamic descriptors are required when describing a specific product or service, not the merchant in general. They are configured for every transaction via the API precisely when being processed. For this reason, the descriptions differ depending on the product or service being purchased.
Why would merchants need dynamic descriptors? They are useful when selling products or services more recognizable than the company&#8217;s name.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">Soft Descriptors (Pending)</h3>
These descriptors are temporary. They are used for pending transactions — transactions that have been authorized but have yet to be captured. As soon as the payment is processed, the soft descriptor is replaced with the permanent one.
The content for soft descriptors is usually identical to static ones. Yet, the bank might display the payment provider&#8217;s name instead of the merchant&#8217;s. It’s also important to acknowledge that pending transactions can&#8217;t be disputed.
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<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29536" src="https://assets.shift4.com/wp-content/uploads/2023/06/Transaction-Descriptor-in-content-1024x576.jpg" alt="Transaction Descriptor check mark graphic" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/06/Transaction-Descriptor-in-content-1024x576.jpg 1024w, https://assets.shift4.com/wp-content/uploads/2023/06/Transaction-Descriptor-in-content-300x169.jpg 300w, https://assets.shift4.com/wp-content/uploads/2023/06/Transaction-Descriptor-in-content-768x432.jpg 768w, https://assets.shift4.com/wp-content/uploads/2023/06/Transaction-Descriptor-in-content.jpg 1201w" sizes="(max-width: 750px) 100vw, 750px" />
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Best Practices to Consider</h2>
Do transaction descriptors guarantee that customers will recognize the transaction at first glance? No.
However, there are many ways to optimize information displayed on a bank statement, thus reducing the risk of chargebacks. Here are a few to consider.
<h3 class="mb-5 font-light">Easy-to-Identify Business Name</h3>
The full name of the company is only sometimes the best choice when it comes to transaction descriptors. Why? Because the customers might be more familiar with the brand or trading name than the company&#8217;s name.
Here’s an example —Imagine we have a bookstore named &#8220;4READERS&#8221;, which is relatively easy to remember. Yet, the registered name of this bookstore is BKS, Inc. 
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Since the legal name differs from the one used daily, the customer will find it difficult to identify the transaction described as &#8220;BKS YOURWEBSITECOM 111-222-1234&#8220;.
Instead, they will probably have fewer or no problem identifying &#8220;4READERS YOURWEBSITECOM 111-222-1234&#8220;.
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In some cases, it&#8217;s the product that should be mentioned in the transaction description, especially if it&#8217;s completely different from the brand name.
Whatever option is chosen, the descriptor&#8217;s purpose is to make it easier for the customers to recall the transaction. Needless to say, none of the meaningless elements, such as &#8220;Inc.&#8221;, &#8220;Ltd.&#8221; or similar, should appear in the descriptor. If it doesn&#8217;t provide added value or information for your customers, there&#8217;s no place for it.
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<h3 class="mb-5 font-light">Contact Information</h3>
Undoubtedly, it&#8217;s much more effective to answer the call from the client than to deal with the costly <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener noreferrer">chargeback</a>. For this reason, the contact information included in the descriptor may (literally) save the merchant&#8217;s money.
If the client has trouble recognizing the purchase, they should have the ability to contact the merchant and the merchant should have the chance to resolve the issue before a chargeback happens. It&#8217;s the most welcome path for both parties.
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<h3 class="mb-5 font-light">Website Address</h3>
Putting the website address in the descriptor is also wise, especially for online merchants. In some situations, the website address will ring a bell and might be sufficient to recall the purchase, thus avoiding possible chargebacks.
To sum it up, the ideal descriptor should contain the following:
<ul>
<li class="mb-5 font-light">Company name</li>
<li class="mb-5 font-light">Website address</li>
<li class="mb-5 font-light">Company location</li>
<li class="mb-5 font-light">Contact information</li>
</ul>
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">It&#8217;s all in the Name</h2>
It&#8217;s the <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">issuing bank</a> that determines how a customer sees the descriptor. As a rule, it comes as the following: COMPANYNAME 123-123-1234 ZIP CODE UK or COMPANYNAME COMPANYSITECOM ZIP CODE CH.
Yet, sometimes the bank may display only a part of the descriptor; hence, keeping it simple, short, and easy-to-identify increases the merchant&#8217;s chances of avoiding misunderstandings on the customer&#8217;s side. This diminishes the risk of costly and time-consuming chargeback disputes. Clear and relevant descriptors mean fewer chargebacks and better customer relationships.
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What Is a Transaction Descriptor and How Can Your Business Benefit From It?

The use of online payments is transforming the way businesses operate and interact with customers in today&#8217;s digital era. By adopting online payment solutions, businesses can enjoy a range of benefits beyond just convenience and accessibility. In this article, we’ll explore the positive impact online payments have on businesses, including increased efficiency, growth, and customer satisfaction.
Offering online payment options allows customers to purchase products from anywhere at any time, making it incredibly convenient for them. It also benefits businesses by reducing <a href="https://www.shift4.com/blog/checkout-abandonment-what-it-is-how-to-reduce" target="_blank" rel="noopener">cart abandonment</a> rates and expanding their customer base. Online payments also lead to cost savings through lower processing fees and <a href="https://www.shift4.com/blog/protect-business-from-fraud" target="_blank" rel="noopener">reduced fraud risks</a>.
Let&#8217;s delve into more benefits of online payments. 
<h3>1. Convenience for Customers</h3>
Online payments offer superior convenience to customers as they can pay for products or services using their preferred payment method. By providing secure and user-friendly payment gateways, businesses can streamline the purchasing process, allowing customers to make transactions anytime, anywhere, and from any device. Unlike traditional brick-and-mortar stores with limited operating hours, online businesses are always accessible.
This convenience increases customer satisfaction, encourages repeat business, and helps build long-term relationships. It also eliminates the need to physically visit a store or write a check and can help you attract more customers, making it easier for them to do business with you.
<h3>2. Increased Sales and Faster Payments</h3>
Allowing customers to pay online can significantly increase your business&#8217;s sales and revenue. By providing a secure and seamless payment process, customers are more likely to complete their transactions, reducing cart abandonment rates. Accepting online payments also enables you to reach new customers who may not have access to physical stores or prefer shopping online, expanding your market and ultimately boosting your sales.
Switching to online payments can enhance your cash flow by shortening the duration required to receive payments. Traditional payment methods, such as checks, may take days or weeks to clear, thereby impacting the cash flow of your business. In contrast, online payments are typically processed within minutes, which results in improved liquidity, better financial management, and more efficient planning and decision-making. 
 
Customers can complete their transactions swiftly with just a few clicks, saving valuable time and effort. Additionally, stored payment information and the option for one-click payments further streamline the process, allowing customers to make repeat purchases with minimal effort. This simplicity eliminates the need to repeatedly enter payment details, making the overall experience faster and more convenient for your customers.
<h3>3. Expanding Customer Reach</h3>
Traditional brick-and-mortar stores are limited to serving customers within their local vicinity. Online payment options open doors to a vast customer base beyond geographical boundaries.
With a global reach, businesses can tap into new markets, draw in customers from different regions, and break the limitations of physical storefronts. Online payments eliminate barriers and enable businesses to connect with customers worldwide, facilitating growth and expansion opportunities.
<h3>4. Enhanced Security</h3>
Security is a top concern for businesses and customers in the digital realm, especially regarding financial transactions. Reputable payment providers employ robust security measures, like encryption and fraud detection, to protect your business and customers&#8217; sensitive information. Encryption technologies, <a href="https://www.shift4.com/blog/payment-tokenization-explained" target="_blank" rel="noopener">tokenization</a>, and multi-factor authentication ensure secure transactions, reducing the risk of fraud and instilling trust in customers. 
<h3>5. Flexibility of Payment Methods</h3>
<img decoding="async" loading="lazy" class="aligncenter wp-image-29716 size-large" src="https://assets.shift4.com/wp-content/uploads/2023/08/online-payments-01-1024x576.png" alt="Woman making an online payment with her credit card on a tablet - Shift4" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/08/online-payments-01-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/08/online-payments-01-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/08/online-payments-01-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/08/online-payments-01-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/08/online-payments-01-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/08/online-payments-01.png 1600w" sizes="(max-width: 750px) 100vw, 750px" />
Online payments offer customers a wide range of payment options, allowing them to choose the method that suits them best. Online payment platforms can accommodate diverse preferences, from credit and debit cards to digital wallets, bank transfers, or even cryptocurrencies. Customers no longer need to carry cash or worry about finding an ATM. They can effortlessly make payments using their preferred method, enhancing convenience and providing a seamless checkout experience.
<h3>6. Cost Savings</h3>
By using online payments, you can save money on payment processing costs. Traditional payment methods like checks and cash are costly to process and require additional resources like staff time and bank fees. Online payments are automated, reducing processing costs and streamlining payment operations. Plus, online payments can help prevent fraud and <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargebacks</a>, which can lead to costly disputes and lost revenue.
<h3>7. Access to Mobile and Tech-Savvy Customers</h3>
The way people shop and pay for things has changed with the popularity of smartphones and mobile technology. Many customers now prefer to use their mobile devices for these tasks. To meet their expectations for convenience and accessibility, businesses can implement online payment solutions that are optimized for mobile devices. This makes it easier for customers to engage with your business from anywhere and at any time. 
By offering mobile-friendly payment options and a streamlined checkout process, companies can connect with a growing number of mobile users and expand their customer base. Embracing such payment options is the key to unlocking the vast potential of a younger generation of buyers who exclusively rely on their mobile devices. In today&#8217;s digital age, where convenience and efficiency reign supreme, businesses that adapt and cater to the mobile-first mindset are poised for success.
<h3>8. Reduced Administrative Burden</h3>
Managing cash, handling physical receipts, and reconciling transactions can be time-consuming and prone to errors. Online payments automate these processes, reducing the administrative burden for businesses. Integrated payment systems offer automated invoicing, transaction tracking, and simplified accounting. This streamlines operations and allows staff to focus on core business activities.
<h3>9. Detailed Transaction Insights and Analytics</h3>
By using online payment systems, businesses can gain valuable insights into customer behavior and transaction data. They can access comprehensive analytics such as sales trends, customer preferences, and purchase patterns. With this information, businesses can make data-driven decisions, enabling them to create targeted marketing campaigns, manage inventory, and provide personalized customer experiences.
<h3>10. Integration With eCommerce Platforms</h3>
If you&#8217;re running an online store, it&#8217;s essential to seamlessly integrate payment gateways with your <a href="https://www.shift4shop.com/" target="_blank" rel="noopener">eCommerce platform</a>. Online payment solutions make this easy, allowing you to streamline the sales process. This integration simplifies inventory management, order fulfillment, and customer data synchronization, improving operational efficiency and creating a smooth customer experience.
<h2>Unlocking Growth and Customer Satisfaction</h2>
Online payments offer numerous benefits for businesses looking to streamline their payment processing and enhance customer experience. By offering convenient payment options, increasing sales, saving costs, improving cash flow, and enhancing security, online payments can help businesses stay competitive and succeed in today&#8217;s fast-paced marketplace. 
Embracing online payments is no longer just an option; it’s necessary for businesses of all sizes. By implementing online payment solutions, businesses can unlock growth potential, elevate customer satisfaction, and stay competitive in the dynamic digital landscape. If you haven&#8217;t already, now is the time to consider <a href="https://www.shift4.com/online-payments" target="_blank" rel="noopener">implementing online payments </a>for your business and begin reaping the rewards.

How Online Payments Benefit Your Business

Did you know that, according to <a href="https://www.globaldata.com/store/report/usa-cards-and-payments-market-analysis/" target="_blank" rel="noopener">Global Data</a>, card transactions in the US in 2023 are expected to reach $10.3 trillion in purchase volume?
As stated in <a href="https://spendmenot.com/blog/cash-vs-credit-card-spending-statistics/" target="_blank" rel="noopener">the Spendmenot report</a>, almost 60% of consumers globally prefer using cards. 
In the US alone, nearly 200 million adults have credit cards (that’s an average of 3.84 credit cards per person). No wonder credit and debit card payments are a part of every business’ daily life! 
Because card payments are so popular, merchants should be familiar with the various card transaction types to better understand payment status and what’s really going on with transactions. 
<h2>Entities Involved in the Card Transaction Process</h2>
In order to understand how card transactions work, it’s important to understand who is involved in the process: 

<ul>
<li style="font-weight: 400;" aria-level="1">Merchant</li>
<li style="font-weight: 400;" aria-level="1">Payment gateway (Shift4)</li>
<li style="font-weight: 400;" aria-level="1"><a href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener">Acquiring bank</a> (merchant’s bank)</li>
<li style="font-weight: 400;" aria-level="1">Card organization (for example: Visa, Mastercard, American Express)</li>
<li style="font-weight: 400;" aria-level="1"><a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">Issuing bank</a> (customer’s bank)</li>
<li style="font-weight: 400;" aria-level="1">Customer</li>
</ul>
Customers don’t need to know the nitty-gritty of a particular card transaction type. From their perspective, using a credit card seems uncomplicated and effortless. But, in reality, there are many different types of card transactions and these transactions may be processed differently depending on the situation. 
From the merchant perspective, understanding the specifics and nuances of different card transaction types is key because one error of judgment may lead to severe financial consequences, including chargebacks. 
<h2>Card Transaction Types </h2>
<img decoding="async" loading="lazy" class="size-large wp-image-29684 aligncenter" src="https://assets.shift4.com/wp-content/uploads/2023/08/In-Content-Card-Transaction-Types-An-Overview-for-Merchants-1024x577.png" alt="Customer using a credit card for a transaction with a mobile SkyTab POS system - Shift4" width="750" height="423" srcset="https://assets.shift4.com/wp-content/uploads/2023/08/In-Content-Card-Transaction-Types-An-Overview-for-Merchants-1024x577.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/08/In-Content-Card-Transaction-Types-An-Overview-for-Merchants-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/08/In-Content-Card-Transaction-Types-An-Overview-for-Merchants-768x433.png 768w, https://assets.shift4.com/wp-content/uploads/2023/08/In-Content-Card-Transaction-Types-An-Overview-for-Merchants.png 1200w" sizes="(max-width: 750px) 100vw, 750px" />
Below is a breakdown of some of the most common card transaction types: 
<h3>Purchase or Sale </h3>
It’s not surprising that this type of transaction is the most common. It’s the result of a purchase made by a customer either at the point of sale or via any card-not-present sales channel (like a merchant website). 
When confirming the purchase, the customer submits their credit card data on the merchant’s website or at the point of sale. This data is immediately sent to the payment processor and then to the card network, which approves the transaction with the issuing bank. Once the transaction is approved, the sale is confirmed. 
The whole process takes just seconds.  
<h3>Refund</h3>
When a merchant needs to reverse a previously charged payment and return money to the cardholder, a refund occurs. A refund can be completed either partially or fully. However, it can’t exceed the original payment amount. 
A refund request is sent to the payment processor (for example: Shift4) and the information is transferred to the acquiring bank, which then sends the money to the issuing bank. During the final stage of the refund, the issuing bank returns the funds to the exact card used to make the initial payment.  
<h3>Pre-Authorization</h3>
Sometimes pre-authorization is called a pre-auth. It’s similar to the purchase or sale transaction type, but the main difference is that it does not actually complete the sale. 
A pre-authorization is used when a customer’s funds must be temporarily held to secure the transaction-to-be. It’s widely popular in the tourism or car rental industries when deposits are taken to cover any unexpected extra charges.   
Usually, pre-authorized funds are held for up to 10 days. At that time, if the merchant determines that the transaction should proceed, the capture transaction (which we’ll explain a bit later) occurs.
<h3>Authorization</h3>
In layman’s terms, a card authorization is the approval received from the issuing bank that confirms that the cardholder has sufficient funds to cover the cost of a given transaction. 
The whole authorization process takes seconds and requires swift communication between all the parties involved. Here’s a breakdown of the process:
<ul>
<li style="font-weight: 400;" aria-level="1">The customer submits their card data or uses their card at the point of sale. </li>
<li style="font-weight: 400;" aria-level="1">The merchant’s software sends an automated request to the payment processor or the acquiring bank asking them to authorize the transaction.</li>
<li style="font-weight: 400;" aria-level="1">The acquirer sends over the approval request to the issuing bank (via the card network). </li>
<li style="font-weight: 400;" aria-level="1">The issuer verifies if the customer’s card is valid and if the funds are sufficient to cover the cost of the transaction. It returns either approval (with the authorization code necessary to proceed with the transaction) or a decline (with <a href="https://www.shift4.com/blog/credit-card-decline-codes-for-merchants" target="_blank" rel="noopener">the error code</a>).  </li>
</ul>
<h3>Capture</h3>
In short, a capture transaction is the completion of a pre-authorization phase. Here’s a look at how this second phase looks for merchants that use Shift4:
<ol>
<li style="font-weight: 400;" aria-level="1">The capture request is sent to Shift4, which informs the acquiring bank.</li>
<li style="font-weight: 400;" aria-level="1">The capture is then sent to the issuing bank, which takes the funds from the customer.</li>
<li style="font-weight: 400;" aria-level="1">The financial transaction is completed, and the merchant is notified by Shift4.</li>
</ol>
It’s important to note that merchants cannot capture more than the pre-authorization amount. The original approval pre-authorization code is required for capture to be successful. 
<h3>Void</h3>
If a transaction is canceled before being completed, it’s called a void transaction. This is different from a refund, though. It’s good to note that a completed transaction cannot be voided. If this is the case, the refund process must take place. 
A cancellation action can be initiated either by the customer (if they changed their mind) or by the merchant (if they don’t want to proceed with the transaction). 
If either of them wishes to cancel the transaction, they can void it and send the void information via the payment gateway through the acquiring bank to the issuing bank. The latter then unblocks the funds on the customer’s card. 
As a result, if the original transaction has been voided and the customer will not be charged.
<h3>Verification</h3>
A verification transaction (usually for $0 or small amounts like $1 or $2) takes place when a merchant needs to test the customer&#8217;s credit card&#8217;s validity before charging the card later. They must send card data to the issuing bank for validation. 
The issuing bank verifies the transaction details and approves or denies it. If the bank approves the transaction (confirms that <a href="https://www.shift4.com/blog/why-card-security-codes-matter-online-shopping" target="_blank" rel="noopener">the security code</a> is correct and there is money in the account)the card network provides an authorization code and the merchant can then complete the sale. If the transaction is denied, the sale will not go through.
Apart from its primary use — <a href="https://www.shift4.com/blog/protect-business-from-fraud" target="_blank" rel="noopener">minimizing the risk of fraud</a> —  verification transactions come in handy when recurring payments occur. Before a card is charged, the verification transaction is run to test the card data and save it for future use (for example: recurring subscriptions), thus eliminating the risk of transaction denial. 
<h3>Settlement</h3>
Settlement transactions occur when funds are successfully transferred from a cardholder&#8217;s account to a merchant&#8217;s account. This is done automatically via a payment processor without any action from the merchant&#8217;s side. 
It&#8217;s important to be aware that settlement time windows vary depending on the procedures incorporated by card brands, acquirers, and payment processors. 
Authorization is issued immediately, but it usually takes up to 48 hours for the money to be moved from the card-related account. 
Once the funds are transferred to the payment processor, merchants must wait up to 24 hours before seeing the money in their own account.
<h3>Chargebacks</h3>
Perhaps the most fearsome transaction type from a merchants&#8217; perspective is a chargeback. 
Chargeback transactions occur when a customer decides to dispute a charge on their bill. They contact their card issuing bank and request that the charge be reversed. 
The issuing bank issues a code for the dispute, which formally triggers the procedure, and then the merchant provides proof that the cardholder made the purchase. 
No matter if the transaction was legitimate or fraudulent, it&#8217;s the merchant who must cover the chargeback fee. If the transaction isn&#8217;t legitimate, the merchant must reimburse the full amount plus extra chargeback fees..
Chargebacks can severely harm a business, but they can be managed if merchants (supported by a best-in-class payment provider like Shift4) prepare themselves well for a possible chargeback. <a href="https://dev.shift4.com/resources/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">Here&#8217;s how merchants can prevent chargebacks effectively</a>. 
<h2>Wrapping Up</h2>
Payment processing requires a vast knowledge of the transaction specifics. The good news is that if you choose an end-to-end payment processor like Shift4, you can focus on your business instead of worrying about these details. We can serve as the experts and make the process seamless and hassle-free for the merchant.

Graphic representing card transaction types for merchants - Shift4

Card Transaction Types: An Overview for Merchants

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A certain amount of paperwork is a necessary part of operating an online business and offering goods or services online. Even if the compliance procedure could take a few weeks, smart planning can help you speed it along and minimize mistakes.
Online business owners need to ensure their websites comply with banks’ or payment processors’ regulations. For the process to move swiftly and efficiently, it is preferable to make all the necessary adjustments before the process even begins.
In this article, we&#8217;ll go over a few website essentials that you absolutely must have.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Transparent Terms and Conditions</h2>
The terms and conditions agreement is not only for customers; it is also crucial for safeguarding your company by ensuring that clients are aware of their rights and obligations.
It helps you prevent client confusion and misunderstandings, so it needs to be written with complete clarity regarding what should be done in every specific situation. Consumers should be informed about all the issues that come with shipping and delivery, the return policy, and the privacy policy as well as information about pricing, payment, and taxes.
Here’s what you should include in your terms and conditions.
<h3>A Privacy Policy</h3>
Ensure you have a privacy policy with clear information about the use of personal or sensitive data. Specify what information you gather from your customers and how you use it. Define the data that is saved or sent to third-party applications. Also, if you collect data from a mailing list, make sure to include instructions on how users can unsubscribe from the list and change or delete their personal information. Customers will disclose sensitive information and credit card numbers with you, therefore you must take precautions to protect that data.
<h3>A List of Payment Options</h3>
Make sure to list the payment options accepted on your website, along with pricing information that include all taxes and other fees. You can also include details on how payments will be handled in the event of missed or late payments or payment disputes.
<h3>A Refund Policy</h3>
Making sure users understand what to do with things they purchase from your website in particular circumstances is the goal. If the goods or services are not as described or don’t work as intended, merchants are required to replace, fix, or give a refund.
<h3>An Opt-Out Policy</h3>
A clear opt-out policy that outlines how clients can stop using your services. Within 14 days, they are free to cancel or return the ordered goods or services without incurring any fees.
<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">Delivery and Shipping</h3>
Include a clear statement of the delivery time frame when shipping physical goods.
<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">Dispute Resolution Details and the Website’s Legal Liability</h3>
For situations where a consumer is unsatisfied and requests compensation, it is recommended to include this information in your terms and conditions agreement.
Keep in mind that your terms and conditions should cover matters like the right to a refund and adhere to consumer law. Of course, consumer laws still exist even if you don&#8217;t include them in your website&#8217;s terms and conditions, but you can restrict your liability, for example.
Moreover, keep on your website confidentiality obligation that the contracting party ensures the confidential handling of all customer data. You should also note what steps the merchant takes to protect consumer data on your website (e.g. SSL encryption).
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Imprint On Your Website</h2>
Your website must provide contact information, so you need to include full contact details, including:
<ul class="ml-[1rem]">
<li>
 Company name
</li>
<li>
Physical address
</li>
<li>
Email address and/or phone number.
</li>
</ul>
To make it simple to deal with situations where a client is not satisfied and requests compensation, include this information in your terms and conditions, footer, and contact us sections.
Keep in mind that the country listed in the location section should correspond to your main place of business (which is typically the headquarters).
You can also provide specifics regarding the VAT or the after-sale services that are offered.
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Example:               
Website/URL is operated by Company’s name with the registered address, under the laws of the Country, and is licensed by xxx. XXX, registration Number is XXX and its registered address is XXX.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Clear Product Descriptions</h2>
Your website&#8217;s content should always be consistently updated. Pay particular attention to ensure that each good or service you offer has an accurate and clear description, easy to understand.
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<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29538" src="https://assets.shift4.com/wp-content/uploads/2023/06/Website-Compliance-Requirements-in-Content-1024x576.jpg" alt="Website Compliance Requirements graphic" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/06/Website-Compliance-Requirements-in-Content-1024x576.jpg 1024w, https://assets.shift4.com/wp-content/uploads/2023/06/Website-Compliance-Requirements-in-Content-300x169.jpg 300w, https://assets.shift4.com/wp-content/uploads/2023/06/Website-Compliance-Requirements-in-Content-768x432.jpg 768w, https://assets.shift4.com/wp-content/uploads/2023/06/Website-Compliance-Requirements-in-Content.jpg 1201w" sizes="(max-width: 750px) 100vw, 750px" />
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Checkout Process on Your Page</h2>
If you want to <a href="https://www.shift4.com/online-payments" target="_blank" rel="noopener">sell online</a>, you need to put a payment gateway in place. When your page is going through the compliance process, the bank representative will look at how the payment flows from the customer&#8217;s perspective.
What if you&#8217;re just starting out and don&#8217;t yet have a payment solution on your page? Payments can be added in test mode to allow you to test the process.
Note that ecommerce merchants must provide the final transaction amount on the checkout screen, or show the sequence of the pages that the cardholder sees during the checkout process.
Also, remember that an HTTPS connection should always be used for encryption on the checkout page. All payment information should be provided on the payment page, along with clear pricing information that includes any applicable taxes or other costs.
To let visitors know what payment methods are supported on your website, you should also display logos of card brands. You should also include a recurring disclosure on your website (if needed).
When it comes to recurring payments, you must make sure that your clients are aware of all relevant details, including:
<ul class="ml-[1rem]">
<li>
The amount of the recurring transaction
</li>
<li>
The information on whether the amount is fixed or variable
</li>
<li>
The recurring transaction&#8217;s start and end dates, as well as information on whether those dates are fixed or variable
</li>
<li>
Clear information for a cardholder about the communication method
</li>
</ul>
Furthermore, don&#8217;t forget to include a descriptor with a title that will be familiar to your customers to make it simple to recognize the purchase. Every transaction needs to have a clear transaction identification given to it for future use in the event of disputes or other problems.
Last but not least, is your business <a href="https://www.shift4.com/blog/gdpr-compliance-for-merchants" target="_blank" rel="noopener">GDPR-compliant</a>? The EU&#8217;s new privacy law, known as the GDPR (General Data Protection Regulation), sets new guidelines for organizations on how to handle customer data. In accordance with the standards, retailers must adhere to best practices to maintain compliance with EU legislation.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Reduce the Difficulty of the Compliance Process</h2>
To sum up, make sure your website has the following before beginning the compliance process:
<ul class="ml-[1rem]">
<li>
A contract&#8217;s terms and conditions should include information about shipping, privacy, and refunds
</li>
<li>
An imprint including the company name, physical business address, and phone number or email address
</li>
<li>
The payment page displays credit card logos
</li>
<li>
Updated content on a finished and fully functional website
</li>
<li>
Clear and transparent pricing
</li>
<li>
A payment gateway implemented on the website (if you are just starting, it can be a payment solution in test mode)
</li>
<li>
Clear information and details regarding recurring payments
</li>
<li>
Elements on the checkout page relevant to the <a href="https://en.wikipedia.org/wiki/General_Data_Protection_Regulation" target="_blank" rel="noopener">GDPR</a> recommendations
</li>
</ul>
Generally speaking, your website must be operational. A FAQ page that compiles all the necessary information is something else you might consider, but it&#8217;s not necessary.
Even though website compliance requirements could take some time, if you follow the right methods, it will be far less painful.
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Website Compliance Requirements payment graphic

Website Compliance Requirements: A Step-by-Step Guide For Merchants

Dealing with chargebacks is an inevitable part of running an online business and accepting credit card payments, but there are steps that can be taken to ease the burden. To do it effectively, merchants should understand the essence of the issue. They must be aware of what chargebacks are, why they occur, and how to proceed with them. 
But first and foremost, business owners need to understand what measures they can take to prevent chargebacks. We’ll dive into those specifics in this blog.
<h2>A Quick Reminder: What Is a Chargeback?</h2>
In layman&#8217;s terms, a chargeback is a bank-initiated refund for a purchase made with a credit card. The main difference between a chargeback and a refund is that a refund doesn&#8217;t get the bank involved in returning the money.
As a general rule, a chargeback should only occur when a cardholder disputes a charge after noticing an unrecognizable transaction. 
The original idea behind chargebacks was to provide protection to honest customers experiencing actual fraud. But unfortunately, not every chargeback is justified and legitimate. As a result of the dynamic growth of online businesses, merchants now see more fraud attempts related to chargebacks.
Since consumers have become more and more understanding about how chargebacks work, some dishonest customers have learned to abuse the system and use chargebacks even when they&#8217;re not justified. Such incidents are called friendly fraud and happen when a customer falsely disputes legitimate transactions.
Unfortunately, friendly fraud is far from a small-scale problem. According to <a href="https://chargebacks911.com/chargeback-stats/" target="_blank" rel="noopener">Chargebacks911</a>, friendly fraud is the top source of fraud attacks affecting merchants. 
<h2>What Are the Effective Ways to Reduce Chargebacks?</h2>
<img decoding="async" loading="lazy" class="size-large wp-image-29670 aligncenter" src="https://assets.shift4.com/wp-content/uploads/2023/07/How-to-Cut-Back-on-Chargebacks-02-1024x576.png" alt="Graphical representation of cutting back on chargebacks - Shift4" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/07/How-to-Cut-Back-on-Chargebacks-02-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/07/How-to-Cut-Back-on-Chargebacks-02-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/07/How-to-Cut-Back-on-Chargebacks-02-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/07/How-to-Cut-Back-on-Chargebacks-02-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/07/How-to-Cut-Back-on-Chargebacks-02-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/07/How-to-Cut-Back-on-Chargebacks-02.png 1600w" sizes="(max-width: 750px) 100vw, 750px" />
Now that you understand what a chargeback is and how it could impact your business, let’s talk about prevention. Completely  eliminating chargebacks is impossible, but there are several ways to reduce them noticeably. Here’s a breakdown of some of these methods.
<h3>1. Make Sure Your Website Is Secure </h3>
Fraudsters search for every loophole and bug they can exploit in outdated software. So, updating your website regularly and avoiding clerical or technical errors should be the very first step you take in avoiding chargebacks. 
Encrypt the data on your site, consider using the <a href="https://en.wikipedia.org/wiki/Address_verification_service" target="_blank" rel="noopener">Address Verification Service (AVS)</a>, and collect <a href="https://www.shift4.com/blog/why-card-security-codes-matter-online-shopping" target="_blank" rel="noopener">CVV/CVC</a> with each transaction.
<h3>2. Provide Relevant Product Descriptions </h3>
An incomplete product description (or one that doesn&#8217;t match the product received) results in a higher chance that the customer will file a chargeback. The more details you provide, the better. 
It’s also important to remove items from your website when they’re no longer available for purchase. This will help to prevent confusion. 
The same goes for <a href="https://www.shift4.com/blog/transaction-descriptors-in-brief" target="_blank" rel="noopener">billing descriptors</a>. Chargebacks can sometimes occur simply because of misunderstanding. So, make sure your transaction descriptors match your business name to prevent chargebacks from customers who don&#8217;t recognize your transactions on their account.
Adding contact information to your transaction descriptors — an email address or phone number — will also work in your favor. With this information easily available, customers will be more likely to contact you first rather than the bank.
<h3>3. Work With a Reliable Payment Provider</h3>
Ensure that the payment processor you work with provides <a href="https://www.shift4.com/blog/delayed-capture-what-you-need-to-know" target="_blank" rel="noopener">card authorization and capture</a>, sophisticated and highly effective <a href="https://www.shift4.com/preventing-fraud" target="_blank" rel="noopener">anti-fraud tools</a> with machine learning, AI-based solutions, and an efficient chargeback disputing mechanism. 
<h3>4. Create Clear Refund and Return Policies</h3>
Make your refund and return policies simple and easy to understand and make them visible to website users.  
When a customer isn&#8217;t satisfied with an ordered product, offer a refund. Provide detailed information on how to return the item and how to request that refund. Such an approach will help you prevent chargebacks and avoid negative reviews.
Return management is less expensive in the long run and comes with less hassle than dealing with chargebacks.
<h3>5. Use 3D Secure</h3>
<a href="https://www.shift4.com/blog/3d-secure-2-stronger-authentication" target="_blank" rel="noopener">3D Secure</a> protocol is an extra security layer that shifts the liability from the merchant to the issuing bank. If the customer confirms the transaction with the code, the issuer takes responsibility and covers the potential costs related to chargebacks. The benefits for merchants are indisputable — enhanced security and fraud prevention, fewer disputed transactions, liability shift, and PCI compliance — not to mention increased customer satisfaction. 
<h3>6. Be Clear About Shipping Details</h3>
Being precise is essential when it comes to shipping costs and deadlines. In the case of delays, inform the customer immediately and offer an alternative solution if possible. 
Provide shipment tracking information to keep customers updated about where their package is and when it will be delivered. 
People tend to be impatient and waiting too long for ordered items may lead to a transaction dispute, so consider offering expedited shipping as an option. 
<h3>7. Monitor Product Quality</h3>
Ensure that all your products and services are of the highest possible quality. 
This will result in customers who are pleased when they receive the products they’ve ordered and will prevent chargebacks related to customer satisfaction. 
<h3>8. Provide Accessible Customer Service </h3>
Make it easy for customers to find your contact information and reach you directly if something needs to be fixed with their order.
If possible, make your customer service available 24/7. If that’s not an option, clearly state your business’ support hours on your website and inform your customers about an approximate time frame for addressing their inquiries.
Always deal with customers&#8217; issues promptly and be as responsive as possible. When your customers know the status of their inquiries, they are less likely to file a chargeback.
Open and direct communication with customers can be one of the best ways to reduce chargebacks.
<h3>9. Monitor Orders </h3>
It’s essential that you keep a close eye on your orders. Keeping details of past fraudulent activities and monitoring incoming orders for similar behaviors can help you quickly recognize potential dodgy patterns and prevent your business from money loss. 
Also, keeping detailed records of all transactions may come in handy when gathering evidence and valid proof to dispute future chargebacks.
<h2>Watch Your Chargeback Ratio </h2>
It’s important to be aware of your business’ chargeback ratio. If your ratio is higher than 0.9% and you’re unable to lower it within the recovery time given by a credit card issuing company, your business may be classified as a high-risk merchant, which will incur higher processing fees. In the worst case scenario, too many chargebacks can lead to your merchant account being frozen or terminated.
Taking the steps we outlined above can help you to reduce the number of chargebacks and reduce your chargeback ratio. For more detailed information regarding chargebacks — the representment process in particular — check our comprehensive <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">guide for merchants</a>. 
<h2>Wrapping Up</h2>
Coping with chargebacks is one of the most challenging and costly parts of running an online business. Merchants should take appropriate measures before chargebacks pile up and become a real threat to their businesses.
It&#8217;s crucial to work with a payment provider that will have your back at every step and equip you with robust tools to protect your transactions and reduce the number of chargebacks. 
With Shift4, you can focus on your business and let our machine learning-based solutions limit fraud attempts to save you time and money!

Man holding a smartphone and credit card representing an online chargeback - Shift4

How to Cut Back on Chargebacks

Attracting visitors to your website is challenging, especially in the current competitive landscape. That&#8217;s why redirecting customers to another website to pay is not advisable — it increases the risk of losing them permanently.
Using payment redirection is typically the result of working with an external payment service. It gives customers the option to leave and never return, which is the biggest drawback. But, there are other factors that could negatively impact a business’ sales, as well. Here’s a breakdown.
<h2>1. Customer Reactions</h2>
It&#8217;s essential to provide customers with a seamless, frictionless checkout process as well as clear and concise instructions to complete payment. This ensures clarity and satisfaction and helps to create return customer relationships.
To better understand how payment redirection affects customer reactions, consider this scenario: A customer is shopping on an ecommerce website. They add an item to their cart, click the payment button, and suddenly get redirected to an external website with a different design, logo, and URL.
In this scenario, the customer may get the impression that they&#8217;re paying another business — not the one they intended to buy from. This confusion can be discouraging and could escalate into frustration and result in <a href="https://www.shift4.com/blog/checkout-abandonment-what-it-is-how-to-reduce" target="_blank" rel="noopener">abandoned carts</a>.
Additionally, when using payment redirection, merchants have no control over the emails sent to their customers. Instead, customers receive messages from the payment provider, which makes it more challenging to establish personalized communication.
The following is a look at some of the customer reactions a business might face when using payment redirection:
<h3>Inconvenience</h3>
Customers may become frustrated and abandon their transactions if the redirection to an external service is inconvenient or adds unnecessary steps to the checkout process. 
Redirecting customers to an external website can introduce friction in the checkout process. Customers may wait for the external website to load, create a new account, or navigate through a different interface. This can create a poor user experience and some customers may abandon their cart and leave a website without completing their purchase.
<h3>Security Concerns</h3>
If customers are unsure about the security of the external service or the website&#8217;s overall security, they may hesitate to proceed with the transaction.
<h3>Brand Loyalty</h3>
If customers have a solid attachment to a brand and prefer to do business directly with that brand, they may be disappointed or annoyed by being redirected to an external service.
<h3>User Experience</h3>
It would help if you also examined how many steps your clients must take to make a payment. Choosing a payment solution that you can embed on your website will simplify the entire process. Customers only need to enter the necessary information and click the payment button. That is sufficient to complete a payment without the need to navigate to another website, finish the transaction, and then return to the online store.
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<img decoding="async" loading="lazy" class="size-large wp-image-29570 aligncenter" src="https://assets.shift4.com/wp-content/uploads/2023/06/In-content-Payment-Redirect-graphic-1024x577.jpg" alt="Man looking at his credit card while at a computer - payment redirection - Shift4" width="750" height="423" srcset="https://assets.shift4.com/wp-content/uploads/2023/06/In-content-Payment-Redirect-graphic-1024x577.jpg 1024w, https://assets.shift4.com/wp-content/uploads/2023/06/In-content-Payment-Redirect-graphic-300x169.jpg 300w, https://assets.shift4.com/wp-content/uploads/2023/06/In-content-Payment-Redirect-graphic-768x433.jpg 768w, https://assets.shift4.com/wp-content/uploads/2023/06/In-content-Payment-Redirect-graphic.jpg 1200w" sizes="(max-width: 750px) 100vw, 750px" />
Payments With Redirection in Short
<ol>
<li style="font-weight: 400;" aria-level="1">Customer clicks the payment button</li>
<li style="font-weight: 400;" aria-level="1">Waits for redirection to another website to pay</li>
<li style="font-weight: 400;" aria-level="1">Starts the payment process</li>
<li style="font-weight: 400;" aria-level="1">Fills in the payment form (sometimes there are few clicks needed before they see a payment form)</li>
<li style="font-weight: 400;" aria-level="1">Hits the confirmation button</li>
<li style="font-weight: 400;" aria-level="1">Needs to complete more steps to end payment (optional)</li>
</ol>
The checkout stage is the final step of the buying process, so it&#8217;s better to use this stage to showcase your business name and other corporate identity elements rather than the payment provider ones.
<h2>2. Control Over the Design</h2>
It&#8217;s essential to remember that a poorly designed payment system can lead to decreased sales, even if a business offers the best products or services. When customers attempt to pay and are redirected to a completely different page, this can cause confusion or apprehension about being on the wrong payment page which often leads to cart abandonment.
At times, third-party payment providers may allow businesses to modify the checkout design slightly. Typically, the available adjustments are as simple as altering the color of the header or the payment button. So, even with an excellent and well-designed website, the positive impression a business makes on their website may fade once customers start the purchase process.
Imagine being able to tailor the entire payment form to suit business preferences and requirements. This can be achieved by using payment gateways that offer customizable forms, which can be seamlessly integrated into a business’ website. With complete control over the code, merchants can make any necessary adjustments to ensure that the form perfectly matches the design and functionality of their site.
When the business owner has control over the checkout design, they can ensure that the payment process is seamless and easy to use with clear instructions and minimal distractions. They can also tailor the checkout process to their customers&#8217; preferences, such as offering multiple payment options or allowing customers to save their payment information for future purchases.
Additionally, it can help you improve security and <a href="https://www.shift4.com/blog/protect-business-from-fraud" target="_blank" rel="noopener">reduce the risk of fraud</a>. The online merchants can implement additional security measures, such as two-factor authentication or address verification, to help protect sensitive customer information.
Overall, having control over the checkout design is essential for creating a positive and trustworthy payment experience for customers, which can lead to increased sales and customer loyalty.
<h2>3. Who Owns the Code?</h2>
When seeking a payment solution for a website, it’s important to consider the integration process and how accessible the code will be to the business owner. Choosing a third-party solution or a payment gateway without the possibility to customize the payment form fully gives merchants little to no control over the code. This means they also have little to no control over the entire payment process.
When using payment redirection, a merchant can’t ever be 100% sure that a customer completed a payment. Redirects also take away the chance to display extra offers, which means that customer lifetime value could decrease, which could reduce conversion and affect sales.
Merchants also have no option to set customized error indicators or messages. They can&#8217;t add events to the code and receive delayed notifications. Without payment redirection, the business owner owns the payment process code, which means they can see the whole payment process and all notifications in real-time.
It’s also worth noting that when the business owner owns the code, they can customize the payment experience to match their businesses and customer needs.
Ownership of the code allows them to change the payment process whenever necessary without relying on the payment provider to make those changes. This can help businesses adapt quickly to market changes or implement new features that can improve the payment experience for customers.
Overall, owning the code when working with a payment provider gives greater control, flexibility, and security over the payment process while also providing cost savings in the long run.
<h2>4. Customer Support</h2>
When merchants choose a payment solution with an embedded payment form that allows control over the code, they simplify how they communicate with their clients. Because they are able to see payments in real time, they’ll know when something goes wrong (for example: when a customer has a problem completing a payment). With this information, merchants can act immediately using live chat or contacting the customer directly.
Prompt customer service can prevent issues and purchase abandonment — especially in the case of online payments, when issues can arise at any time. Knowing whether your customers completed the payment procedure or encountered any issues while attempting to pay is extremely important for an online business.
If customers receive prompt assistance, they are more likely to complete the payment and make the purchase, thus increasing conversion rates.
When the payment process redirects customers, business owners cannot act quickly to remedy these situations.
<h2>Wrapping Up</h2>
The impact of redirecting ecommerce customers to an external website to pay depends on several factors, such as the quality of the payment gateway provider, the level of trust and credibility of the ecommerce website, and the ease of use and convenience of the checkout process. Choosing a reputable provider and optimizing your checkout flow can minimize negative impact and increase conversions.
The differences between third-party providers and payment gateways that let merchants process payments directly on their websites are immense. Business owners can’t afford to lose customers, so it’s important to think twice and evaluate options closely before choosing a payment solution.

Concept graphic showing the payment redirection process - Shift4

How Payment Redirection Affects Your Business

As the number of ways to make online purchases expands along with technology development, the payment industry requires solutions that reduce the risk of fraud and data breaches. That’s why <a href="https://www.shift4.com/secure-technology" target="_blank" rel="noopener">secure payment technology</a> is on the agenda of every online business, as it needs to protect customers’ data from cyberattacks.
Tokenization applies to every industry, and businesses are increasingly using it because it provides a data-centric approach with fewer security flaws and risks. It’s estimated that the tokenization market will grow to $2.7 billion by 2028.
According to the <a href="https://reports.valuates.com/market-reports/QYRE-Auto-26Y3935/global-tokenization" target="_blank" rel="noopener">Global Tokenization Market Insights and Forecast to 2028 report</a>, North America leads with a market share of around 58%, followed by Europe and Asia-Pacific with shares of roughly 23% and 12%, respectively. North America is expected to be one of the most profitable regions due to a variety of factors such as an increase in ecommerce payments, online gaming, and shopping, a fully regulated market, an increase in online streaming, increased smartphone usage, and an increase in cyberattack cases.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">What is Tokenization in Online Payments?</h2>
Tokenization is used in the card payment industry to protect sensitive cardholder data in order to comply with industry standards and governmental regulations. Simply put, it replaces the card data and secures it with randomly generated tokens.
More specifically, tokenization is replacing sensitive information with random strings of characters known as <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://dev.shift4.com/docs/api#tokens" target="_blank" rel="noopener noreferrer">tokens</a>. During the payment process, tokens are used to represent cardholder information, such as a 15- or 16-digit card number or bank account details, so the data can be passed through a payment gateway without exposing the card details.
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<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29502" src="https://assets.shift4.com/wp-content/uploads/2023/04/payment-tokenization-03-606x1024.png" alt="payment tokenization Shift4 example object" width="606" height="1024" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/payment-tokenization-03-606x1024.png 606w, https://assets.shift4.com/wp-content/uploads/2023/04/payment-tokenization-03-177x300.png 177w, https://assets.shift4.com/wp-content/uploads/2023/04/payment-tokenization-03-768x1298.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/payment-tokenization-03-909x1536.png 909w, https://assets.shift4.com/wp-content/uploads/2023/04/payment-tokenization-03-1211x2048.png 1211w, https://assets.shift4.com/wp-content/uploads/2023/04/payment-tokenization-03-1568x2651.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/04/payment-tokenization-03.png 1693w" sizes="(max-width: 606px) 100vw, 606px" />
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The tokenization method is also widely used due to the <a href="https://www.pcisecuritystandards.org/" target="_blank" rel="noopener">Payment Card Industry Data Security Standards (PCI DSS)</a>, which have pushed payment tokenization adoption. Tokens can be safely stored and processed outside of a PCI DSS-compliant environment because it provides merchants with a one-to-one replacement for a card&#8217;s <a href="https://www.thebalancemoney.com/what-is-a-primary-account-number-5196139" target="_blank" rel="noopener">Primary Account Number (PAN)</a>. This means that sensitive data never touch the merchant’s servers.
When a customer makes a purchase through your website or application, they put the relevant card details into the custom form, click the pay button. The information is then sent to Shift4 and tokenized — and you’re provided with a token.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">How Payment Tokens Works</h2>
As previously stated, the card token is a temporary representation of card details (generated from a PAN); it must be utilized within 24 hours of creation, or it will expire. In other words, tokens are temporary, securely stored, and simple to create.
Tokens are automatically generated in real-time during a payment transaction (the PAN is substituted by a token), so it doesn’t slow down the process.
Within the <a href="https://dev.shift4.com/docs/api" target="_blank" rel="noopener">Shift4 API</a>, we provide you with a Public and a Secret Key. The Public Key can be accessed via web browser applications and mobile devices, and it’s used to create the tokens. The Secret Key is simply used for all the backend work.
There are two ways you can use a token: you can create a customer or make a charge.
When you create a customer, all pertinent card data and details are saved with that associated customer for an infinite period. This will make it easy to quickly create subscriptions or charges in the future. Plus, with the charge, you make a one-time payment transaction.
The customer&#8217;s credit card information is securely stored so that a merchant can charge subsequent purchases using a token. What’s important here is that a merchant doesn’t see or store the credit card number, which greatly protects both customers and the merchant’s system from fraudulent activity.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Benefits of Payment Tokenization</h2>
Tokenization has been used in various ways for years and is one of the most effective methods of transferring sensitive information, but for the payment industry it turned out to be more secure and cost-effective. Payment tokenization adds an extra level of security to credit and debit card payments and is an effective method of combating fraud.
There are several ways merchants can benefit from payment tokenization. The most common are as follows:
<h3 class="mb-5 font-light">Enhanced Security</h3>
Even if a fraudster steals tokenized data, they will not use it because the token cannot be linked to credit card information stored as a token. Tokenization greatly reduces the risk of sensitive data being exposed.
<h3 class="mb-5 font-light">Cost Savings</h3>
A merchant can save money on PCI compliance by partnering with the right payment platform, and their customers&#8217; data can be managed securely.
<h3 class="mb-5 font-light">Improved User Experience</h3>
Customers can store credit card information in their mobile wallets or at checkout during online payments to be recharged without revealing the original card information. Tokens enable merchants to provide a smooth payment flow and a much better user experience by allowing them to be used in subscriptions and one-click payments for future transactions.
Tokenization also contributes to reducing the scope of <a href="https://www.shift4.com/blog/what-is-pci-compliance" target="_blank" rel="noopener">PCI compliance</a> by allowing fewer system components access to cardholder-sensitive information. A merchant, on the other hand, doesn’t have to worry about storing card data on their servers if they work with a reputable payment platform that is PCI-compliant.
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<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29542" src="https://assets.shift4.com/wp-content/uploads/2023/06/payment-tokenization-01-1-1024x576.png" alt="payment tokenization secure lock graphic" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/06/payment-tokenization-01-1-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/06/payment-tokenization-01-1-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/06/payment-tokenization-01-1-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/06/payment-tokenization-01-1-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/06/payment-tokenization-01-1-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/06/payment-tokenization-01-1.png 1600w" sizes="(max-width: 750px) 100vw, 750px" />
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Wrapping Up: Harness the Power Tokenization to Combat Payment Fraud</h2>
Every online transaction carries the risk of fraud, so it&#8217;s critical to keep it to a minimum. Tokenization solves the problem of storing real credit or debit card data while also assisting in the security of the payment process on your website or mobile application.
Payment tokenization is particularly beneficial for merchants who accept recurring payments, provide one-click purchases, or accept quick mobile payments. The method of substituting real card data during a transaction is one of the most effective ways of protecting customer data, so it’s no surprise that more and more platforms adopt this approach.
Customers&#8217; data is securely stored, allowing them to save their payment information during an initial purchase and use one click for future transactions on a specific website. Merchants can use the data to create a purchasing history for each customer&#8217;s account and launch a loyalty program.
In the event of a data breach, there is very little chance that the token will be actively used by a fraudster because it is a string of meaningless characters that mean nothing to a cyberattacker.
A customer puts the relevant card details into the <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://dev.shift4.com/docs/tutorials/form" target="_blank" rel="noopener noreferrer">custom form</a>, and when they click pay, Shift4 receives the information and tokenizes it. We provide you with the token, and using it grants you access to two things:
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You can make a charge, by creating a new charge object or
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Create a customer object which saves the card details with that customer, and then you can make future charges and subscriptions
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As a result, each time a customer makes a payment with their device, the platform will be able to authorize the subsequent transaction without displaying the customer&#8217;s sensitive data.
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payment tokenization encrypted data graphic

Payment Tokenization Explained

While chargebacks are part and parcel of running an online business, retrieval requests are still a mystery for some merchants. Although they can be annoying, it is highly recommended to respond to them since it&#8217;s the easiest way to prevent customers from disputing chargebacks.
We’re breaking down what a retrieval request is and and what some of the most common reasons behind them are.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">What Is a Retrieval Request?</h2>
A retrieval request (also known as a soft chargeback) is a formalized request from the cardholder regarding the charge on their account.
It occurs when, before validating the transaction, a credit card issuer asks a merchant for the transaction details. It does so on behalf of the cardholder who cannot recognize the charge and decides to contact their bank to clarify the situation instead of disputing a <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargeback</a> immediately.
The easiest and shortest path is when the acquirer responds to the retrieval request with transaction records. But, in some cases, the merchant has to be involved in the process.
Once the merchant sends the transaction details to the acquirer, the latter can fulfill the request.
Even though soft chargebacks are perceived as nuisances, the importance of responding to customers&#8217; requests can&#8217;t be underrated.
Every response managed properly diminishes the risk of chargebacks, thus saving merchants money.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Is a Soft Chargeback a Real Threat?</h2>
Not without reason, the retrieval request process is the same as the chargeback process. A retrieval request means that a cardholder or the issuing bank needs more information about a transaction, which is a clear signal that the transaction is being questioned. It is the first step in the chargeback process.
The main difference with chargebacks is that the transaction amount is not withheld from the merchant&#8217;s account.
Unquestionably, responding promptly (preferably within 10 days) to retrieval requests is crucial unless merchants prefer fighting against chargebacks instead of dealing with the softer version.
Moreover, ignoring soft chargebacks entirely can make the <a href="https://www.lawinsider.com/dictionary/representment" target="_blank" rel="noopener">representment process</a> impossible due evident lack of willingness to clear things up.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Reasons Behind a Retrieval Request</h2>
A retrieval request usually heralds either a forthcoming chargeback dispute or indicates that one is already underway. The following are some of the most common reasons for retrievals:
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The customer doesn&#8217;t remember the purchase.
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The customer doesn&#8217;t recognize the transaction details on the bank statement (for instance, due to inconsistent <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/transaction-descriptors-in-brief" target="_blank" rel="noopener noreferrer">transaction descriptors</a>).
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The amount on the credit card statement is different from the agreed amount.
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The information on the receipt is incomplete, inaccurate, or hard to read.
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The issuer considers this particular transaction fraudulent.
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<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29514" src="https://assets.shift4.com/wp-content/uploads/2023/06/Understanding-Reasons-Behind-Retrieval-Requests-In-content-1024x576.jpg" alt="Retrieval requests Shift4" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/06/Understanding-Reasons-Behind-Retrieval-Requests-In-content-1024x576.jpg 1024w, https://assets.shift4.com/wp-content/uploads/2023/06/Understanding-Reasons-Behind-Retrieval-Requests-In-content-300x169.jpg 300w, https://assets.shift4.com/wp-content/uploads/2023/06/Understanding-Reasons-Behind-Retrieval-Requests-In-content-768x432.jpg 768w, https://assets.shift4.com/wp-content/uploads/2023/06/Understanding-Reasons-Behind-Retrieval-Requests-In-content.jpg 1200w" sizes="(max-width: 750px) 100vw, 750px" />
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">How to Handle a Retrieval Request</h2>
When the bank asks for information regarding a particular transaction, the merchant must submit additional documentation to help the bank decide whether the transaction is legitimate.
It goes without saying that the information given should be as descriptive as possible to dispel any doubts — in other words, keep things concise and easy to follow.
Here’s a list of what the information that should be provided:
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Cardholder&#8217;s name
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Account number
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IP address
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Merchant details (name, web address, physical location)
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An order confirmation number
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Transaction date, amount, and currency
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Payment card&#8217;s last 4 digits and card brand
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Authorization code
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Description of the products or services purchased
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Date of both the transaction and shipping of a product or a service
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Return/refund policy
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Some of the details mentioned above refer to online sales; however, soft chargebacks are more probable for <a href="https://www.shift4.com/in-person-payments" target="_blank" rel="noopener">card-present transactions</a>.
The explanation is quite simple — merchants offering their products or services online have more ways to communicate with their customers. Sending an email with the purchase confirmation significantly diminishes the risk of retrievals.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Wrapping Up</h2>
The quality of documentation the merchant provides determines resolving the situation in their favor. Time also works for the sake of the merchant. We recommend prompt action (within 10 days) to resolve retrievals and prevent chargebacks.
Note that no response to the retrieval request may turn it into a chargeback with no reversal rights for the merchant and extra costs (much higher than in the case of soft chargebacks).
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Retrieval requests Shift4 graphic of stacked credit cards

Understanding Reasons Behind Retrieval Requests

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OCT (Original Credit Transaction) is a payment method enabling secure, convenient, and (really) fast direct funds transfers to credit or debit cards. You can benefit from payouts when using <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://usa.visa.com/run-your-business/visa-direct.html" target="_blank" rel="noopener noreferrer">Visa Direct</a> or Mastercard Moneysend services.
How do near real-time funds transfers to card-based accounts work exactly? Read on to learn more.
<span style="font-family: var(--heading--font-family); font-size: var(--heading--font-size-h2); font-weight: var(--heading--font-weight); letter-spacing: var(--heading--letter-spacing-h2); background-color: var(--global--color-background); color: var(--global--color-primary);">How Do OCT Payouts Work?
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Making a credit of funds is as easy as putting in the card data, and the <a href="https://www.shift4.com/blog/why-card-security-codes-matter-online-shopping" target="_blank" rel="noopener">CVV</a> — card data is all it takes to complete the money transfer.
To make it even more convenient, the customer can save their data once making the first payout to make the following automatically.
But how does it work from the technical point of view?
The whole transfer process can be described in three steps:
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Entering Card Data: The merchant puts in card data on the merchant&#8217;s website or app and sends a credit request to Shift4 (as they usually do with regular payment requests).
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Submitting Transaction Details: Shift4 instantly sends transaction details to the <a href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener">acquiring bank</a>.
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Receiving Funds: Within 2 business days, money is on the customer&#8217;s credit or debit card.
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In short, funds are &#8220;pushed&#8221; with Visa Direct OCT to a card-based account, thus resulting in a credit of funds to the cardholder&#8217;s account.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Seconds Instead of Two Business Days</h2>
As mentioned above, the standard time frame for receiving funds in the account extends to two business days. However, Visa Direct OCT payouts can be fast. Really fast.
By saying so, we actually mean near-real-time entry in the accounts.
At <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a>, we complete the Visa Direct fast transactions within 5 seconds. You count to 5, and the customer has just received their money.
Every time the merchant makes the payout, the system returns with the information, whether it was a fast or a regular one.
If the money transfer was marked as fast, the customer receives their money within 30 minutes or less. 
What&#8217;s crucial, the card is automatically flagged as &#8220;supporting&#8221; instant payouts, which means that for every future OCT made, the funds will immediately be credited to the eligible card-based account.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Can I Check the Card Status Before Making a Payout?</h2>
Yes, you can. The verification is simple and effortless, and you get the answer on the spot.
How do you do it?
Whenever you need to be absolutely sure the money transfer will be immediate, you can check the specific card status in the customer dashboard — without needing to initiate the payout.
What you need to get prompt system feedback is card data. Once you put the card data in the system, you&#8217;ll get an automatic response clarifying if the card supports instant payouts or not.
If the feedback is positive, the payout can be settled in near real-time.
Knowing that you may either make an instant credit of funds with Visa Direct or choose any other payment method convenient to the end user.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">OCT in a Nutshell</h2>
Beyond discussion, the most significant advantage of using OCT payments lies in reducing processing time. However, there are many more benefits to consider regarding fast payouts.
What you can expect when using Visa Direct payouts is:
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Near Real-Time Money Transfer Speed
Visa Direct fast transactions are very (I mean very) fast, so cardholders can receive funds almost instantly. That&#8217;s obviously up to whether the card supports instant payouts or not. For cards supporting instant payouts, payments are initiated, cleared, and settled within 30 minutes at the most (usually within seconds). Yet, it depends on <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">the issuing banks</a> if the funds are available near real-time or within 1-2 business days.
As the Visa website states: &#8220;Actual funds availability varies by the financial institution. Visa requires some issuers in some countries to make funds available to its cardholders within a maximum of 30 minutes of approving the transaction.&#8221;</li>
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24/7/365 Availability
It doesn&#8217;t matter if it&#8217;s a weekend or a holiday; Visa Direct is on.
With push payment capabilities, frictionless OCT payouts provide convenience and a user-friendly system, thus improving customer experience.
Visa Direct payouts are an efficient and quick way of sending money directly to the customers&#8217; cards at the speed they expect. 24/7/365 days a year.</li>
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Cost-Effective Cross-Border Payments
Fast payouts enable sending money in multiple currencies to recipients in over 200 countries.
3 billion Visa cards, 2 billion bank accounts, and more than 16k financial institutions within the program speak for themselves.
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Simplicity
There&#8217;s no need to provide a bank account number — the card data is all it takes to complete the money transfer.
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Highest Security Standards
Money transfers are made directly by an acquiring bank to an eligible debit or credit card under PCI requirements. No IBAN or BIC numbers are necessary.
Multi-layer compliance, advanced risk control system, and rigorous assessment of business partners uphold the highest security standards.
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Full Control Over Payout Flow
It&#8217;s up to the merchants if they want to make payouts via the merchant’s website or the app. In addition, when choosing to send money via OCT, no intermediary bank charges occur.  
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Easy Payment Integration
Shift4 will guide you through the integration process — hassle-free.
</li>
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Accelerate Fund Transfers with Visa Direct</h2>
Speed them up to minutes or even seconds and lift your payment experience to a new level.
Offer fast, secure and more convenient settlements to your customers 24/7/365.
Have any questions regarding OCT in general or Visa Direct? The Shift4 support team is at your disposal.
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Man making a payment on his smartphone representing the OCT payment method - Shift4

OCT Payment Within Seconds with Visa Direct

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Small code snippets linked to a web application, commonly called webhooks, are used to facilitate communication between two separate systems. Fast, automated, and easy to configure are widely used in online business applications.
Why is it handy to use them? What&#8217;s the link between events and webhooks? And how to configure webhooks to benefit the most?
Read on to find out.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">It All Starts With an Event</h2>
What is an event? It&#8217;s every single change that happens on the merchant&#8217;s account. When any of the predefined event occurs, we create a new event object.
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29356" src="https://assets.shift4.com/wp-content/uploads/2023/04/event-and-webhooks_event-object-screenshot-1024x439.png" alt="event and webhooks event object screenshot" width="750" height="322" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/event-and-webhooks_event-object-screenshot-1024x439.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/event-and-webhooks_event-object-screenshot-300x129.png 300w, https://assets.shift4.com/wp-content/uploads/2023/04/event-and-webhooks_event-object-screenshot-768x329.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/event-and-webhooks_event-object-screenshot-1536x658.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/04/event-and-webhooks_event-object-screenshot-2048x878.png 2048w, https://assets.shift4.com/wp-content/uploads/2023/04/event-and-webhooks_event-object-screenshot-1568x672.png 1568w" sizes="(max-width: 750px) 100vw, 750px" />
What do we mean by en event? Well, it might be a successful charge, a chargeback, a dispute, an updated subscription, a newly created cross-sale offer, and many others. Literally, everything that has happened on the account (example below).
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29357" src="https://assets.shift4.com/wp-content/uploads/2023/04/types-of-events-events-and-webhooks-1024x907.png" alt="types of events events and webhooks" width="750" height="664" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/types-of-events-events-and-webhooks-1024x907.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/types-of-events-events-and-webhooks-300x266.png 300w, https://assets.shift4.com/wp-content/uploads/2023/04/types-of-events-events-and-webhooks-768x681.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/types-of-events-events-and-webhooks-1536x1361.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/04/types-of-events-events-and-webhooks-1568x1389.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/04/types-of-events-events-and-webhooks.png 1580w" sizes="(max-width: 750px) 100vw, 750px" />
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Since all the events are registered, it is easy to access them via the Shift4 API in the web console and track them back step-by-step if necessary.
Yet, it is also possible to synchronize the system with our payment platform, send events to the designated unique URLs, and get automated notifications once the events happen. And it&#8217;s all because of webhooks.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">What Is a Webhook?</h2>
Simply put, it&#8217;s an automated message sent to users any time some predefined event takes place. Or, to be more precise, it&#8217;s an HTTP request (or small code snippets linked to a web application) triggered by an event created in a source system.
Once the event is created in the source site, the data is automatically collected and sent off to a specified URL.
Such automated communication between the source and the destination facilitates and speeds up the information flow, thus allowing users to receive notifications about the events precisely when they occur.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Convenient Webhook Configuration</h2>
The whole process can be completed within the Shift4 account settings. The merchant provides their endpoints (URLs) to Shift4 and receives the webhooks in return.
The key is to maintain and process them accordingly to ensure proper synchronization throughout the entire period of the webhook configuration.
It&#8217;s good to know that each webhook URL can be configured either for a test or live mode.
As the name implies, the test-mode configured URL will receive events created in test mode, whereas live-mode one will respond to events created in live mode.
Once the configuration is completed, our system will call the merchant&#8217;s page with the information about the event every time such an event appears.
When it comes to processing and sending information via webhooks, <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a> is a market leader. Doing so in under a second is standard practice for us. In payments, time is an issue, and there&#8217;s no room for unnecessary delays.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Receiving Webhooks</h2>
Each and every time a new event is created, the Shift4 system sends a webhook to the corresponding configured webhook URL.
The event data is encoded as JSON and sent to the merchant in the request body.
What&#8217;s important it&#8217;s the fact that with webhooks, it is the merchant&#8217;s server that receives the webhook requests.
Therefore, for security reasons, it&#8217;s recommended to only use an event identifier from a webhook request and obtain the remaining data by making a direct request to the Shift4 API (see <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://dev.shift4.com/docs/api#event-retrieve" target="_blank" rel="noopener noreferrer">retrieving an event</a>).
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29358" src="https://assets.shift4.com/wp-content/uploads/2023/04/events-and-webhooks_retrieve-an-event-1024x418.png" alt="events and webhooks retrieve an event" width="750" height="306" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/events-and-webhooks_retrieve-an-event-1024x418.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/events-and-webhooks_retrieve-an-event-300x122.png 300w, https://assets.shift4.com/wp-content/uploads/2023/04/events-and-webhooks_retrieve-an-event-768x313.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/events-and-webhooks_retrieve-an-event-1536x627.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/04/events-and-webhooks_retrieve-an-event-2048x836.png 2048w, https://assets.shift4.com/wp-content/uploads/2023/04/events-and-webhooks_retrieve-an-event-1568x640.png 1568w" sizes="(max-width: 750px) 100vw, 750px" />
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To protect your business from <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.kaspersky.com/resource-center/definitions/replay-attack" target="_blank" rel="noopener noreferrer">replay attacks</a>, it is also advised to record which events were processed and never process the same event twice.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Responding To Webhooks</h2>
When the webhook request has been processed successfully, the returned status code must be 200 HTTP.Otherwise, it is assumed that the request delivery failed. Any other return code is ignored by the Shift4 system and failed webhook requests are resent with an increasing delay between subsequent attempts.
If the situation with the return code remains unchanged after an adequate time, Shift4 will contact the merchant to resolve the issue.
Since events are always delivered in the same order they were created, the others won&#8217;t be sent if one event fails to be delivered.
It results from the fact that delivery of all events for a particular webhook URL is blocked until the one that failed is successfully retried. Simply put, all events need to be delivered in chronological order.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">AWS At Your Service</h2>
When using webhooks, you must use the HTTP unless you&#8217;re using the power of Amazon Web Services, as many of our merchants do.
In that case, you can simply integrate your webhook URL with SQS, SNS, or Amazon Kinesis.
<ul class="ml-[1rem]">
<li>
SQS — <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://aws.amazon.com/sqs/" target="_blank" rel="noopener noreferrer">Amazon Simple Queue Service</a> (SQS) enables sending, storing, and receiving messages between software components at any volume and without losing messages or requiring other services to be available. Set up a FIFO (first in, first out) queue and have us send webhooks to it. That&#8217;s way more secure than sending it through the Internet.
</li>
<li>
Kinesis — With the use of <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://aws.amazon.com/kinesis/" target="_blank" rel="noopener noreferrer">Amazon Kinesis</a> it is easy to collect, process, and analyze streaming, real-time data and get timely insights, thus reacting quickly to new information. Connect webhooks to Kinesis and unleash the power of this fantastic tool.
</li>
<li>
Simple Notification Service — <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://aws.amazon.com/sns/" target="_blank" rel="noopener noreferrer">Amazon Simple Notification Service</a> (SNS) sends notifications in two ways, A2A (Application-to-Application messaging) and A2P (Application-to-Person messaging). While A2A works between serverless applications, A2P lets you send messages to your customers via SMS, push notifications, and email.
Take advantage of the Amazon Simple Notification Service and get email or text notifications as soon as the events occur.
</li>
</ul>
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Events and Webhooks Explained

Friendly fraud is a nerve-wracking term for online retailers. This isn’t surprising when you consider that behind these two words is a genuine customer disputing a transaction. It’s a complicated concept that leads merchants to question whether a loyal customer or a fraudster made the claim.
You need to do everything in your power to reduce the likelihood that customers will dispute legitimate transactions to avoid the costly <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargeback</a> dispute process. Fortunately, there are tried-and-true methods for reducing chargebacks from legitimate customers, saving your company from massive losses.
But, first things first.
<h2>What is Friendly Fraud?</h2>
Friendly fraud happens when a cardholder wrongly requests a chargeback for a legitimate purchase. It can be caused by a customer’s mistake or confusion or the chargeback can be filed on purpose.
The bad news is that friendly fraud is the #1 fraud attack source and it’s expected that by this year it will account for <a href="https://chargebacks911.com/chargeback-stats/" target="_blank" rel="noopener">more than 60% of all chargebacks</a> issued in the United States. According to <a href="https://www.statista.com/statistics/587366/fraud-complaints-amount-paid-in-the-us/" target="_blank" rel="noopener">Statista</a>, in 2021, approximately 5.89 billion U.S. dollars were paid out to online fraudsters.
One of the reasons for this increase is that the adoption of EMV chip cards has made it harder for fraudsters to commit a crime in physical stores, so they have moved to the online world.
<h2>What are the Reasons for Friendly Fraud?</h2>
There are a variety of reasons for friendly fraud. Here are a few examples:
<ul>
<li style="font-weight: 400;">A cardholder files a chargeback when a family member uses the card without their knowledge.</li>
<li style="font-weight: 400;">A customer finds it challenging to understand the descriptor on a bank statement (this is why we highly recommend setting up explicit <a href="https://www.shift4.com/blog/transaction-descriptors-in-brief" target="_blank" rel="noopener">transaction descriptors</a>).</li>
<li style="font-weight: 400;">A cardholder may mistakenly dispute a charge because they forgot about the purchase.</li>
<li style="font-weight: 400;">The cardholder purposefully disputes a transaction because they regret it and want their money back. </li>
<li style="font-weight: 400;">The purchased product doesn’t meet expectations or is defective.</li>
<li style="font-weight: 400;">A customer is attempting to conceal a purchase from a spouse.</li>
</ul>
As you can see, friendly fraud has many reasons, so it’s important that merchants are prepared.
Consider this:
Some customers request chargebacks for personal gain. Determining whether the cardholder is being truthful can be difficult. It may sound harsh, but you must face the fact that some customers play dirty.
The reality is that some consumers unintentionally commit friendly fraud. Even though they have the best intentions, as the name implies — friendly fraud can be committed by “friends” of your business. Despite it sometimes being unintentional, it can still have a damaging impact on online businesses and issuers. For most customers, filing a chargeback is more convenient than contacting the merchant, so you won’t even have a chance to stop it.
<a href="https://chargebacks911.com/chargeback-stats/" target="_blank" rel="noopener">Eight out of ten</a> admit they&#8217;ve filed a chargeback out of convenience. Most of the time, consumers are either unaware (or just don&#8217;t care) that this comes at an additional expense to retailers. As you may know, chargebacks involve more than just the money charged; they also cost the loss of merchandise that has been shipped, the price of shipping the goods or service fees, processing fees, etc. With all of the costs associated, chargebacks should be — without a doubt — a major concern for businesses, especially as their online business starts to scale.
The following are some tips and techniques that will assist you in preventing friendly fraud attacks on your business.
<h2>Payment Solutions Packed With Security Tools</h2>
While it&#8217;s hard to eradicate fraud, you can successfully reduce it by collaborating with a trustworthy payment processor. Before deciding on which payment gateway to utilize for your business, ask about the <a href="https://www.shift4.com/preventing-fraud" target="_blank" rel="noopener">security solutions</a> it offers to ensure that your company is well-protected. Or, if you already have a payment gateway in place, evaluate your existing provider’s security solutions — it may be time to make a change.
Look for a set of anti-fraud tools that score risk based on rules. And be sure to note that it&#8217;s better when the system can be adjusted to a specific industry rather than a static solution with the rules that apply to every business model. Solutions based on standard scoring may block legitimate transactions labeled as suspicious by the system.
Remember that Reason Code 75 — &#8220;Transaction not Recognized&#8221; — has been eliminated in the Visa Claims Resolution. As a result, transactions that customers claim they didn&#8217;t authorize might easily be classified as fraud. The merchant must then provide the necessary compelling evidence.
Overall, your business needs a multi-level risk protection system that can adjust to emerging fraud patterns in real-time to identify activity that swiftly raises a red flag. Advanced verification that requires a fingerprint or facial recognition (which works great on mobile devices) can also help with security.
<h2>3D Secure Authentication</h2>
It&#8217;s becoming more challenging for a customer to dispute an unauthorized transaction thanks to 3D Secure, which verifies a customer&#8217;s card with the bank throughout the purchasing process.
<a href="https://www.shift4.com/blog/3d-secure-2-stronger-authentication" target="_blank" rel="noopener">3D Secure version 2</a> provides frictionless authentication across multiple platforms, including mobile environments. With 3D Secure 2, static passwords are replaced with tokens and biometrics, so authentication occurs while the user is still on the merchant&#8217;s website or app.
A solution like this doesn&#8217;t interrupt the checkout experience for ecommerce customers or app users. As a result, cart abandonment rates are reduced and user experience is improved thanks to the combination of frictionless flow and faster, more secure payments.
<h2>Effective Communication With Customers</h2>
Make sure customers know how to reach you. You can reduce the number of chargebacks for unhappy customers and misunderstandings by providing excellent customer service. In some cases, contacting a customer directly can be beneficial — especially if they don’t recognize a legitimate charge.
When running an eCommerce website, consider making customer service available 24 hours a day, seven days a week. Customers who know they can get answers to their questions at any time are less likely to commit friendly fraud against you.
It’s important to do anything you can to avoid a situation in which a customer dispute escalates to a chargeback. So, contact the customer as soon as you receive a complaint or notice that they intend to file a chargeback. The more responsive you are, the more likely it is that it won’t affect your chargeback ratio.
Moreover, copies of all electronic communications always help in the case of a chargeback, so keep it archived for at least 30 days.
<h2>Return Policy and Delivery Tracking</h2>
Having a delivery-tracking mechanism in place will assist you in determining whether a customer received their order. It&#8217;s also a good idea to collect signatures to show proof of delivery to the cardholder&#8217;s shipping address. When a signature is required, you&#8217;ll have a paper trail that may be useful if you need to submit evidence under the representment process.
Return and refund policies don&#8217;t guarantee that friendly fraud will not occur; however, it&#8217;s important to clearly present such information on your website to ensure that customers are aware of your policies. They can use the chargeback process to get their money back if they can&#8217;t find any information about the returns or refunds.
<h2>Take Control of Your Payments</h2>
The scope of friendly fraud is vast and it&#8217;s a severe problem for online sellers because it&#8217;s challenging to detect and not that easy to fight. In short, friendly fraud refers to a legitimate transaction rather than typical fraudulent behavior, so fraud prevention tools rarely catch it.
Friendly fraud varies by industry, so sticking to tried-and-true solutions and having security tools easily tailored to your specific business are necessary steps to reduce this type of fraud. Otherwise, it can be a significant financial burden on your business.

Woman using a laptop and holding a credit card - friendly fraud - Shift4

Friendly Fraud: How to Get Your Money Back

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Have you ever wondered what happens behind the scenes on your website when your customers click the &#8216;Pay&#8217; button? When a customer uses a credit or debit card to make a purchase, a card authorization request is sent to the issuer to verify the card&#8217;s validity.
Credit card authorization is performed to determine whether the customer has sufficient funds in their card account to cover the transaction. If the customer&#8217;s information is correct and sufficient funds are available in their account, the specified amount is held and deducted from the customer&#8217;s credit limit after issuer approval.
Let&#8217;s delve a little deeper into the process.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">How Does Credit Card Authorization Work?</h2>
When a credit or debit card transaction is made, the merchant sends a request to the acquirer, which is usually done through a credit card processor like <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a>. The acquirer then submits a request to the issuer to review the customer&#8217;s account, examine whether the customer&#8217;s card is valid, and determine whether the customer has sufficient funds to complete the transaction.
If funds cover the sale&#8217;s costs, an authorization hold is placed on the customer&#8217;s account, reducing the credit line by the sale amount. Then the acquirer receives an approval or error code in return. As you might expect, the transaction isn&#8217;t completed if an error code is issued.
As you can see, multiple entities must collaborate to determine whether a transaction is valid during the authorization process. These are cardholder, merchant, <a href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener">acquirer</a>, card schemes, and <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">issuer</a>.
By placing an authorization hold on a credit or debit card transaction, merchants can protect their businesses from fraud or chargebacks. They can temporarily block funds for a transaction to verify it and ensure they will get paid.
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What happens with the authorization hold? In short, it is removed when a merchant captures the charge or when the authorization expires (usually after five days). Blocking funds on the customer’s card gives you time to verify and capture the funds needed to complete a transaction. So, the actual money transaction happens after the authorization and is called capturing. It usually happens automatically.
Authorization can block funds on a customer’s card for up to 7 days for debit cards and 25 days for credit cards. This  gives a merchant time to ensure that the customer’s card is valid.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">What the Process Looks Like When the Card Authorization Fails</h2>
The most common reasons for failed authorizations are technical or financial issues. Most payment processors notify online customers about failures automatically by displaying a certain notification explaining why their transaction wasn’t completed. A merchant can see the cause of the failure, which is identified by its decline code.
<a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/credit-card-decline-codes-for-merchants" target="_blank" rel="noopener noreferrer">Decline codes</a> can differ based on the acquirer. They could appear due to technical issues or problems with the information sent to the processor, such as a wrong configuration, a missing value in an online form, etc. In many cases, financial error codes are related to the customer’s account. If it’s a technical issue, it should be fixed by a merchant or acquirer, depending on the root cause of the problem.
You should only complete the transaction and ship the product if you get an authorization code. A payment scenario that includes card authorization enables merchants to check for potentially fraudulent activity before delivering goods or services. It also helps the merchant avoid issuing refunds by canceling payments before capture and saving time and transaction fees.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Authorization and Capture</h2>
Most merchants use one-phase transactions, which we call sales. A sale is literally a financial transaction. It’s when you authorize, verify, and capture everything simultaneously. What about a two-phased approach?
In a two-phased approach, the transaction is authorized, funds are blocked from the customer, and then funds are captured. The transaction occurs in that capture phase. Here’s how it looks from the customer’s perspective.
Reminder: Card capture releases funds from a customer to a merchant.
A customer is on your website; they want to buy a product or a service that you provide, so they put in the card data and complete the transaction. Products are delivered, everyone’s happy, and they go on their way.
It looks a bit different from the merchant’s perspective, however. If they&#8217;re doing a one-phase transaction or a sale, the flow is as follows:
<ul class="ml-[1rem]">
<li>
The customer is on the website
</li>
<li>
A merchant receives the payment request
</li>
<li>
The transaction goes through
</li>
<li>
The product is delivered
</li>
</ul>
But, there are things that can go wrong in this situation. say the transaction goes through a few seconds later and you receive a fraud score saying it’s fraud. You then decide to issue a refund, but it’s costly, and because it’s fraud, you’ll likely get a chargeback in a few days. This one-phase transaction gives you no time to verify, makes you vulnerable to chargebacks, and costs you refunds.
Here’s how it would go with authorization.
The merchant receives a payment request, authorization happens, funds are blocked on the customer’s bank account, and no money goes through. It gives you time to verify the customer — to review the fraud score (usually 7 days for debit cards and 25 days for credit cards), so you know whether the funds are secured, no chargeback is possible until after capture, and there’s a free refund in case you want to change your mind. In 95% of the cases, this is automated and lasts up to three minutes.
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29344" src="https://assets.shift4.com/wp-content/uploads/2023/04/auth-and-capture-graphic-1024x421.png" alt="card authorization and capture diagram Shift4" width="750" height="308" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/auth-and-capture-graphic-1024x421.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/auth-and-capture-graphic-300x123.png 300w, https://assets.shift4.com/wp-content/uploads/2023/04/auth-and-capture-graphic-768x316.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/auth-and-capture-graphic-1536x632.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/04/auth-and-capture-graphic-1568x645.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/04/auth-and-capture-graphic.png 1668w" sizes="(max-width: 750px) 100vw, 750px" />
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Here’s a breakdown of how it works when you’re using the Shift4 API:
The card is authorized, you then get a fraud score within a few seconds, and the system decides for you, so the scenario can be as follows:
<ul class="ml-[1rem]">
<li>
If the score is 75 — it’s fraud and you will issue a refund without processing the customer’s payments
</li>
<li>
If it’s 50 — you make the decision manually
</li>
<li>
If it’s 0 — it’s captured automatically
</li>
</ul>
Card capture is determined not only by your agreement with your payment service provider (PSP) but also by the type of business you operate. Although the timing of payment collection can vary, most firms and their payment processors manage to do it ahead of schedule because most card authorizations expire in 5–10 days.
<h3>Card Authorization &amp; Capture Example</h3>
You&#8217;re offering a free trial for seven days. You authorize the payment, the customer is testing your service for those seven days, and after that period, the customer decides to go with the product. So, you capture the funds; then the transaction goes through. If it is not okay, you refund them at no cost.
Let’s say you have 1,000 transactions for $20 each, meaning you have $20k in sales. If the transaction fee is $0.02, that makes the total transaction cost $400. There is roughly a 1% chargeback ratio resulting in 10 chargebacks. Ten chargebacks plus the cost of the chargeback, $25, the money that you lose equals $450. Overall costs are $400 + $450 = $850, plus the time, energy, and resources spent on disputing that chargeback.
So, what do you do?
Choosing Shift4 authorization and capture drops your chargeback by 60% to 4 from the initial 10, saving $270. If you go one step further and use our non-invasive 3D secure, the chargeback is reduced to just one, resulting in only $45 of cost, saving you a total of $405.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Wrapping up</h2>
To summarize, Shift4&#8217;s authorization and capture services will improve your business, save money, and keep you safe and secure.
Here are some helpful links if you use Shift4 as your payment processor:
<ul class="ml-[1rem]">
<li>
<a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://dev.shift4.com/docs/api#charge-object" target="_blank" rel="noopener noreferrer">API: charging a card</a>
</li>
<li>
<a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://dev.shift4.com/docs/api#charge-capture" target="_blank" rel="noopener noreferrer">API: charge capturing</a>
</li>
<li>
<a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://dev.shift4.com/docs/charging" target="_blank" rel="noopener noreferrer">Documentation: charging cards</a>
</li>
<li>
<a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/delayed-capture-what-you-need-to-know" target="_blank" rel="noopener noreferrer">Delayed capture</a>
</li>
</ul>

credit card authorization and capture person buying something online

Card Authorization and Capture: What You Need to Know

Chargebacks were created to protect customers&#8217; rights, but that doesn&#8217;t mean their primary goal is to harm merchants. As a merchant, you also have chargeback rights.
Card networks, such as Visa and Mastercard, provide rules and regulations that protect you from fraudulent activity, including friendly fraud and chargeback fraud. You can also protect your business from unwarranted returns and dishonest customers.
<h2>Merchants’ Chargeback Rights — What You Need to Know</h2>
Even though the main goal of <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargebacks</a> is to protect customers, this protection isn’t unconditional. It means that customers must follow specific procedures. In other words, they must attempt to dispute the transaction with the merchant before filing a chargeback.
When the <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">issuer</a> can’t resolve the problem, they can ask the customer to prove their attempts to settle with the merchant.
However, there are numerous factors to consider to improve the security of your business. Continue reading to learn what matters most from a business standpoint regarding merchant chargeback rights.
<h3>Reason Codes</h3>
Reason codes are attached to chargeback notifications and provide insights into why the chargeback was issued. Customers must give a reason for filing a chargeback; with this information, you’ll know what you can do and what kind of evidence you need to provide to the issuing bank. Reason codes also help you decide whether investing in a dispute will be worthwhile.
Note that several reason codes require cardholders to contact the merchant before filing a chargeback to resolve the issue.
<h3>Late Delivery Returns</h3>
Suppose an item is delivered after the agreed delivery date. In that case, the customer must return the merchandise before filing a chargeback — a method like this shields the retailer against losses brought on by mistakes made by the delivery service.
<h3>Purchase Price Only</h3>
Customers are limited in their chargeback amounts. When a cardholder issues a chargeback, it can be done for the total amount of the transaction or a partial charge. The chargeback can never exceed the original transaction amount. Whether it’s a one-time chargeback or partial chargebacks added together, the chargeback totals can’t exceed the original transaction amount.
However, there might be an exception if the transaction was made in foreign currency and the exchange rate has changed since the purchase was made.
<h3>15-Day Waiting Period on Returns</h3>
Before approving a chargeback, issuers need to wait 15 calendar days, beginning from the moment the customer returns an item. The only exception is when the 15-days period exceeds the chargeback filing deadline.
This 15-day window offers merchants more time to file a refund and avoid the chargeback issue.
It’s also important to note that merchants can request product returns when customers initiate a refund or a credit card chargeback.
<h3>No Cashback Transactions</h3>
Another thing you should be aware of as a merchant is that chargebacks can’t be filed for a cashback amount received from a debit card transaction.
<h3>The Right of Representment Process</h3>
Contesting a chargeback is one of the most essential rights of a merchant. You have the right to fight chargebacks and you need to respond to them formally. If you work with a reliable payment processor, they will provide you with tools to get you through the dispute process smoothly.
The first step you’ll typically need to take is completing a form in your merchant dashboard and submitting it by a specific deadline.
It’s important to gather as much evidence as possible. Ensure that you collect specific information and keep transaction records — everything that could help you win the dispute.
Remember that disputing a chargeback may require a high investment of resources, which may not be profitable. So, it’s a good idea to determine a minimum transaction value that would be worthwhile to dispute.
<h3>Chargeback Arbitration</h3>
When the issuer&#8217;s decision is made in favor of the customer, the bank files a pre-arbitration chargeback to the merchant. You can then decide whether to accept the decision or appeal to the card network to review the case.
Before deciding to appeal a decision, do a cost-benefit analysis. It might be more costly to appeal than to refund the transaction. Think twice, especially when requesting pre-arbitration (reintroducing the chargeback). It isn&#8217;t a good idea if the process cost exceeds the purchase value. The pre-arbitration process should be reserved for high-value transactions.
<h2>Wrapping Up</h2>
As a merchant, you have rights when it comes to chargebacks, so make sure you understand them all. How does it benefit you? First and foremost, merchant chargeback rights can help you prevent severe losses for your business.
Another way to avoid losses is to include a top-notch fraud prevention strategy in your everyday activities. Make sure the payment processor you work with provides <a href="https://www.shift4.com/preventing-fraud">anti-fraud tools</a> with machine learning, AI-based solutions, and an efficient chargeback disputing mechanism. 
Finally, maintaining high-quality customer service and a robust refund policy is also helpful, so always try to talk to your customers first to avoid fighting chargebacks later. If your discussion isn’t successful, weigh the pros and cons before taking additional steps.

stack of credit cards representing credit card chargebacks - Shift4

Credit Card Chargebacks: Merchants’ Rights

Every day, fraudsters invent and implement threats to prey on your business. The COVID-19 downturn worsened the situation causing dynamic fraud growth and posing even more danger to legitimate companies.
It&#8217;s high time to prepare yourself for an anti-fraud battle to prevent fraud attacks and protect your business. 
<h2>Why Do Fraudsters Commit Fraud?</h2>
Beyond the obvious financial motivation, it&#8217;s exceedingly simple why fraudsters commit fraud: because they can. It&#8217;s effortless (relatively), and they may feel (and in most cases remain) anonymous and can avoid severe consequences.
Fraudsters are opportunistic and take advantage of any flaws in eCommerce security, technical issues, negligence, or ignorance. Fraud management is a weighty matter. It requires awareness, attention, and appropriate measures and tools.
It&#8217;s an ongoing, looped process involving monitoring, analysis, detection, making decisions, and implementing conclusions based on fraud cases.
<h2>Types of Fraud </h2>
Knowing what kinds of fraud your business should expect is the first step in the anti-fraud battle.The most common types of fraud are: 
<h3>Credit Card Cracking or Testing</h3>
In other words: stealing credit card data. In this form of fraud, the fraudster steals or buys stolen credit card data to make purchases.
The ultimate victim is the merchant, who must refund the fraudulent payment, not to mention the cost of the product or service and possible bank chargeback fee.
Such procedures are relatively low-risk and rather insignificant. However, imagine the final impact on your bottom line once such attempts are automated and massive. 
<h3>Account Takeover Fraud or Phishing</h3>
Fraudsters are real aces at tricking customers into sharing their personal details and overtaking their accounts — this is known as <a href="https://www.phishing.org/what-is-phishing" target="_blank" rel="noopener">phishing</a>.
As the use of social media becomes more popular, it&#8217;s important to be aware that hacking social media accounts can open doors to stealing a customer&#8217;s personal information.
Such access allows fraudsters to make unauthorized purchases, change shipping details, use gathered funds, and access other users&#8217; accounts.
<h3>Refund Fraud</h3>
Refund fraud is another level of deception. Fraudsters use stolen credit card data to initiate purchases. Then, they claim that the purchase was accidental and request a refund from the merchant while asking the merchant to use an alternative payment method. The merchant issues a refund, but since the original credit card was not refunded, the whole amount is still due to the proper cardholder. 
<h3>Affiliate Fraud</h3>
Affiliate fraud refers to fraudulent or dishonest activity conducted to generate commissions from an affiliate marketing program.
In layman&#8217;s terms, <a href="https://www.investopedia.com/terms/a/affiliate-fraud.asp" target="_blank" rel="noopener">affiliate fraud</a> includes any activities explicitly forbidden under the terms and conditions of an affiliate marketing program.
<h3>Chargeback Fraud or Friendly Fraud</h3>
<a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">A chargeback</a> occurs when a credit card provider demands a retailer to refund a disputed or fraudulent transaction. Chargeback fraud is when a refund is unjustified and aims to embezzle money from the merchant.
In a nutshell, due to the chargeback process, the merchant is responsible for refunding the purchase amount to the issuing bank.  
<h3>Interception Fraud</h3>
This type of fraud seems legitimate until the purchase confirmation. After making a purchase, fraudsters contact the merchant&#8217;s customer care or delivery provider and change the delivery address to take over the parcel.
<h3>Triangulation Fraud</h3>
Triangulation fraud is one of the most complicated fraudulent tactics, but despite its complexity, it is still on the rise.
Triangulation fraud involves three parties: the customer, the merchant, and the “middleman.” The middleman is responsible for setting up the marketplace operation.
Triangulation fraud occurs when a legitimate customer purchases from a third-party marketplace run by the middleman (who usually offers goods at very competitive prices). Then, the middleman buys appropriate goods to fulfill the order from a legitimate merchant using stolen credit card data and the shipping information of the original customer. As a result, the customer is shipped the product by the merchant, but the money is kept by the fraudster.
<h2>An Automated Threat: Bots </h2>
Some fraud attempts may be run by bots — programs or applications designed to run automated, repeated tasks. 
A benefit of bots is their speed. They can perform tasks much more quickly than a human. That said, a bots speed is simultaneously an advantage and an inconvenience. This speed and automation means that bots — if used for malicious purposes — can do serious harm to businesses, destroy their reputation, and affect their bottom lines. 
<h2>Business Practices to Combat Fraud </h2>
Now that you have an understanding of the types of fraud that could impact your business, it’s important to understand that there are things that can be done to prevent it. 
The battle against fraud is an ongoing process. Here are a few tips to incorporate into your business practices to prevent fraud:
<ul>
<li style="font-weight: 400;">Constantly secure and monitor any sensitive data you keep on file, such as credit card data, shipping addresses, and IP addresses.</li>
<li style="font-weight: 400;">Stay focused and attentive. Pay attention to every abnormal behavior made by your customers, as these may be the first sign of a fraud attempt.</li>
<li style="font-weight: 400;">Be conscious of any false declines or false positives falling into identity, structural, or technical buckets. Any issues with outdated credit cards or inaccurate shipping information should activate a warning light, as they may cost you a fortune. </li>
<li style="font-weight: 400;">Support your business with tools and solutions based on artificial intelligence and machine learning to analyze historical and live data and predict outcomes or make sure your payment gateway is equipped with such tools. </li>
</ul>
<h2>Anti-Fraud Tools You Should Adopt</h2>
<img decoding="async" loading="lazy" class="size-large wp-image-29308 aligncenter" src="https://assets.shift4.com/wp-content/uploads/2023/04/Anti-fraud-tools-1024x660.jpg" alt="Graphic showing a padlock, credit card, and the world - anti-fraud security concept - Shift4" width="750" height="483" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/Anti-fraud-tools-1024x660.jpg 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/Anti-fraud-tools-300x193.jpg 300w, https://assets.shift4.com/wp-content/uploads/2023/04/Anti-fraud-tools-768x495.jpg 768w, https://assets.shift4.com/wp-content/uploads/2023/04/Anti-fraud-tools-1536x990.jpg 1536w, https://assets.shift4.com/wp-content/uploads/2023/04/Anti-fraud-tools-1568x1011.jpg 1568w, https://assets.shift4.com/wp-content/uploads/2023/04/Anti-fraud-tools.jpg 1920w" sizes="(max-width: 750px) 100vw, 750px" />
In addition to incorporating the recommended business practices above to prevent fraud, it’s important to also equip your business with proper AI and machine learning tools and solutions to make it less arduous.
The following tools will help you dodge obstacles and run your business efficiently with minimal fraud. 
<h3>Email Verification or CAPTCHA</h3>
CAPTCHA is an easy (and important) way to avoid automated massive fraud attacks. It stands for Completely Automated Public Turing test to tell Computers and Humans Apart.
The system helps protect you from spam and password decryption by asking your subscribers to complete a simple test that proves they are humans and not a computer trying to break into a password-protected account.
Many websites use <a href="https://support.google.com/a/answer/1217728?hl=en" target="_blank" rel="noopener">CAPTCHA</a> to eliminate the risk of unauthorized access entry. Such a shield is crucial when dealing with sensitive information like credit card data. It helps block bot attacks, thus protecting merchants against massive losses.  
<h3>3D Secure 2</h3>
<a href="https://www.shift4.com/blog/3d-secure-2-stronger-authentication" target="_blank" rel="noopener">3D Secure 2</a> (3DS) is an authentication protocol for online card payments. This extra security layer in your checkout makes online shopping much safer, thus building company credibility and improving brand loyalty.
The sophisticated technology behind 3DS compares over 100 data points to confirm that the buyer is the actual cardholder. Without a doubt, it&#8217;s a state-of-the-art online payment authentication system that significantly enhances transaction safety and thereby remarkably improves customer experience.
<h3>Capture</h3>
<a href="https://www.shift4.com/blog/card-authorization-and-capture" target="_blank" rel="noopener">Capture</a> is the additional legally binding step that secures payment once it has been authorized. The transaction amount doesn&#8217;t reach the merchant account and funds are not captured until they confirm that the transaction has been completed. 
<h3>Card Security Codes (CVV codes)</h3>
<a href="https://www.shift4.com/blog/why-card-security-codes-matter-online-shopping" target="_blank" rel="noopener">Card security codes</a> (otherwise known as CVV codes) are the three- or four-digit numbers customers may find on the front or back of their cards. 
The purpose of the CVV code is to protect both the card owner and the merchant against fraud, theft, or unauthorized transactions.
Fraudsters won&#8217;t know the code if they don’t have the physical card in front of them, which means the transaction is much more likely to be legitimate if the CVV code has been confirmed.
<h3>Fraud Blacklists</h3>
<a href="https://chargebacks911.com/fraud-blacklists/" target="_blank" rel="noopener">A fraud blacklist</a> collects fraudulent historical activities containing fraudsters&#8217; personal information, used credit card data, IP addresses, and more. Creating a blacklist can help merchants avoid fraud by blocking dodgy transactions from credit cards that have been used for fraudulent activities before.
Blacklists work by comparing current transactions against previously fraudulent transactions on the list. If a match is found, the transaction is immediately declined.
It’s important to note that the effectiveness of these lists is limited to each individual merchant&#8217;s database unless shared with others.
<h3>Address Verification Service (AVS)</h3>
AVS automatically checks the transaction billing address against the address registered with the bank. It visibly reduces the risk of fraudulent transactions; however, it isn&#8217;t 100% accurate.
In some cases, even if the billing address matches the one the bank has on file, the transaction could be declined or approved. So this tool should be used in combination with other preventative measures.
<h3>Reliable Payment Provider</h3>
It’s important to ensure that your payment provider is security-driven and always has your back when it comes to preventing fraud. A reliable payment provider will be able to precisely define fraudulent transactions and immediately flag them, thus eliminating the threat and possible losses.   
<h2>Wrapping Up</h2>
Data security greatly impacts your bottom line, not to mention your business&#8217; reputation.
Although fraud represents a substantial source of loss for merchants, most underestimate how much is really on the table. According to the <a href="https://www.ecb.europa.eu/press/pr/date/2021/html/ecb.pr211029_2~aa750b3a1c.pl.html" target="_blank" rel="noopener">ECB&#8217;s latest report</a>, the total value of fraudulent transactions involving cards issued in SEPA amounted to €1.87 billion in 2019, and, despite the overall slight decline of fraudulent transactions, the number of fraud attacks for CNP transactions is still on the rise. 

Figures for the U.S. are also alarming. Despite slow growth in card fraud losses, <a href="https://www.insiderintelligence.com/content/spotlight-us-card-payment-fraud-losses-forecast-2022" target="_blank" rel="noopener">totals are estimated to reach $13.73 billion by 2024</a> due to skyrocketing fraud for card-not-present transactions.  
Unfortunately, there is no such thing as a tool that can prevent fraud 100% of the time. So, in order to maximize the efficiency of your anti-fraud and anti-chargeback approach, it’s a good idea to combine multiple automated processes with human involvement and monitoring.
Though pre-transaction prevention is challenging and requires beyond-average involvement, you should never set it aside. The key to success is to stop fraud before it happens.
The good news is that you don&#8217;t have to invest a fortune in security. A reliable and security-focused payment provider like Shift4 will have your back and provide you with all the necessary <a href="https://www.shift4.com/preventing-fraud" target="_blank" rel="noopener">anti-fraud tools</a>.

How to Protect Your Business from Fraud

Once you draw customers to your eCommerce website, your ultimate goal is getting them to complete a purchase, so you need to design the ideal path to smoothly steer them through your product pages and to the payment page. Often, a single snag in this process is enough to make customers leave your site — we call this checkout abandonment.
This one mistake can cost you a lot and hurt your bottom line. One of the leading causes of checkout abandonment is an overly complex checkout process; naturally, a complicated payment process discourages customers from completing the transaction.
<h2>The Difference Between Checkout Abandonment and Cart Abandonment</h2>
Checkout abandonment is when customers go through their journey, add items to their cart, and are ready to pay — but drop off the site after entering their payment information at checkout. This can occur whether the customer is using a registered account on your site or checking out as a guest.
Cart abandonment is similar to checkout abandonment. The main difference is the stage at which the customer leaves. Cart abandonment can occur at any stage after items have been added to the cart, but before checkout.
<img decoding="async" loading="lazy" class="aligncenter wp-image-29288" src="https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-abandonment-graphic-1.png" alt="Cart abandonment vs. Checkout abandonment infographic Shift4" width="2000" height="928" srcset="https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-abandonment-graphic-1.png 2708w, https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-abandonment-graphic-1-300x139.png 300w, https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-abandonment-graphic-1-1024x475.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-abandonment-graphic-1-768x356.png 768w, https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-abandonment-graphic-1-1536x713.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-abandonment-graphic-1-2048x951.png 2048w, https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-abandonment-graphic-1-1568x728.png 1568w" sizes="(max-width: 2000px) 100vw, 2000px" />
If you’re wondering how high your checkout abandonment rate is, you can determine the rate by using the following calculation:
Total Number of Completed Transactions ÷ Total Number of Initiated Transactions = 
Checkout Abandonment Rate
To calculate the percentage, subtract the number you obtained from the calculation above from one and multiply by 100.
For example, if you had 100 completed transactions and 120 initiated transactions, your calculation would be as follows: 
100 ÷ 120 = .833
1 &#8211; .833 = .167
.167 x 100 = 16.7%
Since checkout abandonment happens after a customer visits the cart, the rate at which it happens should be lower than the cart abandonment rate.
<h2>The Most Common Reasons Why Customers Abandon the Checkout</h2>
The last steps in the checkout process are crucial for finalizing sales, and there are several studies on the reasons for checkout abandonment. Below is a list of the top reasons for checkout abandonment.
<h3>1. Complex Checkout Process</h3>
The more steps in the checkout process and the longer it takes, the greater the chance for customer frustration, which often leads to checkout abandonment. According to the Baymard Institute, the average <a href="https://baymard.com/blog/checkout-flow-average-form-fields" target="_blank" rel="noopener">checkout flow has 5.08 steps</a>, so the goal should be a checkout flow of less than five steps.
What can help here is optimizing the customer journey by reducing the number of steps to checkout and cutting off any distractions, including non-related links, social buttons, graphic elements, etc.
Keep customers on the same page during the entire checkout process. Don’t redirect them to an external service to pay, as it may severely hurt conversion. It’s also essential to offer a “guest checkout” option, especially for one-time buyers that want to finish the process quickly.
<h3>2. Slow-Loading Pages</h3>
A study by <a href="https://blog.radware.com/applicationdelivery/applicationaccelerationoptimization/2013/05/case-study-page-load-time-conversions/" target="_blank" rel="noopener">Radware</a> shows that a two-second delay in load time during a transaction results in an 87% cart abandonment rate, as this kind of delay fails to build the user’s trust or confidence in the site.
Online shoppers are impatient, so avoiding any load time delays is important — especially on mobile, as people expect a quick shopping experience on the go. It’s wise to simply remove anything that can harm the checkout page’s loading speed.
A “remember me” option in the checkout can also speed up the process. It allows repeat customers to skip typing in their credit card number each time they want to buy something. Think about how convenient it would be for them to pay in just one click without having to input their credit card information.
<h3>3. Checkout Errors and Downtimes</h3>
Checkout errors, especially when they appear frequently, are a significant cause of checkout abandonment. When these kinds of errors occur, it’s common for customers not to bother proceeding. When they lose trust in your service in this way, you can be sure those users will likely go elsewhere to buy similar products.
To avoid checkout errors, test and monitor your website regularly. Check everything twice and edit and proofread your payment pages to ensure that they’re perfect and error-free. Also, make sure your current payment provider is a reliable partner. If it reports frequent downtime, you may lose revenue due to unplanned outages.
<h3>4. Checkout Security Concerns</h3>
Statistically, around <a href="https://baymard.com/lists/cart-abandonment-rate">20% of customers</a> will abandon their checkout if they feel unsure or unsafe because of the webpage they&#8217;re on. They won&#8217;t enter their credit card details if something feels wrong when they&#8217;re on the payment page.
<img decoding="async" loading="lazy" class="size-large wp-image-29236 aligncenter" src="https://assets.shift4.com/wp-content/uploads/2023/03/checkout-abandonment-blog-02-1024x576.png" alt="HTTPS vs HTTP in a website URL Shift4" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/03/checkout-abandonment-blog-02-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/03/checkout-abandonment-blog-02-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/03/checkout-abandonment-blog-02-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/03/checkout-abandonment-blog-02-1536x863.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/03/checkout-abandonment-blog-02-1568x881.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/03/checkout-abandonment-blog-02.png 1601w" sizes="(max-width: 750px) 100vw, 750px" />
It’s imperative that customers feel safe on your website, especially when they pay. Therefore, you need to reassure them that their sensitive data is well protected during checkout. Here are a few ways you can do this:
<ul>
<li style="font-weight: 400;">Make sure your website has a high-encryption security certification — customers want to know that you have security tools and solutions in place.</li>
<li style="font-weight: 400;">Outsource your payment process to a trusted payment provider with PCI compliance and <a href="https://www.shift4.com/preventing-fraud" target="_blank" rel="noopener">fraud prevention tools</a> in place. </li>
<li style="font-weight: 400;">Add logos from leading organizations that people will recognize and trust as well as card brand logos.</li>
<li style="font-weight: 400;">Review the design of your payment pages, as poorly designed pages can raise suspicions. When customers end up on a payment page that has a completely different design than your online store, it can cause hesitation.</li>
<li style="font-weight: 400;">Improve your business’s credibility by posting testimonials and reviews on your website.</li>
</ul>
<h3>5. Hard-to-Understand Error Indicators</h3>
Communicate errors clearly and avoid ambiguous messages that create confusion — such as “some fields are incorrect.” Users may misinterpret instructions on the payment form, so you want to be as clear as possible. One way to simplify things is by matching the credit card field sequence to the physical card sequence — this makes entering data more intuitive for the customer.
<img decoding="async" loading="lazy" class="wp-image-29237 size-full aligncenter" src="https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-example.png" alt="Checkout screen with credit card number entered into the field Shift4" width="680" height="428" srcset="https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-example.png 680w, https://assets.shift4.com/wp-content/uploads/2023/03/Checkout-example-300x189.png 300w" sizes="(max-width: 680px) 100vw, 680px" />
<h3>6. Declined Credit Card</h3>
Declined transactions also prevent users from completing a purchase on a website. Make sure the payment form design and all the information are as straightforward as possible to reduce the number of mistakes a user can make when entering their payment data which could result in a declined transaction.
Also, ensure that your payment provider delivers a fraud system with dynamic rules that adjust quickly to specific industries and situations so that it won’t cause falsely rejected payments. You should have an option to proactively manage fraud rules to keep your finger on the pulse of the checkout process.
<h4>Credit Card Checkout UX at the Forefront</h4>
One of the Baymard Institute’s <a href="https://baymard.com/blog/current-state-of-checkout-ux" target="_blank" rel="noopener">checkout studies</a> evaluates the user experience (UX) for many leading ecommerce websites and shows that only 23% of sites are rated from “good” to “perfect”, while 25% of sites are rated “poor”.
<img decoding="async" loading="lazy" class="size-full wp-image-29238 aligncenter" src="https://assets.shift4.com/wp-content/uploads/2023/03/UX-performances.png" alt="Benchmark UX performances of credit card forms ranging from poor to perfect Shift4" width="873" height="273" srcset="https://assets.shift4.com/wp-content/uploads/2023/03/UX-performances.png 873w, https://assets.shift4.com/wp-content/uploads/2023/03/UX-performances-300x94.png 300w, https://assets.shift4.com/wp-content/uploads/2023/03/UX-performances-768x240.png 768w" sizes="(max-width: 873px) 100vw, 873px" />
The same study also reveals that the average site has 31 preventable usability issues in its checkout flow, so there’s still a lot of room for improvement.
Stick to the rule that the more steps a transaction has, the lower your chances of converting an almost-buyer into a customer. Analyze your purchase funnels regularly to identify areas that may keep your customers away and remember that not every customer abandons the checkout process for the same reason.
<h2>Checkout Abandonment: Wrapping Up</h2>
You can reduce and overcome checkout abandonment by providing customers with a streamlined payment process based on top-notch user experience. Choose a payment provider that offers best-in-class embedded payments with optimized checkout and <a href="https://www.shift4.com/blog/payment-api" target="_blank" rel="noopener">payment APIs</a> that allow you to design the entire payment process the way you want.
Even though it’s impossible to ensure 100% of customers complete a purchase, you now know what you can do to improve your checkout experience. It’s important to reduce the steps it takes to make a payment. ​​This gives customers less time to reconsider their purchase and creates a better user experience.
Are you looking for a payment provider with a user-friendly checkout and payment system optimized to maximize conversions? Go ahead! Test the Shift4 <a href="https://www.shift4.com/online-payment-methods" target="_blank" rel="noopener">checkout process</a> or contact our sales team for more information.

Checkout Abandonment: What It Is and How To Reduce It

Do you know what makes a good payment API that ensures your payment experience runs smoothly? Read on to learn how to select one.
APIs are used to retrieve data by the majority of modern technology-based enterprises today, as such, they automate critical workflows, offering vast possibilities
As an API works as a middleman between two machines (e.g., different applications), it makes online and mobile transactions much quicker and simpler. You get direct access to the payment-related functions that request payment-card authentication, authorization, fund captures, and refunds — just to name a few.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Payment APIs in Action (For Non-Technical People)</h2>
The user performs an action (an API call) that instructs the application on what to do. The application then uses the API to request that the web server complete the action (makes a request). Finally, the user receives the necessary information.
To shed more light on the process, let&#8217;s look at how a payment API works without using technical jargon.
1. A customer visits your website or downloads your mobile app and decides to purchase a product or service. They need to enter their credit card details on a checkout page.
2. The information is sent to the payment API service along with the transaction details.
3. The card details are sent via card scheme networks to the cardholder’s <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">issuing bank</a> for authorization.
4. The card issuer verifies the card information, such as confirming that the cardholder&#8217;s account has sufficient funds for the transaction and that the card has not been reported lost or stolen.
5. If everything is in order, the issuing bank authorizes the requested amount and debits the cardholder&#8217;s account.
6. The API response returns the authorization results to you and the cardholder.
7. The <a href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener">acquirer</a> receives the funds from the card scheme network and deposits the money into your merchant account.
8. You can transfer those funds to your business account automatically.
Now that you understand the role of an API in payment processing let&#8217;s go over the key factors to consider when selecting a payment API for your checkout process.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">1. Flexibility</h3>
Flexibility means the ability to create a payment flow based on your programming language, business logic, use cases, and more. This approach allows you operational efficiency and complete control over the payment process.
Examine the services provided by the API to assist you in managing your payments.  For example, if you intend to accept recurring payments, ensure that you can create unlimited plans with different billing cycles or pricing tiers.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">2. Feature-Rich</h3>
It&#8217;s critical to simplify the entire process, from integrating the payment system into your website or app to streamlining the purchasing process for customers. You can design the flow to meet your customers&#8217; expectations with robust APIs.
Clear documentation, a set of <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/events-and-webhooks-explained" target="_blank" rel="noopener noreferrer">webhooks</a> for all payment events you need, and an easy-to-follow API structure, will make it easy to handle any integration to meet your business needs. Setting up an account and starting to make API calls should be simple. You can run and accept cards within minutes if the system is well-designed.
Examine the performance of features that have an impact on payment processing speed. Is it possible to bundle multiple calls into a single API request? Or is there a webhook system with automatic exponential back-off retries? Make sure you get a response in milliseconds—delays aren&#8217;t tolerated in payments. Check to see if the payment processor you use can handle the load.
You should pay attention to the user experience. Ensure a simple interface for a complicated process with smart responses for end users on your checkout page.
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29409" src="https://assets.shift4.com/wp-content/uploads/2023/03/Good-Payment-API-IN-CONTENT-1-1024x577.jpg" alt="Payment API from Shift4 graphic showing a possible payment API flow" width="750" height="423" srcset="https://assets.shift4.com/wp-content/uploads/2023/03/Good-Payment-API-IN-CONTENT-1-1024x577.jpg 1024w, https://assets.shift4.com/wp-content/uploads/2023/03/Good-Payment-API-IN-CONTENT-1-300x169.jpg 300w, https://assets.shift4.com/wp-content/uploads/2023/03/Good-Payment-API-IN-CONTENT-1-768x433.jpg 768w, https://assets.shift4.com/wp-content/uploads/2023/03/Good-Payment-API-IN-CONTENT-1.jpg 1200w" sizes="(max-width: 750px) 100vw, 750px" />
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">3. Security</h3>
Most processes, including security, can be automated. APIs simplify <a href="https://www.shift4.com/blog/protect-business-from-fraud" target="_blank" rel="noopener">managing fraud</a> in real-time and accepting payments while ensuring authentication and compliance.
When processing credit cards and sensitive data, you must ensure that the transactions are highly secure and that the entire payment process on your site complies with PCI standards. Check to see if your payment API is secured with an encryption mechanism.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">4. Sandbox Mode</h3>
You can test the API without implementing the payment solution on your site if a payment provider offers a sandbox environment. You&#8217;ll get to know the API by going through the entire payment process and seeing how it works from the customer&#8217;s perspective.
The testing environment is identical to the production platform and you can find simulated card-scheme responses. You may need to generate some test data using the API and make requests with test card numbers to simulate charges, validation errors, disputes, and more.
Testing the checkout page with testing credentials before you go live is the best way to see which payment solution or scenario works best for your use case.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">5. Clear Documentation</h3>
Another thing that characterizes a good payment API is extensive <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://dev.shift4.com/docs" target="_blank" rel="noopener noreferrer">documentation</a> with clear and concise instructions designed for developers by developers. You need excellent and public documentation with clear examples and solutions for the provided functionality.
Remember that reputable processors provide well-written documentation on their websites, with every method and field explained in human language rather than technical jargon. Having guides that include practical examples and use cases is also beneficial. Look for comprehensive guides that will walk you through the payment system and integration issues.
You need complete reference documentation that is updated whenever changes are made to the API. If the API is poorly described, it should set off an alarm in your head — it’s all about payments.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">6. Low Failure Rate</h3>
Another consideration for a payment API is stability. Knowing that you can accept and manage mass-volume transactions without interruptions or surprises is comforting. Make sure the payment API is always accessible — you need it to be up and running when your customers make payments on your website.
Examine the amount of time the API is operational and look for a payment platform with near-zero downtime.
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<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">7. Responsive Support</h3>
This is one of the most important but often overlooked factors. Responsive support can do wonders for your business.
Responsive support is equally as important as a robust system. If things go well, you won&#8217;t need it at all, but it&#8217;s good to know it&#8217;s there. Knowing you can follow up on your payments and take immediate action if there are any problems gives you peace of mind.
When running an online business, you need someone to assist you immediately if something goes wrong with your website or app payments. Make sure that a credit card payment provider guarantees that your company will receive assistance as soon as a problem arises.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Choose Payment APIs That Meet Your Needs</h2>
When you compare payment providers&#8217; APIs, you&#8217;ll notice that each is slightly different. So, you&#8217;ll need to know what&#8217;s most important to you in order to choose the best one for your business. Also, remember that there&#8217;s a lot you don&#8217;t need. With this in mind, consider the main functionalities required to meet your company&#8217;s needs — this will help you make a better decision.
Using a payment API, you may manage subscriptions, take payments, and track user accounts. Before choosing the payment provider with the finest payment API for your project, consider all the above factors.
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Payment API from Shift4 graphic showing cloud computing

Features That a Great Payment API Should Have

According to estimates for 2021, over 2.14 billion people worldwide were expected to <a href="https://www.statista.com/statistics/251666/number-of-digital-buyers-worldwide/" target="_blank" rel="noopener">buy goods and services online</a>. Given the enormous volume of credit card transactions taking place on the internet, it&#8217;s important to know how to increase online <a href="https://www.shift4.com/blog/payment-security-everything-you-need-to-know-to-protect-your-business" target="_blank" rel="noopener">payment security</a> to protect your customers and your business.
<h2>What Is a Card Security Code (CSC)? </h2>
As the name implies, a card security code (CSC) is a security feature placed on a credit card, complementary to the credit card number. It&#8217;s one of the most fundamental weapons in an anti-fraud struggle that every merchant running an online business should equip themselves with. 
Why do we refer to online businesses? Because, as a rule, a card security code is necessary for card-not-present (CNP) transactions only, where it plays a crucial role in the authentication of the purchase. 
<h2>Where to Find Your Card Security Code?</h2>
Depending on the <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">credit card issuer</a> and network, you may find it on either the back or front of your credit card. It&#8217;s worth noting that your CSC won&#8217;t be embossed or engraved like the card number. 
Look for the three-or-four-digit flat-printed number. The most popular card networks — Visa and Mastercard — use a three-digit code printed on the back of the card, while American Express uses a four-digit code visible on the front face of the card above the card number.
<h2>CVV2, CVC2, CSC, or Simply CID?</h2>
Which abbreviation is correct? All of them are accurate since it depends on the card network and their proprietary name for the card security code.
Visa&#8217;s terminology describes the code as a Card Verification Value 2 (CVV2), Mastercard uses the term Card Validation Code 2 (CVC2), and American Express uses the name Card Identification Number (CID).
In a nutshell, it doesn&#8217;t matter what we call it. What matters is that these three-or-four-digit numbers visibly increase the security of online, CNP transactions and reduce the risk of potential chargebacks.
<h2>What Is the Purpose of a Card Security Code?</h2>
Since it&#8217;s impossible to physically swipe a card when shopping online, securing a transaction with the card security code is a reasonable alternative allowing the merchant to identify and verify the cardholder. 
These three-or-four-digits make online purchases more <a href="https://www.shift4.com/secure-technology" target="_blank" rel="noopener">secure</a>. A typical credit card holds three information fields:
<ul>
<li style="font-weight: 400;" aria-level="1">Bank card number</li>
<li style="font-weight: 400;" aria-level="1">Signature magnetic strip</li>
<li style="font-weight: 400;" aria-level="1">Card security code (CSC) </li>
</ul>
The CSC is vital when it comes to online shopping. It&#8217;s the key to the cardholders&#8217; money; therefore, they should keep it to themselves only. The code confirms that the person on the other end of a transaction is in physical possession of the card being used. Needless to say, the cardholder should be the sole person with access to the code.
<h2>When Is the Code Necessary?</h2>
The customer has to enter their CSC at checkout when confirming CNP transactions. Once the customer provides the code, it&#8217;s encrypted during checkout to confirm that the buyer can use this particular credit card. 
Although lots of credit card data is available online, it’s usually just electronic data, not physical cards. This means fraudsters lack the particular cards&#8217; security codes. Since merchants do not keep CSCs on file, there&#8217;s no risk of their breach, even in the event of cards&#8217; data leakage. 
Thus, this additional security measure can make a big difference in the security of CNP transactions by making them far less likely to be fraudulent.
Card security codes should be kept secret and never used on insecure web pages or shared in email or phone conversations. They also should not be shared with third parties.
<h2>Protect Customers&#8217; Money to Protect Yours</h2>
Due to the high popularity of credit card payments, the risk of card scams is also significant. Fraudsters are innovative and go to great lengths to phish credit card data or duplicate cards to cash in on unaware customers. 
In the aftermath, <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargebacks</a> occur. As might be expected, merchants are the ones who incur the majority of the resulting costs. That’s why it&#8217;s puzzling that some merchants are still reluctant to increase the security of transactions by adding CSC verification to their checkout process. 
This choice might seem to simplify the customer&#8217;s journey, but in the end, all it does is reduce their protection from fraud. Make sure to keep your guard up and get ready for an anti-fraud battle. 
To avoid jeopardizing your reputation (and money), it’s a good idea to implement multiple security layers boosting online payment protection. The better you protect your customers&#8217; money, the lower the risk of chargebacks for your business. 
Of course, the card security code <a href="https://www.shift4.com/blog/card-authorization-and-capture" target="_blank" rel="noopener">authorization</a> won&#8217;t fully prevent fraud on its own. However, it&#8217;s a great extra layer of security protecting online payments from fraud and scams.
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<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29163" src="https://assets.shift4.com/wp-content/uploads/2023/03/card-security-code-02-1-1024x576.png" alt="card security code card-not present happy consumer making an online payment Shift4" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/03/card-security-code-02-1-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/03/card-security-code-02-1-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/03/card-security-code-02-1-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/03/card-security-code-02-1-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/03/card-security-code-02-1-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/03/card-security-code-02-1.png 1601w" sizes="(max-width: 750px) 100vw, 750px" />
<h2></h2>
<h2>Can a Card Security Code Eliminate Chargebacks?</h2>
To some extent, yes. Undoubtedly, requiring the CSC code for every CNP transaction increases online shopping security and limits the risk of fraud. However, despite the high effectiveness of this security layer, there are still some loopholes and room for improvement from the merchants&#8217; perspective.  
Sometimes the transaction doesn&#8217;t trigger warnings, but a chargeback may still appear. The following are a few reasons that this might occur:  
<ul>
<li style="font-weight: 400;" aria-level="1">The transaction was confirmed with a lost or stolen card, meaning the fraudster had the CSC. In this case, the cardholder will definitely file a chargeback. </li>
<li style="font-weight: 400;" aria-level="1">A friend or family member made the transaction without the cardholder&#8217;s knowledge.</li>
<li style="font-weight: 400;" aria-level="1">The cardholder may not recognize the transaction on their statement.</li>
<li style="font-weight: 400;" aria-level="1">The cardholder&#8217;s intention from the very beginning was cyber shoplifting. </li>
</ul>
There is no perfect solution. Nevertheless, this is an important additional layer of security. By far, the best way to protect your business from chargebacks is to combine a variety of interlocking fraud protection mechanisms.
<h2>Anti-Fraud Protection or Flawless Purchasing Experience?</h2>
Merchants shouldn’t have to choose between these two options. Customers want a flawless user experience, a smooth purchasing path, and effortless checkout. But, at the same time, they expect a high level of security regarding their money, data, and payments. 
Hence, your approach to business security must combine various tools, mechanisms, and multiple security layers. Below you&#8217;ll find some best practices worth implementing to ensure customers that their data and money are in good hands:
<ul>
<li style="font-weight: 400;" aria-level="1">Make your website secure and use an HTTPS interface. </li>
<li style="font-weight: 400;" aria-level="1">Avoid collecting your customers&#8217; data on unsecured devices.</li>
<li style="font-weight: 400;" aria-level="1">Never store your customers&#8217; CSC data.</li>
<li style="font-weight: 400;" aria-level="1">Use a combination of interlocking fraud-prevention tools (i.e., <a href="https://www.shift4.com/blog/3d-secure-2-stronger-authentication" target="_blank" rel="noopener">3DS2</a>, AVS, geolocation, velocity limits, etc.).</li>
<li style="font-weight: 400;" aria-level="1">Ensure that your software is up-to-date so fraudsters can&#8217;t find any loopholes in your security systems.</li>
<li style="font-weight: 400;" aria-level="1">Don&#8217;t skimp on your customer service — it&#8217;s much cheaper to deal with customers (even difficult ones) than it is to dispute chargebacks later on.</li>
</ul>
As mentioned, asking for the CSC during checkout isn&#8217;t a worldwide standard, unfortunately.
The good news is that more and more customers have become risk-conscious and unwilling to share their money with fraudsters or scammers. As a result, they prefer making their purchases on well-secured websites, even if it takes a moment longer. 
Still, it&#8217;s up to merchants to increase transaction security. If you value security (yours and your customers), you&#8217;ll ask for the card security code during the checkout on your website.

card security code card-not present consumer making an online payment with a phone Shift4

Why Card Security Codes Matter In Online Shopping

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3D Secure authentication gives an extra layer of protection to card payment transactions. The initial version of 3DS, which was introduced in 1999, became known for its lowered conversion rates. With 3D Secure 2 (3DS2) that has changed for the better — it now comes with an improved, frictionless customer experience used widely by retailers.
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<h2 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">What is 3D Secure?</h2>
The term 3D Secure refers to three domains — the three parties involved in the authentication process:
<ul class="ml-[1rem]">
<li>
The merchant/<a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener noreferrer">acquirer</a> domain
</li>
<li>
The <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">issuing bank</a> domain
</li>
<li>
The interoperability domain (technology that processes the transactions).
</li>
</ul>
The 3D Secure protocol provides an extra layer of security for online credit card transactions. Moreover, because the issuing bank verifies the cardholder, it protects merchants against fraudulent chargebacks.
It’s the primary authentication mechanism for card payment transactions. However, while it is effective in preventing fraud, the previous version, which used a static password, added friction to the checkout process. Poor customer experience, as you might expect, resulted in increased cart abandonment rates, which drained merchant revenues.
EMVCo and the major credit card schemes introduced 3DS2 in 2015, a new authentication version (the details of which you will find below), to address this issue. PSD2, the Second EU Payments Service Directive, requires Strong Customer Authentication (SCA), which 3DS2 supports.
<h2 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">The Benefits of 3D Secure</h2>
Even though the early 3D Secure versions could have been more user-friendly, the authentication benefits merchants and customers. Below are some of the main reasons why using 3D Secure to authenticate online and mobile transactions is worthwhile.
<h3 class="text-xl font-semibold leading-6">Fraud Prevention and Enhanced Security</h3>
The main advantage of 3D Secure is that it minimizes fraud risk in online credit card transactions. The extra security layer and secure transactions through <a href="https://www.cloudflare.com/learning/ssl/what-is-ssl/" target="_blank" rel="noopener">SSL encryption</a> mean fewer disputed transactions.
<h3 class="text-xl font-semibold leading-6">Strong Customer Authentication (SCA) Compliance Under PSD2</h3>
Strong Customer Authentication, a PSD2 requirement, requires businesses to use multilevel authentication to verify payments. 3DS2 is the primary solution to comply with the European SCA regulation.
<h3 class="text-xl font-semibold leading-6">Liability Shift</h3>
When a customer authenticates a payment with 3D Secure, the liability for fraud-related chargebacks on the transaction is shifted to the issuing bank. This protects merchants from fraudulent chargebacks.
<h3 class="text-xl font-semibold leading-6">Fewer Disputed Transactions</h3>
As 3DS aims to reduce fraud causes, it helps merchants decrease the number of disputed transactions, allowing them to achieve better sales results.
<h3 class="text-xl font-semibold leading-6">Greater Customer Satisfaction</h3>
When customers know that the payment process on a particular website is secure, they’re more likely to complete the transaction.
<h3 class="text-xl font-semibold leading-6">No Extra Costs</h3>
You won’t be charged additional fees for incorporating 3D Secure into your payment flow when you work with a reputable payment partner.
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<h2 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">3D Secure 2: The Main Changes</h2>
As previously stated, the first version of 3D Secure could have been more user-friendly and had ongoing compatibility issues, particularly on mobile devices. The main differences between the first and second 3D Secure versions are:
<ul class="ml-[1rem]">
<li>
Stronger authentication — Static passwords are replaced with tokens and biometrics.
</li>
<li>
Enhanced customer experience — The customer journey is more fluid, particularly with mobile applications.
</li>
<li>
Better conversion — Reduced transactional friction aids in customer conversion.
</li>
<li>
Support for mobile customers — Merchants can provide protection across multiple platforms.
</li>
<li>
Management of exemptions — Strengthens frictionless experience (small amounts, trusted beneficiary, fraud rate monitoring, etc.).
</li>
</ul>
Let&#8217;s delve a little deeper into the specifics of the significant changes.
Exemptions allow the issuer and merchant to decide whether to continue 3D Secure authentication steps based on additional data received at the time of the transaction. The transaction is screened for risk to alert the system to the need to activate other safeguards.
The risk-based elements that form the basis for this decision are the transaction value, transactional history, information about new or existing customers, behavioral history, and device information.
As a result, if the customer is new to the store and has no transactional history, the risk may be greater than if the user&#8217;s card is already in the system. In such cases, the merchant may decide that 3DS authentication is required, while 3D Secure can be bypassed for returning customers.
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<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29404" src="https://assets.shift4.com/wp-content/uploads/2023/04/3D-Secure-2-3DS2-credit-cards-1024x576.png" alt="3D Secure 2-3DS2-credit cards" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/3D-Secure-2-3DS2-credit-cards-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/3D-Secure-2-3DS2-credit-cards-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/04/3D-Secure-2-3DS2-credit-cards-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/3D-Secure-2-3DS2-credit-cards-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/04/3D-Secure-2-3DS2-credit-cards-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/04/3D-Secure-2-3DS2-credit-cards.png 1600w" sizes="(max-width: 750px) 100vw, 750px" />
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<h3 class="text-xl font-semibold leading-6">Frictionless Flow</h3>
Frictionless flow is the most significant improvement to the protocol, as the risk-based authentication performed in the access control server (ACS) makes the entire process more customer-friendly. ACS collects device data, information about the purchased item, and its value to screen the purchase for potential risks. If it’s set too low, the customer can be background authenticated without further verification. The process takes place behind the scenes, so genuine customers aren’t inconvenienced.
It&#8217;s beneficial for frequent customers because it means they don&#8217;t have to go through an extra authentication process, which was previously presented as annoying pop-up windows that required entering static passwords. It&#8217;s a win-win situation for issuers because they can approve a transaction without having to interact with the cardholder.
As you can see, the goal of this new method is to remove friction from the checkout process, which significantly improves the customer experience. What matters is that if the risk is high, the merchant&#8217;s platform will still require additional authentication, ensuring that security is never compromised. It&#8217;s a significant improvement on the original version, which left many customers feeling inconvenienced or even irritated when asked for further information. Now, only a small percentage of the highest-risk transactions will be handled by 3DS2.
<h3 class="text-xl font-semibold leading-6">Better UX on Mobile Devices</h3>
Less friction during <a href="https://www.shift4.com/online-payments" target="_blank" rel="noopener">online payments</a> means a better customer experience, and mobile transactions are no exception. Merchants can natively integrate 3D Secure 2 authentication into their mobile applications thanks to an SDK (for iOS and Android).
This means that mobile customers get a more fluid journey without the friction with which they’ve struggled. The new 3D Secure version has a significantly improved design and is now fully compatible with in-app transactions. If the risk is indicated as low, the authentication process will be invisible to the cardholder, similar to the online process.
If the risk is deemed high, a customer will be verified in a more friendly manner, such as with biometric authentication (fingerprints or facial ID readers), enhanced one-time password (OTP: a text message with a temporary password), or out-of-band authentication (OOBA: authentication via mobile banking app).
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<h3 class="text-xl font-semibold leading-6">Non-Payment Authentication</h3>
Non-payment authentication contributes to a safer customer environment while remaining compliant with PSD2 requirements. 3DS2 authentication can be used for more than just online transactions, allowing customers to be authenticated even if they don&#8217;t make a purchase, such as to validate their credit card.
Non-payment authentication is a 3DS2 feature that allows merchants to conduct authentication in the mobile application when the cardholder enters their information for later use. A user&#8217;s authenticity is verified by an issuing bank using a 3DS Server and a mobile SDK.
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<h3 class="text-xl font-semibold leading-6">Higher Security Level</h3>
With 3DS2, static passwords are replaced by tokens and biometrics, and authentication occurs while the user is still on the merchant&#8217;s website or app. This means that both e-commerce shoppers and app users will have a much better checkout experience.
Richer data enables merchants to provide protection across multiple platforms, with each transaction sending ten times more data to issuers than the previous 3DS version. Device information, cardholder purchase data, fraud and chargeback data, and geolocation are just a few examples. This insight gives merchants a much better chance of determining whether a particular customer is a legitimate cardholder.
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<h3 class="text-xl font-semibold leading-6">No Redirections</h3>
Redirections (also known as redirects) and strange-looking popup windows make users suspicious and less likely to complete transactions, resulting in <a href="https://www.shift4.com/blog/checkout-abandonment-what-it-is-how-to-reduce" target="_blank" rel="noopener">checkout abandonment</a>. Customers were also irritated by the extra steps and abandoned the purchase before making payment. The authentication process is now consistent with the merchant&#8217;s website or application, making the checkout flow appear more professional and increasing customer confidence.
Shift4 clients should already be familiar with 3DS2, as we have provided them with non-invasive 3D Secure, eliminating the need to redirect customers to another page to confirm their payment.
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<h3 class="text-xl font-semibold leading-6">Faster Shopping</h3>
When the merchant&#8217;s platform only requires additional authentication if the risk is high, the shopping process becomes much faster, especially for returning customers.
It&#8217;s a well-known fact that slow page loading causes customer frustration, which can lead to checkout abandonment. By requiring authentication only for a small percentage of transactions, the user experience is greatly improved.
Most of the above benefits were available to Shift4 clients before the introduction of 3D Secure version 2, as we provided non-invasive 3D Secure solutions from the beginning.
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<h2 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">Mobile 3DS2 SDK: Seamless Authentication Flow Embedded in Your App</h2>
Merchants must use an EMVCo certified 3D Secure 2 SDK to embed the authentication into the checkout so that it is automatically rendered for the device in use. Payment platforms&#8217; native mobile SDKs provide merchants with many more options for payment authentication.
The ease of integration into the merchant&#8217;s system and the ability to customize the interface within the application allow online businesses to provide additional security across multiple platforms.
Because customer experience is at the forefront of sales, merchants can now offer 3D Secure benefits in their mobile applications, which gives them a chance to reach more people.
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<h2 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">How Shift4 Can Help</h2>
In the context of SCA, 3D Secure version 2 is significant because it extends frictionless authentication to multiple platforms, including mobile environments. The combination of frictionless flow and faster and more secure payments reduces cart abandonment rates and ensures a better user experience.
<a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a> offers EMVCo-certified mobile 3DS2 SDK, providing numerous benefits to you and your customers. Frictionless flow, an excellent user experience, and heightened security measures let you offer convenient payments that match the complex regulations of PSD2. Besides improving your sales performance, Shift4 can help you to reduce fraud and get the most out of all 3D Secure benefits.
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3D Secure 2-3DS2-online purchase with phone

3D Secure 2: Stronger Authentication & Support for Mobile Customers

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Without a doubt, chargebacks are part and parcel of dealing with card payments, and it&#8217;s better to get familiar with this term before launching any online business.
Why? Because chargebacks can be costly for merchants, and, in a worst-case scenario, they can cause huge losses.
Although it sounds a bit scary, chargebacks can be managed. And since prevention is better than a cure, preparing well for a possible chargeback is highly advisable.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">So, What is a Chargeback?</h2>
A chargeback is a form of customer protection. It happens when a customer disputes a charge on their bill. When a transaction is proven fraudulent, the bank refunds the disputed value to the cardholder.
While the process is quite effortless from the customer&#8217;s side, it requires much work for the merchant to prove that the transaction was genuine.
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<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Reasons For Chargebacks</h2>
Even if there&#8217;s no way to eradicate chargebacks, it&#8217;s good to know why and when they can occur to counteract them effectively.
The top 4 reasons for chargebacks are as follows:
<ul class="ml-[1rem]">
<li>
Fraudulent Transaction 
When a credit card has been used without the cardholder&#8217;s authorization or fraudulent activity happens due to identity theft, the customer has the right to dispute the transaction. These are extremely difficult for the merchant to win, even if they provide all the relevant documentation and evidence.  
</li>
<li>
Item Not Received 
Another common reason for chargebacks is when the cardholder claims they didn&#8217;t receive the product or when they are unsatisfied with the product or service because it is far from what was described.
</li>
<li>
Credit Not Processed 
Sometimes the customer returns the product to the merchant, requests to get their money back, and claims afterward that the funds were never posted to their account. 
</li>
<li>
Technical Problems 
Technical malfunction refers to situations that shouldn&#8217;t happen, yet they did. One example would be when a customer&#8217;s card has been accidentally charged twice for the same transaction. Or, due to a problem with authorization, the account was charged even if the transaction was declined. 

</li>
</ul>
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Retrieval Request / Soft Chargeback</h2>
Apart from the reasons listed above, it may happen that the customer simply doesn&#8217;t remember the transaction. Or it was a family member who used the card data and completed the purchase without informing the cardholder.
The customer might have spotted an unknown charge on their account and instead of disputing a charge at once, they may ask for more information about the transaction.
Such a request is called a &#8216;soft chargeback&#8217; or &#8216;<a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/understanding-reasons-behind-retrieval-requests" target="_blank" rel="noopener noreferrer">a retrieval request</a>.&#8217; It comes from the credit card issuer or the cardholder and goes to the acquirer or the merchant.
Since it&#8217;s a way to avoid chargebacks, responding to a retrieval request without delay is highly advisable.
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29352" src="https://assets.shift4.com/wp-content/uploads/2023/04/chargebacks_Shift4_woman-on-laptop-with-credit-card-in-hand-1024x576.png" alt="chargebacks Shift4 woman on laptop with credit card in hand" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/chargebacks_Shift4_woman-on-laptop-with-credit-card-in-hand-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/chargebacks_Shift4_woman-on-laptop-with-credit-card-in-hand-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/04/chargebacks_Shift4_woman-on-laptop-with-credit-card-in-hand-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/chargebacks_Shift4_woman-on-laptop-with-credit-card-in-hand-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/04/chargebacks_Shift4_woman-on-laptop-with-credit-card-in-hand-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/04/chargebacks_Shift4_woman-on-laptop-with-credit-card-in-hand.png 1600w" sizes="(max-width: 750px) 100vw, 750px" />
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">The Chargeback Process At a Glance </h2>
Every time the chargeback occurs, a few parties are involved.
First and foremost, there is the  cardholder (customer) initiating the chargeback and the merchant on the other end. Plus, the <a href="https://www.shift4.com/blog/what-is-an-issuing-bank" target="_blank" rel="noopener">issuing bank</a>, the card network (such as Visa, MasterCard, or American Express), <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener noreferrer">the acquiring bank</a>, the payment gateway, and a merchant account.
The process itself is rather complicated and requires actions from every party involved.
As opposed to a traditional refund (when a customer contacts the merchant directly) when disputing a charge on their bill, the customer has to ask the bank to &#8220;remove&#8221; funds from the merchant&#8217;s account and send them back to their own.
We can describe this process as a transaction reversal and its purpose is to provide a  way to protect customers from fraudsters and unauthorized transactions.
What happens when the cardholder asks their issuing bank to return their money? The bank issues a code for the dispute and, at that moment, formally triggers the procedure. The chargeback is sent to the card organization as well as the acquirer. In response to the action taken by the issuing bank, the merchant&#8217;s bank withholds the referred funds awaiting the final arbitration.
In the meantime, with the help of their payment gateway, the merchant collects and sends relevant documents to the acquirer. They do it through the representment form (see below), where any receipts, shipping proofs, logs, signatures, or other documents confirming the transaction&#8217;s legitimacy should be added.
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29349" src="https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-dashboard-Shift4-805x1024.png" alt="chargeback dashboard view Shift4" width="750" height="954" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-dashboard-Shift4-805x1024.png 805w, https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-dashboard-Shift4-236x300.png 236w, https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-dashboard-Shift4-768x977.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-dashboard-Shift4-1208x1536.png 1208w, https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-dashboard-Shift4-1611x2048.png 1611w, https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-dashboard-Shift4-1568x1994.png 1568w" sizes="(max-width: 750px) 100vw, 750px" />
&nbsp;
As soon as the representment form is submitted to the acquirer, it is sent off to the issuer for final judgment.
Once the transaction is proven fraudulent, the original transaction value (or its disputed part) is refunded to the cardholder (see diagram below).
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29350" src="https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-process-flow-graphic-Shift4-1024x976.png" alt="chargeback process flow diagram Shift4" width="750" height="715" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-process-flow-graphic-Shift4-1024x976.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-process-flow-graphic-Shift4-300x286.png 300w, https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-process-flow-graphic-Shift4-768x732.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/chargeback-process-flow-graphic-Shift4.png 1194w" sizes="(max-width: 750px) 100vw, 750px" />
&nbsp;
<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">What are the financial consequences for the merchants?</h3>
There are two scenarios:
<ol class="ml-[1rem] list-decimal">
<li>
Assuming the customer&#8217;s complaint is false, you won&#8217;t pay any refund.
</li>
<li>
If the transaction isn&#8217;t legitimate and the complaint is justified, the bank will take back the original value of the transaction from your account, plus an extra fee. The exact fee depends on your contract and the card network conditions; however, usually, it&#8217;s about $25.
</li>
</ol>
What if the merchant wins and the customer is unsatisfied? In such a situation, the customer can decide to file for pre-arbitration. Unfortunately, it results in an additional cost for the merchant, and, again, its value depends on the contract details and the card network conditions.
Nevertheless, pre-arbitration is not the last resort. If the decision is still unsatisfactory for any parties involved, they can file for the final arbitration stage. Assuming they accept the risk of an even higher penalty for the loser.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">How to Win a Dispute?</h2>
There&#8217;s no safe bet when it comes to a chargeback dispute; however, there are some golden rules to follow:
<ol class="ml-[1rem] list-decimal">
<li>
First and foremost, be sure to collect and provide as much evidence as possible!
</li>
<li>
Organize this evidence in a structured and easy-to-follow way.
</li>
<li>
Send all the documents as a single pdf file to your acquirer.
</li>
</ol>
The easiest way to adhere to the above steps is to use the representment form created by Shift4.
Before completing the form, it&#8217;s crucial to gather relevant documents. These documents could include the following:
<ul class="ml-[1rem]">
<li>
The product description and the URL, as well as any links associated with that product
</li>
<li>
The customer&#8217;s name and IP address
</li>
<li>
Signatures
</li>
<li>
Billing addresses
</li>
<li>
Receipts (scanned or screenshots)
</li>
<li>
Any communication you&#8217;ve had with the customer (emails, chats, audio recordings, etc.)
</li>
<li>
Any other relevant information that you deem necessary
</li>
</ul>
For physical products, it&#8217;s necessary to provide additional information regarding the following:
<ul class="ml-[1rem]">
<li>
Shipping address
</li>
<li>
Delivery date
</li>
<li>
Any shipping documents that you have
</li>
<li>
Any signatures proving that the product was delivered and received
</li>
<li>
Tracking numbers and information about the carrier, such as FedEx or DHL
</li>
</ul>
If a digital product is a subject of the sale, it&#8217;s advisable to prove that the customer has already used it. In that case, providing server logs, download history, or any other proof of product usage comes in handy.
In short, in a chargeback dispute, it&#8217;s better to be safe than sorry. So always follow the principle of &#8220;the more evidence, the better.&#8221;
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Wrapping Up</h2>
Chargebacks are perceived as a threat to online businesses and merchants go to great lengths to avoid them.
This is mainly because chargebacks pose the risk of losing money and products, which is painful for merchants. They come not only with a monetary cost, but also cost time and energy to dispute.
The more significant threat is when a merchant&#8217;s account receives too many chargebacks. The consequence of which can be labeling the account as fraudulent. It goes without saying that such a label will negatively affect the business&#8217; bottom line and definitely is not the correct direction when growing your business.
Therefore, it’s important to ensure you work with the best-in-class payment platform providing <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/blog/delayed-capture-what-you-need-to-know" target="_blank" rel="noopener noreferrer">card authorization and capture</a>, sophisticated and highly effective <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/preventing-fraud" target="_blank" rel="noopener noreferrer">anti-fraud tools</a>, and, most of all, 3D Secure, shifting the liability from the acquirer to the issuing bank.
Keep your business safe and secure with <a class="inline-flex items-center font-medium text-primary focus:outline-none focus-visible:rounded focus-visible:ring focus-visible:ring-offset-2" href="https://www.shift4.com/" target="_blank" rel="noopener noreferrer">Shift4</a>!

chargebacks_Shift4_EMV credit card graphic

Chargebacks in a Nutshell: A Guide for Merchants

In addition to the card network, the payment platform, and the acquiring bank, the last essential element that makes the payment process possible is the issuing bank. 
The definitions of the card network and <a href="https://www.shift4.com/blog/why-you-need-an-acquirer-to-process-payments" target="_blank" rel="noopener">the acquiring bank</a> might be familiar to merchants, but understanding the role the issuing bank plays isn&#8217;t as obvious and needs some explanation.
So, what is an issuing bank and how do we define its role in the payment process?
<h2>What Is an Issuing Bank? </h2>
An issuing bank (also called an issuer) is one of the key components in the <a href="https://www.shift4.com/online-payments" target="_blank" rel="noopener">online payment</a> process. In short, it is a financial institution providing customers with credit and debit cards. 
The cards are issued to customers on behalf of card networks like <a href="http://visa.us" target="_blank" rel="noopener">Visa</a>, <a href="https://www.mastercard.us/en-us.html" target="_blank" rel="noopener">Mastercard</a>, <a href="https://www.discover.com/" target="_blank" rel="noopener">Discover</a>, and <a href="https://www.americanexpress.com/" target="_blank" rel="noopener">American Express</a>.
Although the total number of issuers worldwide exceeds 100,000, there are only around 4 or 5 banks that play a significant role in a particular country, wielding a prevailing market share. 
For example, in the United States, the main issuing banks are: 
<ul>
<li style="font-weight: 400;" aria-level="1"><a href="https://en.wikipedia.org/wiki/JPMorgan_Chase" target="_blank" rel="noopener">JPMorgan Chase</a> </li>
<li style="font-weight: 400;" aria-level="1"><a href="https://en.wikipedia.org/wiki/Capital_One" target="_blank" rel="noopener">Capital One</a></li>
<li style="font-weight: 400;" aria-level="1"><a href="https://en.wikipedia.org/wiki/Citigroup" target="_blank" rel="noopener">Citigroup</a> </li>
<li style="font-weight: 400;" aria-level="1"><a href="https://www.discover.com/" target="_blank" rel="noopener">Discover</a></li>
<li style="font-weight: 400;" aria-level="1"><a href="https://en.wikipedia.org/wiki/Bank_of_America" target="_blank" rel="noopener">Bank of America</a> </li>
</ul>
However, from a global perspective, the Big Four Banks term refers to the following: 
<ul>
<li style="font-weight: 400;" aria-level="1"><a href="https://en.wikipedia.org/wiki/Bank_of_England" target="_blank" rel="noopener">The Bank of England</a></li>
<li style="font-weight: 400;" aria-level="1"><a href="https://en.wikipedia.org/wiki/Federal_Reserve" target="_blank" rel="noopener">The Federal Reserve</a></li>
<li style="font-weight: 400;" aria-level="1"><a href="https://en.wikipedia.org/wiki/Bank_of_Japan" target="_blank" rel="noopener">The Bank of Japan</a></li>
<li style="font-weight: 400;" aria-level="1"><a href="https://en.wikipedia.org/wiki/European_Central_Bank" target="_blank" rel="noopener">The European Central Bank</a></li>
</ul>
Every time a customer purchases goods or services and pays with their credit or debit card, the issuing bank is involved.
<h2>The Issuing Bank’s Key Responsibilities</h2>
From the merchant&#8217;s perspective, the issuing bank sits at the opposite end of the payment transaction. 
Once the customer makes the purchase (thus initiating the transaction), the information from the merchant goes through an acquiring bank, via the card network, to the issuer.
The latter is then responsible for authorizing the transaction. In other words, it is liable for the cardholder&#8217;s ability to pay off the debt accumulated by using the credit card or line of credit.
The authorization process begins with ensuring that the customer has the available credit or funds required for the purchase. It also includes the account details verification phase and subjecting the transaction to its own fraud and risk rules.
Aside from being in charge of the customer&#8217;s financial information, the issuers provide necessary card maintenance, including card renewals, limit-setting, suspensions, blockages, and card activations. 
They also bear responsibility for paying the debts incurred by their cardholders. In case of a non-payment, following the card network&#8217;s rules, the issuer and the acquirer share the credit liability. In order to manage the risk of the cardholder defaulting on their payments, the issuers collect a fee for every card transaction.  
In brief, the issuing banks handle everything that&#8217;s customer-related.
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29081" src="https://assets.shift4.com/wp-content/uploads/2023/02/issuing-bank-customer-using-a-credit-card-Shift4--1024x576.png" alt="issuing bank customer using a credit card Shift4" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2023/02/issuing-bank-customer-using-a-credit-card-Shift4--1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/02/issuing-bank-customer-using-a-credit-card-Shift4--300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2023/02/issuing-bank-customer-using-a-credit-card-Shift4--768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2023/02/issuing-bank-customer-using-a-credit-card-Shift4--1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2023/02/issuing-bank-customer-using-a-credit-card-Shift4--1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2023/02/issuing-bank-customer-using-a-credit-card-Shift4-.png 1601w" sizes="(max-width: 750px) 100vw, 750px" />
&nbsp;
<h2>The Issuer’s Role in the Payment Process</h2>
To make a long story short, the issuer’s role in the payment process is to authorize the transaction.
The transaction starts when the cardholder uses their payment card for a purchase. Once the customer submits the transaction, the payment processor forwards the <a href="https://www.shift4.com/blog/payment-tokenization-explained" target="_blank" rel="noopener">tokenized transaction</a> request to the issuing bank. 
Then, depending on the data sent by the issuer to the card network, the transaction will be accepted or rejected. Assuming the customer&#8217;s account covers the costs of the purchase, the issuing bank sends the approval to the acquiring bank. The purchase is marked as completed in the aftermath and the issuer transfers the funds to the merchant&#8217;s acquiring bank.
In conclusion, the issuing bank&#8217;s role is to serve as an intermediary between the acquiring bank or card network and the cardholder. It is possible due to the contracts with the card owners on the account terms and repayment of credit card transactions.
In addition to the payment acceptance process, dealing with <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargebacks</a> and disputes also falls within the scope of the issuing bank&#8217;s role. Whenever a customer disputes a transaction, the issuer deals with the dispute.
Note that it&#8217;s not unusual for the banks to operate as both acquiring and issuing entities.
<h2>Key Takeaways</h2>
<ul>
<li style="font-weight: 400;" aria-level="1">Any bank issuing debit or credit cards is considered an issuing bank or issuer.</li>
<li style="font-weight: 400;" aria-level="1">The issuer&#8217;s role is to send money to acquiring banks during a transaction.</li>
<li style="font-weight: 400;" aria-level="1">Card brands don&#8217;t issue their cards directly to customers. They do it via the issuing banks, taking responsibility for the potential risk related to a cardholder&#8217;s credit balance.</li>
<li style="font-weight: 400;" aria-level="1">When the payment is made, the issuer receives and authorizes payment tokens. It determines whether the customer transaction will be accepted or rejected.</li>
<li style="font-weight: 400;" aria-level="1">The issuing bank represents customers and their interests, whereas merchants are backed up by their acquiring bank, managing their merchant account and processing card transactions.</li>
</ul>

issuing bank front of a bank building Shift4

What is an Issuing Bank? Get the Scoop from the Experts

When you accept a credit card payment, there are many components that work together to process this transaction. Shift4&#8217;s end-to-end payment solution is unique in that it handles all of these steps behind the scenes to deliver a <a href="https://www.shift4.com/unified-commerce" target="_blank" rel="noopener">seamless commerce experience</a>. One component involved in this process is the role of acquiring bank. 
The acquirer — also known as a credit card bank, acquiring bank, or merchant bank — is a bank or financial institution licensed as a member of a card association (such as Visa or Mastercard) and is responsible for opening and maintaining the merchant&#8217;s bank account. The acquirer can also act as a settlement bank, facilitating merchant payment communication and settlement.
<h2>What Is the Role of the Acquirer in the Payment Process?</h2>
Even though transactions only take a few seconds, there is a lot going on under the hood before the purchase is complete. First, the card information is encrypted by the payment gateway and is then sent for approval. The acquirer’s job comes toward the end of this process. They authorize or reject card transactions as they come in and connect to the issuing bank on the merchant’s behalf during the payment process. Once a transaction is approved, the funds are transferred to the merchant’s account.<img decoding="async" loading="lazy" class="alignnone size-full wp-image-29047" src="https://assets.shift4.com/wp-content/uploads/2022/12/Security-Trifecta-Process-Flow-2-01.png" alt="" width="2078" height="597" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/Security-Trifecta-Process-Flow-2-01.png 2078w, https://assets.shift4.com/wp-content/uploads/2022/12/Security-Trifecta-Process-Flow-2-01-300x86.png 300w, https://assets.shift4.com/wp-content/uploads/2022/12/Security-Trifecta-Process-Flow-2-01-1024x294.png 1024w, https://assets.shift4.com/wp-content/uploads/2022/12/Security-Trifecta-Process-Flow-2-01-768x221.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/Security-Trifecta-Process-Flow-2-01-1536x441.png 1536w, https://assets.shift4.com/wp-content/uploads/2022/12/Security-Trifecta-Process-Flow-2-01-2048x588.png 2048w, https://assets.shift4.com/wp-content/uploads/2022/12/Security-Trifecta-Process-Flow-2-01-1568x450.png 1568w" sizes="(max-width: 2078px) 100vw, 2078px" />
After getting the card information from the payment gateway, an acquirer is responsible for the following:
<ul>
<li style="font-weight: 400;" aria-level="1">Authorization: Asking the issuer whether the card is valid and whether there are sufficient funds in the account to complete the transaction.</li>
<li>Authentication: A voluntary verification of the cardholder&#8217;s identity after entering the card details during purchase. Typically, <a href="https://www.shift4.com/blog/3d-secure-2-stronger-authentication" target="_blank" rel="noopener">3D Secure</a> is used for authentication.</li>
</ul>
Your choice of acquirer should be guided by their support for your business model. Additional factors to consider include the following:
<ul>
<li style="font-weight: 400;" aria-level="1">The types of cards the acquirer supports: Ensure that they have all the card networks you accept in their portfolio. Also, ask for other payment methods if you need them.</li>
<li style="font-weight: 400;" aria-level="1">(For international businesses) Locations and currencies the acquirer supports: Does the list include the country in which your company is registered? Check that the acquirer approves any and all currencies you intend to accept on your website.</li>
<li style="font-weight: 400;" aria-level="1">The average transaction amount: This will help you calculate how much you’ll be charged for each transaction. Note that an acquirer may charge a merchant various fees, which will be specified in their agreement. Fees are charged to cover the costs associated with network processing and merchant account-related services.</li>
<li style="font-weight: 400;" aria-level="1">The average number of transactions: Speaking of pricing, double-check the rates to ensure that you won&#8217;t have to pay extra monthly fees, which can be costly, especially in the early stages. Furthermore, you can negotiate rates if you own a company that handles numerous daily transactions.</li>
<li style="font-weight: 400;" aria-level="1">Responsive support: You need to be assured that any payment issue will be quickly addressed.</li>
<li style="font-weight: 400;" aria-level="1">Recurring payments: If you’d like to offer subscriptions, your acquirer needs to support recurring payments.</li>
</ul>
<h2>Simplifying the Process with End-to-End Payments</h2>
As you can see, merchants have to navigate overwhelming complexity before they can accept a single payment. Fortunately, <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a> offers a unique end-to-end payment solution that delivers all the connections to the entire transaction process. This simplified approach has numerous benefits, including lower total cost, faster implementation, streamlined support, and much more. Our all-in-one ecosystem includes:
<ul>
<li>Secure payment gateway with tokenization and PCI-validated point-to-point encryption</li>
<li>P2PE-enabled EMV devices with lifetime free replacements</li>
<li>500+ POS, PMS, and eCommerce integrations</li>
<li>Processor connection</li>
<li>Future-proof updates with the latest technologies and trends</li>
<li>24/7 customer support for all your payments needs</li>
</ul>
Want to learn more? Contact us today at <a href="mailto:sales@shift4.com">sales@shift4.com</a> or at 888.276.2108.

acquiring bank Shift4-digital security collage

Why You Need an Acquirer to Process Payments

Our VenueNext technology delivers an end-to-end sports and entertainment solution that has allowed dozens of professional sports teams to seamlessly transition their commerce to a mobile-focused fan experience. When the <a href="https://www.mlb.com/rays" target="_blank" rel="noopener">Tampa Bay Rays</a> implemented the solution, they quickly saw significant benefits to their operations and sales – while improving the gameday experience for their fans.
<h2>If You Simplify It, They Will Come</h2>
One of the major advantages of using VenueNext is the simplicity that it brings to the fan experience. As part of the implementation, the Rays converted their six main concession stands in Tropicana Field to utilize VenueNext’s self-service kiosks and mobile ordering solutions. This allowed the team to introduce their fans to a game-changing new stadium experience centered around a new mobile app where they could order and receive food and drinks with express pick-up.
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29003" src="https://assets.shift4.com/wp-content/uploads/2022/12/Tampa-Bay-Rays-app_Shift4-payment-technology-1024x523.png" alt="Shift4 Case Study Tampa Bay Rays" width="750" height="383" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/Tampa-Bay-Rays-app_Shift4-payment-technology-1024x523.png 1024w, https://assets.shift4.com/wp-content/uploads/2022/12/Tampa-Bay-Rays-app_Shift4-payment-technology-300x153.png 300w, https://assets.shift4.com/wp-content/uploads/2022/12/Tampa-Bay-Rays-app_Shift4-payment-technology-768x392.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/Tampa-Bay-Rays-app_Shift4-payment-technology.png 1405w" sizes="(max-width: 750px) 100vw, 750px" />
A mobile-first approach allows guests to quickly order from their smartphone — without standing in a line. This enabled Rays fans to quickly grab a drink or a bite to eat and get back to the action.
And the results were undeniable. In just one season after switching to VenueNext, the Rays saw increased numbers across the board. More fans were willing to place orders because it was as quick and easy as possible and the team became one of the leading MLB stadiums in mobile orders.
Some of the key highlights include:
<ul>
<li>44% increase in F&amp;B per cap vs. the previous full season</li>
<li>31.2% increase in orders at 6 high-traffic concession stands</li>
<li>5.6% increase in check average</li>
<li>3rd highest in MLB for mobile orders volume</li>
<li>Nearly a third of fans who placed a mobile order placed more than one during the season</li>
<li>9.3% of customers who placed a mobile order were new email addresses to the Rays CRM</li>
<li>65% of season ticket members used Rays Pay wallet for mobile ordering or rich checkout</li>
</ul>
<blockquote>&#8220;Adopting VenueNext&#8217;s all-in-one solution has streamlined operations and provided a seamless ordering experience for our fans,&#8221; said Rays Chief Business Officer Bill Walsh. &#8220;We look forward to working with our partners at VenueNext and Levy to continue to enhance the fan experience.&#8221;</blockquote>
In addition to the increase in sales, the change improved operations as well. For example, prior to the switch to VenueNext, the Rays employed several different POS systems to facilitate their in-person orders, which was the only option to fans at the time. Today, the Rays are able to get more features out of just one integrated solution than they did with several vendors – simplifying training and support for their employees.
“It’s been great to partner with the Rays as they strive to become the leader in delivering a next-gen fan experience at Tropicana Field,&#8221; said Dustin Alpert, Shift4&#8217;s Head of Sports &amp; Entertainment.
To learn more about VenueNext, Shift4’s sports &amp; entertainment commerce offering, visit <a href="https://www.shift4.com/sports-entertainment" target="_blank" rel="noopener">www.shift4.com/sports-entertainment</a>.

Shift4 Case Study Tampa Bay Rays crowd image

A Mobile-Focused Fan Experience Fuels Growth for the Tampa Bay Rays

Delayed capture is used to freeze a customer’s funds on a card so that you have time to verify their identity or refund their money. Such solution reduces the number of chargebacks and ensures the security of your business. Read on to learn more.
In short, delayed capture allows merchants to ensure that a customer has enough money or credit to cover a transaction. This means that the merchant first authorizes the payment, so the specified amount is frozen on the customer&#8217;s card for later collection or capture by the merchant.
Why may you need this? To avoid fraud and <a href="https://www.shift4.com/blog/credit-card-chargebacks-merchants-rights" target="_blank" rel="noopener">chargebacks</a> that can be difficult to manage and can have a negative impact on your cash flow.
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">How Delayed Capture Works</h2>
The transaction based on delayed capture consists of two steps: authorization (holding the amount) and capture (finalizing and settling the authorization).
Here’s a step-by-step example.
<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">1. Authorize the Card and Check its Validity</h3>
When a transaction is authorized, funds on a customer&#8217;s card are temporarily blocked for up to seven days for debit cards and 28 days for credit cards (it’s based on a period set by Visa and MasterCard). This gives you time to verify that the customer&#8217;s credit card is valid. Such an operation is free of charge at <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a>.
For the record, <a href="https://www.shift4.com/blog/card-authorization-and-capture" target="_blank" rel="noopener">authorization</a> is made by the issuing bank at the time of purchase, which means that the bank has placed a hold on the funds and the cardholder sees this as a pending transaction on its bank statement. A merchant hasn’t received the funds yet, and the transaction is reconciled later by capturing the transaction.
<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">2. Make a Decision</h3>
You can still deliver the product to a customer while funds are blocked. However, if you have a reason to suspect a customer, you can choose to take no action; the cash will be released to the customer after a determined time period.
<h3 class="text-xl font-semibold leading-6 md:text-3xl mt-8 mb-6">3. Capture Funds</h3>
When a customer receives goods or services, and you know that they won’t request a refund, you can capture the funds. The money will be deducted from the customer&#8217;s card, and the transaction will be completed. Only then will you be charged a transaction fee.
&nbsp;
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter size-large wp-image-29380" src="https://assets.shift4.com/wp-content/uploads/2023/04/delayed-capture-diagram-1024x731.png" alt="Delayed capture flow diagram Shift4" width="750" height="535" srcset="https://assets.shift4.com/wp-content/uploads/2023/04/delayed-capture-diagram-1024x731.png 1024w, https://assets.shift4.com/wp-content/uploads/2023/04/delayed-capture-diagram-300x214.png 300w, https://assets.shift4.com/wp-content/uploads/2023/04/delayed-capture-diagram-768x549.png 768w, https://assets.shift4.com/wp-content/uploads/2023/04/delayed-capture-diagram.png 1400w" sizes="(max-width: 750px) 100vw, 750px" />
<h2></h2>
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Delayed Capture Benefits</h2>
Depending on how your business operates, there are several ways you can benefit from delaying the capture of a customer&#8217;s payment.
<ul class="ml-[1rem]">
<li>
Better test period offerings 
The customer can test your product during the trial period and choose whether to continue using it and pay for it or to cancel the subscription and/or receive a refund. Plus, authorizing a card during the signup process leads to more completed transactions and increased loyalty.
</li>
<li>
Customer verification before sending the product 
You can create a payment scenario that enables you to verify a customer&#8217;s identity against fraud before delivering goods or services. It also makes you cancel payments before they are captured, so you save time and transaction fees and avoid making refunds.
</li>
<li>
The company is protected from chargebacks 
The possibility of delaying payments between authorization and capture processing gives you more time to check the transaction against fraud. The result? Fewer <a href="https://www.shift4.com/blog/chargebacks-in-a-nutshell-a-guide-for-merchants" target="_blank" rel="noopener">chargebacks</a> and refund requests.
</li>
<li>
Inventory supply 
Delayed capture enables you to refill ordered items before processing the customer&#8217;s payment, so it really helps if the products aren’t immediately accessible.
</li>
</ul>
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Improve Your Business Performance</h2>
The decision to postpone transaction capture instead of charging is usually dictated by the type of business.
Delayed capture works well for all business models that are vulnerable to &#8220;<a href="https://www.shift4.com/blog/friendly-fraud-how-to-get-money-back" target="_blank" rel="noopener">friendly fraud</a>&#8221; and fraud associated with shipping goods or services. If your company deals with a lot of disputes, delayed capture will help you improve customer satisfaction.

delayed capture Shift4 person using their phone to make a purchase

Delayed Capture — What You Need to Know

Shift4 and VenueNext have made it their mission to transform the way <a href="https://www.shift4.com/sports-entertainment" target="_blank" rel="noopener">sports and entertainment venues</a> approach the gameday experience — and the payments involved. Their ecosystem of mobile-first technologies streamline commerce across the entire stadium, arena, or other entertainment venues, including:
<ul>
<li>Point Of Sale: Accept mobile and contactless payments with quick-service and full-service point-of-sale solutions that are seamless for patrons and operators.</li>
<li>Mobile Ordering: Minimize wait times with mobile ordering and designated pick-up areas. In-seat delivery will also reduce lines at concessions and retail stands.</li>
<li>Mobile Wallet: A mobile wallet can be branded for your team or venue, allow fans to redeem rewards, and incentivize mobile adoption with discounts and cashback offerings.</li>
</ul>
<h3>The Experience Marketplace Adds An Instant Value To Your Venue</h3>
As a part of their unified commerce offering, <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a> and VenueNext have extended the mobile experience by providing teams a way to connect with their fans: the Experience Marketplace.
With this feature, professional and college sports organizations can tap into the connection they already have with their fans and create items they can purchase, which can include autograph signings, access to press conferences, tours, mascot visits, and much more.
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-29016" src="https://assets.shift4.com/wp-content/uploads/2022/12/gators_01.png" alt="Shift4 customer case study the Florida Gators" width="768" height="432" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/gators_01.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/gators_01-300x169.png 300w" sizes="(max-width: 768px) 100vw, 768px" />
&nbsp;
Experience Marketplace allows teams and venues to:
<ul>
<li>Monetize every aspect of venues and events through low-cost-of-goods experiences</li>
<li>Create membership value by restricting the sale of select experiences to members or member-level segments</li>
<li>Collect relevant information for each experience to decorate CRM profiles</li>
</ul>
<h3>Florida Gators Took Full Advantage of The Experience Marketplace</h3>
The <a href="https://www.ufl.edu/" target="_blank" rel="noopener">University of Florida</a> uses the Experience Marketplace for their football program, naming them “Swamp Moments” after the nickname for their <a href="https://floridagators.com/sports/2020/4/4/ben-hill-griffin-stadium.aspx" target="_blank" rel="noopener">Ben Hill Griffin Stadium</a>. From there, they were able to create and offer a wide range of items and experiences. These include commemorative tickets for the season or for specific games, access to exclusive areas or events, and more. The most popular “Swamp Moments” for the University were:
<ul>
<li>Pre-Game Experience With On-Field Passes</li>
<li>Share a Special Message on the Videoboard</li>
<li>Play Catch on the Field With a Friend After the Game</li>
<li>Exclusive Group Meet With Steve Spurrier</li>
<li>Commemorative Tickets</li>
</ul>
&nbsp;
<h3 style="font-family: -apple-system, 'system-ui', 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif; font-weight: var(--heading--font-weight); font-size: var(--heading--font-size-h3); letter-spacing: normal; line-height: var(--heading--line-height-h3);"><img decoding="async" loading="lazy" class="size-medium wp-image-28977 aligncenter" style="color: var(--global--color-primary); font-family: var(--global--font-secondary); font-size: var(--global--font-size-base);" src="https://assets.shift4.com/wp-content/uploads/2022/12/gators-marketplace-300x261.webp" alt="" width="300" height="261" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/gators-marketplace-300x261.webp 300w, https://assets.shift4.com/wp-content/uploads/2022/12/gators-marketplace.webp 700w" sizes="(max-width: 300px) 100vw, 300px" /></h3>
VenueNext’s Experience Marketplace allowed the Gators to add nearly $100,000 of additional revenue from the Swamp Moments program, proving that there is unquestionably a high demand from fans to extend their relationship with the team beyond just spectators.
<h3>Create Lasting Memories</h3>
And for the fans, these are more than just ordinary items they purchased. Each experience represents an unforgettable moment in their life as a Florida Gator — and sometimes their very first moment.
The Fishon family purchased on-field pre-game passes for Florida’s home game against Samford University. The game was a special one for them, as their young son, Tyler, had never been to the stadium before. They got to give him a front-row view to the scene of the action and likely made him a fan for life. To top it off, Florida won the game 70-52.
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-29018" src="https://assets.shift4.com/wp-content/uploads/2022/12/gators_03.png" alt="Shift4 customer case study the Florida Gators" width="768" height="432" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/gators_03.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/gators_03-300x169.png 300w" sizes="(max-width: 768px) 100vw, 768px" />
&nbsp;
<blockquote>
&#8220;I had no idea the feeling of a Swamp Moment until stepping foot on the field with my 3 year old for his first Gator game. Watching his face along with mine light up and feel the rush like being at The Swamp for the first time was the most memorable experience this New York Gator Nation fan will have.&#8221; 
</blockquote>
— Eric Fishon, Florida Gators Fan

Florida Gators: Giving Fans an Experience They’ll Never Forget

It&#8217;s not just retailers paving the way for contactless payments anymore. From travel and hospitality to casinos and gaming, nearly every industry is focusing on touchless commerce solutions. Let&#8217;s look at how we got here and why contactless payment technology is becoming table stakes for these industries rather than optional features.



<h2 class="wp-block-heading" id="h-the-surprising-history-of-contactless-payments">The Surprising History of Contactless Payments</h2>



How long do you think contactless payments have been around? Since the onset of the pandemic? Five years? A decade? Wrong!



<a href="https://www.investopedia.com/terms/c/contactless-payment.asp" target="_blank" rel="noreferrer noopener">This fast-growing technology</a> first appeared in the U.S. in 1997 when Mobil offered Speedpass — an electronic system that allowed customers to pay for gas with a special key fob — at participating gas stations. At the same time, Coca-Cola in Helsinki rolled out a vending machine that allowed users to pay for their beverage with an <a href="https://techbullion.com/mobile-wallet-origin-history-financial-technology/" target="_blank" rel="noreferrer noopener">SMS message via a mobile account</a> linked to a user&#8217;s device.



Today, contactless payments are used by thousands of national chains, small businesses, banks, and credit card companies worldwide. And while the widespread adoption was inevitable, the momentum it gained was accelerated by the COVID-19 pandemic. 



For instance, the pre-pandemic U.S. mobile and contactless payment adoption rate was about 10% —far below global levels. By contrast, during the first quarter of 2020, Mastercard reported a <a href="https://www.cnbc.com/2020/04/29/mastercard-sees-40percent-jump-in-contactless-payments-due-to-coronavirus.html" target="_blank" rel="noreferrer noopener">40% increase in contactless transactions</a>. Additionally, <a href="https://www.cnbc.com/select/mastercard-survey-contactless-payments/" target="_blank" rel="noreferrer noopener">according to consumer polling by Mastercard</a>, 51% of U.S. consumers are using cash less frequently (or not at all) since the pandemic began, opting instead to use tap-and-go payment methods and mobile wallets such as Apple Pay, Google Pay, and Samsung Pay.



It’s pretty clear that contactless payments is a technology that’s here to stay, so let’s take a closer look at how this next-gen payment trend works.



<h2 class="wp-block-heading">Contactless Payments: Secure, Efficient, and Effortless</h2>



<a href="https://usa.visa.com/pay-with-visa/contactless-payments/contactless-payments.html" target="_blank" rel="noreferrer noopener">According to Visa</a>, a contactless payment is a transaction made by tapping a contactless card or payment-enabled mobile or wearable device over a contactless-enabled payment terminal. 



This type of touchless technology is a secure way to purchase products or services using Radio Frequency Identification (RFID) or Near-Field Communication (NFC) technology. It is also referred to as “tap-and-go” by some banks and retailers for its swift communication that doesn&#8217;t require the consumer to enter a PIN or insert an EMV chip card. Yet, it relies on the same type of <a href="https://www.shift4.com/secure-technology" target="_blank" rel="noreferrer noopener">secure payment technology</a>: tokenization. 



As the <a href="https://www.prnewswire.com/news-releases/shift4-payments-inventor-of-tokenization-reaches-new-milestone-of-8-billion-tokenized-transactions-300637842.html#" target="_blank" rel="noreferrer noopener">trailblazer of payment tokenization</a>, this is something that we know a thing or two about. Simply put, tokenization is the process of replacing sensitive data — such as a consumer&#8217;s Personal Account Number (PAN) — into a random string of characters called a token. The token has no meaningful value if the merchant’s system is breached by data thieves. The actual cardholder data is secured off-site — often via <a href="https://www.cisco.com/c/en/us/products/security/encryption-explained.html" target="_blank" rel="noreferrer noopener">encryption</a> — in  a token vault database, which stores the relationship between the sensitive value and the randomized token.



Knowing how secure and efficient contactless payments are, it’s easy to understand why consumers have come to expect touch-free payments anywhere they do business.

&nbsp;

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" class="wp-image-28894" src="https://assets.shift4.com/wp-content/uploads/2022/10/contactless-payments_.woman-using-contactless-payment-to-pay-at-a-cafe_Shift4webp-1024x576.webp" alt="contactless payments_.woman using contactless payment to pay at a cafe_Shift4" srcset="https://assets.shift4.com/wp-content/uploads/2022/10/contactless-payments_.woman-using-contactless-payment-to-pay-at-a-cafe_Shift4webp-1024x576.webp 1024w, https://assets.shift4.com/wp-content/uploads/2022/10/contactless-payments_.woman-using-contactless-payment-to-pay-at-a-cafe_Shift4webp-300x169.webp 300w, https://assets.shift4.com/wp-content/uploads/2022/10/contactless-payments_.woman-using-contactless-payment-to-pay-at-a-cafe_Shift4webp-768x432.webp 768w, https://assets.shift4.com/wp-content/uploads/2022/10/contactless-payments_.woman-using-contactless-payment-to-pay-at-a-cafe_Shift4webp-1536x864.webp 1536w, https://assets.shift4.com/wp-content/uploads/2022/10/contactless-payments_.woman-using-contactless-payment-to-pay-at-a-cafe_Shift4webp-1568x882.webp 1568w, https://assets.shift4.com/wp-content/uploads/2022/10/contactless-payments_.woman-using-contactless-payment-to-pay-at-a-cafe_Shift4webp.webp 1601w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h2 class="wp-block-heading">Contactless Payments Are Everywhere You Are</h2>



Five or 10 years ago, contactless payment options were only seen at large retailers or hip hospitality locales —  even then, it was a rare sighting. Today, this consumer option is readily available for every industry and merchants of all sizes — including small business mom-and-pop shops. 



Here&#8217;s a look at how various industries use touch-free payment methods to enhance the overall consumer experience.



<h3 class="wp-block-heading">Travel &amp; Hospitality</h3>



<a href="https://www.shift4.com/hospitality" target="_blank" rel="noreferrer noopener">Hotels can leverage contactless payments</a> during check-in and check-out, and guests can often simply let the hotel know they’ve arrived via an app. A mobile room key can be generated and the entire process can be completed without any face-to-face contact.



And don’t forget about getting to the hotel. Many airlines, including Allegiant, are becoming completely cashless and rolling out contactless payment solutions for everything from ticket sales to in-flight purchases.



<h3 class="wp-block-heading">Food &amp; Beverage </h3>



Contactless payments are being leveraged by <a href="https://www.shift4.com/food-beverage" target="_blank" rel="noreferrer noopener">restaurants and bars</a> as a way to help guests and staff stay (and feel) safe. By implementing this technology, customers can pay without handing their card over, resulting in a faster and more secure transaction compared to traditional methods. These touch-free payments can include contactless terminals as well as <a href="https://www.shift4.com/qr-code-solutions" target="_blank" rel="noreferrer noopener">QR code ordering and payments</a>.



<h3 class="wp-block-heading">Sports &amp; Entertainment </h3>



Even large venues are getting in on the contactless strategy to create a better experience for fans. After all, if you’re attending a sporting event or concert for a few hours, you don’t want to spend half your time waiting in line for a beverage and missing all the action. 



Chicago’s United Center, home to the NBA’s Bulls and the NHL’s Blackhawks, understands this pain point and <a href="https://www.shift4.com/news/united-center" target="_blank" rel="noreferrer noopener">recently implemented contactless payment solutions</a> as part of their mission to enhance the in-venue fan experience. Transactions for everything from concessions, premiums, suites, and retail has been streamlined to help provide fans with a consistent, seamless interaction.



<h3 class="wp-block-heading">Gaming </h3>



Like any industry, gaming needs to embrace contactless payments if it wants to continue to grow. <a href="https://www.shift4.com/casinos-and-gaming" target="_blank" rel="noreferrer noopener">Enabling payment choices on the casino floor</a> does more than provide consumer flexibility. It also provides an unmatched and secure online gaming and sports-betting platform via an advanced payment platform, including live virtual casino floor games, daily and weekly poker tournaments, and a sportsbook interface.



<h3 class="wp-block-heading">Retail </h3>



<a href="https://www.shift4.com/retail" target="_blank" rel="noreferrer noopener">Contactless payments are omnipresent in retail</a>. Leveraging this technology allows retailers to focus on <a href="https://www.cnbc.com/2020/04/27/coronavirus-curbside-pickup-at-retail-stores-surges-208percent.html" target="_blank" rel="noreferrer noopener">curbside pickup</a>, which increased over 200% during the COVID-19 pandemic. Contactless payments reduce transaction time, shorten lines, and bring peace of mind to shoppers and employees wanting to avoid direct contact whenever possible.



<h2 class="wp-block-heading">Contactless Payments Are the Future</h2>



These contactless payment methods aren’t just a passing fad — they have proven to be a technology that benefits businesses and consumers alike. And while we may never become a fully fledged, cashless society, we are certainly inching closer every day.

&nbsp;

contactless payments_group of people checking nto hotel using contactless payment device

See How Contactless Payment Tech is Becoming Mainstream in Every Industry

In Berlin, Ohio (also known as the heart of Ohio Amish Country) there is a cozy yet luxurious hotel that lives in a unique tourist destination. The <a href="https://berlinencorehotel.com/" target="_blank" rel="noopener">Berlin Encore Hotel &amp; Suites</a> is a full-service vacation resort that is owned and operated by Mike Conn and his sons, Jeff and Braden.
Opening a hotel — like any large-scale venture — takes years of planning, and room for the unexpected. Luckily, when it came time to choose a property management system and payment processing solution, the family put their new business in good hands with two of the <a href="https://www.shift4.com/hospitality" target="_blank" rel="noopener">hospitality</a> industry’s most innovative, reliable, and secure platforms.
<h3>Finding the Perfect Partnership</h3>
The Conn family’s first choice for a property management solution was <a href="https://skytouchtechnology.com/" target="_blank" rel="noopener">SkyTouch Hotel OS</a> because of its cloud-based capabilities and rich features, including systems to manage room rates, reservations, housekeeping, billing, and much more. The ability to manage your hotel from anywhere — eliminating the need for expensive on-site servers and hardware — allows staff to manage and operate many properties at once. Live 24/7 customer support along with on-site and remote training options ensure staff comfort and confidence.
SkyTouch Technologies is a long-time partner with <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a>. The joint payment solution is secured by Shift4’s industry-renowned payment gateway technologies and offers unmatched functionality and stability. This includes their world-class EMV solution, tokenization (a technology they are credited with inventing), and PCI-validated point-to- point encryption (P2PE). Shift4 also brings to the table several unique features that are designed specifically to meet the payments needs of hospitality environments, including tokenized reservations.
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter wp-image-29015 size-full" src="https://assets.shift4.com/wp-content/uploads/2022/12/berlin-encore_01.png" alt="Shift4 case study Berlin Encore" width="768" height="432" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/berlin-encore_01.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/berlin-encore_01-300x169.png 300w" sizes="(max-width: 768px) 100vw, 768px" />
&nbsp;
When Shift4 announced the expansion of its offering to introduce a complete payment solution that provides payment processing, merchant services and payment terminals, SkyTouch was excited to pass these benefits on to their merchant customers. So, they began offering Shift4&#8217;s enhanced solution as an option with their integration.
<h3>Shift4 Delivers</h3>
An <a href="https://www.shift4.com/unified-commerce" target="_blank" rel="noopener">end-to-end solution</a> with complete payment processing integration from Shift4 and SkyTouch Technology includes:
<ul>
<li>Secure payment gateway</li>
<li>SkyTouch Hotel OS integration</li>
<li>Competitively prices merchant services</li>
<li>EMV Devices with lifetime free replacement warranty</li>
<li>24/7/365 customer support</li>
<li>One point of contact for all payment needs</li>
</ul>
<h3>The Benefits of Choosing the Right Solution</h3>
The implementation process was simple, fast, and seamless. Since all the payment hardware and software they needed came from SkyTouch and Shift4 themselves, the hotel didn’t have to worry about going to any outside parties for their payment terminals, key injection, gateway services, or business management software. To top it off, they were able to save time with the added convenience of having to make only one call to support any of their payments needs.
Ultimately, the Berlin Encore was able to open their hotel and start using all the features and technologies that the payment partnership had to offer. Shift4 and SkyTouch Technology delivered unmatched value with their solution, which covers the entire payment process, from before check-in to well after check-out.
<blockquote>
“It was really a pretty easy decision. We were able to get a whole lot more for less money, thanks to the money that we saved from our monthly transaction fees and the EMV devices that were included when we signed up. We started saving before we even opened our doors. And since we’ve been using Shift4 and SkyTouch together, having everything under one roof has been really nice.”
</blockquote>
&#8211; Braden Conn, Co-Owner and Operator, Berlin Encore Hotel &amp; Suites
&nbsp;

Shift4 case study Berlin-Encore Hotel & Suites

Berlin Encore: Payment Security & Cost Savings for an Ohio Hotel

It&#8217;s no surprise that debit and credit cards are the preferred payment methods — in-store and online — for millions of consumers. And the increased use of these payment methods has spurred an uptick in data breaches, cyber theft, and payment security awareness.



A <a href="https://www.jpmorgan.com/content/dam/jpm/commercial-banking/documents/fraud-protection/2021-afp-payments-fraud-and-control-survey-report-highlights.pdf" target="_blank" rel="noreferrer noopener">report sponsored by JP Morgan</a> noted that the increased use of digital transactions has increased cybercrime. In fact, almost 75% of organizations were targets of payment fraud attacks in 2020.



As a result of the increase in payments fraud, a study by Meticulous Research reports that the <a href="https://www.meticulousresearch.com/pressrelease/458/payment-security-market-2028" target="_blank" rel="noreferrer noopener">payment security market</a> is expected to reach $54.1 billion by 2028. 



Companies in industries such as eCommerce, travel and hospitality, food and beverage, and sports and entertainment, have always been targets of cybercriminals because their payment systems contain a wealth of customers&#8217; personal and financial data. 



What security solutions is your business implementing to protect your customers’ data and your brand? Read on to find out what steps you should take.



<h2 class="wp-block-heading" id="h-pci-compliance">PCI Compliance</h2>









To fully understand payment security, you first need to understand the origin. The <a href="https://www.pcisecuritystandards.org/about_us/" target="_blank" rel="noreferrer noopener">Payment Card Industry Security Standards Council (PCI SSC)</a> — or PCI for short — was established in 2006 by American Express, Discover, JCB International, Mastercard, and Visa. The council is a global forum that unites payment industry stakeholders to develop and drive the adoption of data security standards worldwide. 



Any business that processes or stores cardholder data must comply with PCI DSS (Data Security Standard) requirements. Depending on how your organization handles payments — card-present for in-person transactions and card-not-present for recurring or online payments — you can validate your compliance with a <a href="https://www.pcisecuritystandards.org/pci_security/completing_self_assessment" target="_blank" rel="noreferrer noopener">self-assessment questionnaire (SAQ)</a> or <a href="https://listings.pcisecuritystandards.org/assessors_and_solutions/qualified_security_assessors" target="_blank" rel="noreferrer noopener">qualified security assessor</a>. 



If this sounds complicated or intimidating to you, you’re not wrong. It’s a lot to digest at once, and it’s tricky navigating unfamiliar waters. Thankfully, payment processors and experts, like us at <a href="https://www.shift4.com/" target="_blank" rel="noreferrer noopener">Shift4</a>, can take on the responsibility of keeping your payment systems PCI compliant. We’ve even created a <a href="https://www.shift4.com/security-corner" target="_blank" rel="noreferrer noopener">Security Corner</a> to help businesses navigate the overwhelming world of PCI compliance.



<h2 class="wp-block-heading">What Is Payment Security? </h2>







Now that you understand how payment security is governed let’s talk about what it means for your business. 



In a nutshell, payment security is the measures companies take to protect their customers’ personal data and prevent fraudulent transactions. They are dynamic, multifaceted strategies happening in real-time to protect sensitive data. Here’s a look at these different layers.



<h3 class="wp-block-heading">Card-Present Security</h3>







<h4 class="wp-block-heading">EMV</h4>







Your first line of defense is an EMV payment terminal for card-present transactions. EMV is short for Europay, Mastercard, and Visa — named after the founders who created this payment technology standard. Often referred to as a chip card or smart card, EMV cards have a small microprocessor or chip that stores data and makes it nearly impossible for potential thieves to replicate with counterfeit cards.



<h4 class="wp-block-heading">Point-to-Point Encryption</h4>







Another safeguard for credit card transactions is Point-to-Point Encryption or P2PE for short. P2PE <a href="https://www.cloudflare.com/learning/ssl/what-is-encryption/" target="_blank" rel="noreferrer noopener">encrypts</a> the cardholder’s data at the point of capture and throughout the entire transaction journey until it reaches the secure decryption endpoint. With P2PE, card data never enters the merchant’s system. Shift4 takes it a step further with PCI-validated P2PE, which requires a higher level of security and dramatically reduces your organization’s <a href="https://www.controlcase.com/how-to-define-pci-dss-scope/" target="_blank" rel="noreferrer noopener">PCI DSS scope</a>.



<h4 class="wp-block-heading">Tokenization</h4>







As the <a href="https://www.shift4.com/news/shift4-payments-inventor-of-tokenization-reaches-new-milestone-of-8-billion-tokenized-transactions" target="_blank" rel="noreferrer noopener">inventor of payment tokenization</a>, we know that tokenization is one of the most important steps you can take to protect your customers when it comes to sensitive payment data. 



Tokenization replaces the cardholder&#8217;s Personal Account Number (PAN) with a random, alphanumeric value known as a &#8220;token.&#8221; The token value has absolutely no connection to the PAN it represents. Therefore, it cannot be reverse-engineered. Only a payment gateway or token vault can identify the 1:1 relationship between the PAN and the token.



As part of Shift4’s end-to-end payment solution, these three technologies work together to seamlessly deliver the strongest security possible throughout the entire transaction — and long after.








<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="576" class="wp-image-28897" src="https://assets.shift4.com/wp-content/uploads/2022/10/payment-security-diagram-of-security-processes_Shift4-1024x576.png" alt="" srcset="https://assets.shift4.com/wp-content/uploads/2022/10/payment-security-diagram-of-security-processes_Shift4-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2022/10/payment-security-diagram-of-security-processes_Shift4-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2022/10/payment-security-diagram-of-security-processes_Shift4-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2022/10/payment-security-diagram-of-security-processes_Shift4-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2022/10/payment-security-diagram-of-security-processes_Shift4-2048x1152.png 2048w, https://assets.shift4.com/wp-content/uploads/2022/10/payment-security-diagram-of-security-processes_Shift4-1568x882.png 1568w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></div>


<h3 class="wp-block-heading">Card-Not-Present Security</h3>







<h4 class="wp-block-heading">Card Verification Value (CVV)</h4>







If you&#8217;ve ever made a purchase online or added value to a mobile device app like Dunkin&#8217; or Starbucks, you&#8217;re already familiar with your payment card&#8217;s CVV. The Card Verification Value — or CVV for short — is the three- or four-digit code on the front or back of your credit or debit card. 



A CVV code is typically requested for card-not-present transactions as an additional security measure to ensure that the card is in the hands of the rightful owner. 



<h4 class="wp-block-heading">Address Verification Service (AVS)</h4>







Another safeguard for eCommerce transactions is address verification. For example, when you place an order online, you are asked to enter a shipping address and your billing address. 



The billing address request confirms that the information you&#8217;re supplying matches the information on file with the card issuer. If it&#8217;s a complete mismatch or partial mismatch, the transaction can be declined. 



<h4 class="wp-block-heading">Secure Socket Layer (SSL)</h4>







Lastly, we have <a href="https://blog.shift4shop.com/do-i-need-an-ssl-certificate-for-my-website-blog-or-ecommerce-store" target="_blank" rel="noreferrer noopener">SSL certificates</a>, a security protocol for online transactions that encrypts information sent over the internet. Have you ever noticed a small lock icon in the address bar of your web browser? Or have you seen a web address that starts with HTTPS? If so, you can rest assured that the website is using SSL and the information you share is protected.



<h2 class="wp-block-heading">Why Payment Security Is Important for Your Business</h2>







Implementing the appropriate payment security can make or break any business. A company could spend years establishing itself as a trustworthy brand, then lose it all in an instant because of a payment system breach.



Once your company&#8217;s security has been breached, not only do you lose your data, but you also lose the trust of your customers — trust that likely took years to gain. The last thing your customers want is to spend hours dealing with fraudulent charges — or worse: identity theft —because they used their cards in your store or on your website.



Customers who entrust businesses with their money and personal information also trust that those companies will provide them with secure and seamless buying experiences. Furthermore, you may also run the risk of damaging your relationships with your business partners and service providers.



In addition to tarnishing your reputation, payment fraud can cost your business financially. Depending on the size of a company and the circumstances surrounding the breach, fines can be as high as $500,000 per incident — or sometimes more. The banks may also increase transaction fees or terminate relationships altogether. 



Do you remember the <a href="https://www.reuters.com/article/us-target-cyber-settlement/target-in-18-5-million-multi-state-settlement-over-data-breach-idUSKBN18J2GH" target="_blank" rel="noreferrer noopener">Target data breach</a> in 2013? After a 47-state settlement, Target agreed to pay $18.5 million in settlement claims. In fact, when all was said and done, Target said they had lost a total of more than $200 million due to the breach. While this may not cripple a large retailer into bankruptcy, it&#8217;s undoubtedly a massive blow to their bottom line.  &#8220;Threats to payment card data continue to increase and impact the payment security landscape in numerous — and increasingly insidious — ways,&#8221; according to Verizon&#8217;s <a href="https://www.verizon.com/business/resources/reports/2020/2020-payment-security-report.pdf?_ga=2.252000073.1916550669.1642034038-364110983.1640037657" target="_blank" rel="noreferrer noopener">2020 Payment Security Report</a>. &#8220;The negative disruption from payment security data breaches can have a temporary or lasting impact on an organization’s sales and company stock price and reputation.&#8221;



<h2 class="wp-block-heading">How to Protect Your Business</h2>







When it comes to protecting your business and cardholder data, it’s best to take a layered approach to payment security by implementing the multiple strategies mentioned above. This type of approach is precisely what we do at Shift4 with our <a href="https://www.shift4.com/secure-technology" target="_blank" rel="noreferrer noopener">industry-leading secure technologies</a>. 



Our layered approach to credit card security and best-in-class payment solutions protect customer data from end to end, providing both merchants and customers with unmatched security — and peace of mind. 



<h2 class="wp-block-heading">Final Thoughts</h2>







As the landscape evolves and hackers become more sophisticated, merchants must remain vigilant in the fight against fraud and data breaches. Protecting sensitive customer data should remain a priority — and choosing the best in-store and online payment security solutions can certainly support this objective.

payment security man standing in server room_Shift4

Payment Security: Everything You Need to Know to Protect Your Business

RAKS Building Supply, a lumber yard and hardware store company with multiple locations in New Mexico, works closely with contractors and homeowners as they make improvements to their homes. They had been using <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a> as their gateway, securing their customers’ transactions with Shift4’s <a href="https://www.shift4.com/secure-technology" target="_blank" rel="noopener">payment security technologies</a> like tokenization and PCI-validated point-to-point encryption.
Shift4’s integration with <a href="https://www.epicor.com/en-us/industry-productivity-solutions/building-supply-software/platforms/bistrack/" target="_blank" rel="noopener">Epicor’s BisTrack</a> point-of-sale software led them to Shift4 originally. Having a compatible integration with BisTrack was the biggest selling point, which allowed them to save time and prevented the frustration of seeking out and integrating a new system.
<h3>Operational Improvements</h3>
They decided to go beyond Shift4’s gateway-only solution and deployed their end-to-end payment processing ecosystem, which delivers all the hardware, software, and third-party integrations that <a href="https://www.raks.com/" target="_blank" rel="noopener">RAKS</a> needed to accept transactions — all from a single source and at a lower cost. This is their first experience implementing an integrated payment approach for their business, and they have been thrilled with the difference that it has made to their day-to-day operations as well as their bottom line.
<h3>Favorite Features and Improvements</h3>
<ul>
<li>Lighthouse Transaction Manager</li>
<li>Universal Transaction Gateway</li>
<li>Quicker and More Efficient Reconciliation</li>
<li>Card on File with Tokenization</li>
<li>Monthly Cost Savings</li>
<li>Accepting Contractor Payments Over the Phone</li>
</ul>
<h3>Benefits of Shift4’s End-to-End Solution</h3>
Typically, when a business wants to set up a payment processing system, they need to work with a different vendor for each of the components: point of sale, gateway, devices, key injection, processor, etc. This — by design, unfortunately — often leads to a drawn-out process with a lot of room for complications, miscommunication, delays, and unexpected costs.
Instead, Shift4 has rethought this entire process, delivering all these pieces together — from a single source. By cutting the multiple vendors out of the equation, what used to be an implementation of weeks or months now takes only days. What’s more, it comes as a complete, cohesive solution with components that are already designed to work seamlessly together.
&nbsp;
<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-29019" src="https://assets.shift4.com/wp-content/uploads/2022/12/raks_01.png" alt="Shift4 case study Raks Building Supply" width="768" height="432" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/raks_01.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/raks_01-300x169.png 300w" sizes="(max-width: 768px) 100vw, 768px" />
&nbsp;
As RAKS made the transition from piece-meal payments to Shift4’s fully integrated, connected ecosystem, their installation and implementation process went quickly and smoothly. Since everything was coming directly from Shift4, they didn’t have to worry about any of the hardware or software being incompatible. Plus, Shift4’s comprehensive Installations and Support teams were able to assist with every component.
<blockquote>
“Shift4’s staff was helpful and available to address questions or concerns. It has also proven to be very user-friendly. The change has been an improvement for our company.”
</blockquote>
<center>— Bobby Trujillo, Systems Administrator, RAKS Building Supply</center>

RAKS Building Supply: End-to-End Payments Improve Operations

Does your business have multiple streams of revenue? If you operate a hotel, reservations are one revenue center and the on-premise restaurant is another. Or perhaps you run a retail store but also sell merchandise online. Your brick-and-mortar store and your eCommerce store are individual revenue centers.



If this is how your business operates, you have multiple revenue centers, and it’s time to start thinking about unifying them. From a daily operational standpoint to a more seamless accounting process, unifying revenue centers will allow you to work smarter, not harder. 



<h2 class="wp-block-heading" id="h-what-is-a-revenue-center">What is a Revenue Center?</h2>



Each distinguished area of your business where sales occur is considered a revenue center. For instance, a hotel or resort is the perfect example of a business with multiple revenue streams.



<h3 class="wp-block-heading" id="h-reservations">Reservations</h3>



When guests book a room on your property, the income generated from their reservation is a revenue stream. This segment can be further broken down into more function-specific units such as direct reservations, online reservations, and third-party reservations on platforms like Expedia or Tripadvisor. 



<h3 class="wp-block-heading" id="h-dining">Dining</h3>



Most hotels and resorts have multiple dining options that produce revenue. Just like with reservations, these profit centers can be further segmented into smaller units including room service and individual locations like the pool bar or the five-star restaurant. 



<h3 class="wp-block-heading" id="h-retail">Retail</h3>



Hospitality properties have one or multiple retail outlets (e.g., gift shop) that’s considered its own revenue stream. 



<h3 class="wp-block-heading" id="h-event-center">Event Center</h3>



If your property rents out designated areas for private events, you can consider these separate revenue centers as well.



<h3 class="wp-block-heading" id="h-golf-course">Golf Course</h3>



Did someone say tee time? Golfers will not only pay to hit the links, but if you have a pro shop and a nineteenth hole (clubhouse bar), you can also consider these additional revenue streams. 



<h3 class="wp-block-heading" id="h-spa">Spa</h3>



Last but not least, if you have an in-house spa you’ll want to include any services and retail products as an additional source of revenue.



&nbsp;



<h2 class="wp-block-heading" id="h-the-wrap-up">The Wrap Up</h2>

Unifying your revenue centers is well worth the effort. It streamlines operations and reduces costs for business owners, and provides a seamless payment experience for your customers. 



<figure class="wp-block-image aligncenter">
<figure id="attachment_28877" aria-describedby="caption-attachment-28877" style="width: 750px" class="wp-caption aligncenter"><img decoding="async" loading="lazy" class="wp-image-28877 size-large" src="https://assets.shift4.com/wp-content/uploads/2011/04/revenue-center-01_diagram-of-various-revenue-centers-within-a-business-1024x576.png" alt="revenue center diagram showing various revenue centers in a business" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2011/04/revenue-center-01_diagram-of-various-revenue-centers-within-a-business-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2011/04/revenue-center-01_diagram-of-various-revenue-centers-within-a-business-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2011/04/revenue-center-01_diagram-of-various-revenue-centers-within-a-business-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2011/04/revenue-center-01_diagram-of-various-revenue-centers-within-a-business-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2011/04/revenue-center-01_diagram-of-various-revenue-centers-within-a-business-2048x1152.png 2048w, https://assets.shift4.com/wp-content/uploads/2011/04/revenue-center-01_diagram-of-various-revenue-centers-within-a-business-1568x882.png 1568w" sizes="(max-width: 750px) 100vw, 750px" /><figcaption id="caption-attachment-28877" class="wp-caption-text">Various revenue centers of a business</figcaption></figure>
</figure>

<h2 class="wp-block-heading" id="h-revenue-center-vs-cost-center-what-s-the-difference">Revenue Center vs. Cost Center — What&#8217;s the Difference?</h2>



If we’re talking about revenue centers, it’s only fair to mention cost centers, too. 



While a revenue center is directly responsible for generating revenue, a <a href="https://www.investopedia.com/terms/c/cost-center.asp#" target="_blank" rel="noopener">cost center</a> is an area of business that is essential for operations, but doesn’t directly generate revenue for the company. Cost centers can be (but are not limited to) the HR department, the IT department, and the Maintenance department. 



<h2 class="wp-block-heading" id="h-why-is-unifying-revenue-centers-important">Why is Unifying Revenue Centers Important?</h2>



Now that you’ve taken the time to define your revenue centers and understand the importance of doing so, let’s talk about unifying them. 



Separate revenue streams don’t mean separate payment processes — it actually means the opposite. Carving out and tracking individual revenue centers is hard enough. You don’t want to overcomplicate the matter by working with multiple vendors to solve the singular problem of accepting payments.  



Think about it. When it comes to accepting payments, you are potentially dealing with a minimum of six different vendors:



<ul>
<li style="font-weight: 400;" aria-level="1">Hardware vendors for Point-of-Sale (POS) systems or credit card terminals</li>
<li style="font-weight: 400;" aria-level="1">A PCI-validated Key Injection Facility (KIF) that coordinates with the hardware vendor and injects the encryption keys into the terminals</li>
<li style="font-weight: 400;" aria-level="1">Software vendors for the POS or Property Management System (PMS) application &#8211; PLUS you could potentially have different software vendors for each revenue center (PMS software, reservation software, retail POS, golf course software, spa software)</li>
<li style="font-weight: 400;" aria-level="1">A payment processor so you can accept credit card payments and generate the actual revenue</li>
<li style="font-weight: 400;" aria-level="1">A payment gateway for the <a href="https://www.shift4.com/secure-technology">secure technology</a> to transmit payment card details to your payment processor </li>
<li style="font-weight: 400;" aria-level="1">Additional business management apps such as accounting software programs</li>
</ul>



Depending on your unique business requirements, the number of vendors you rely on to conduct your day-to-day business can grow exponentially. As a result, not only can each vendor be a potential breaking point in the payment processing chain, but you’re probably paying redundant fees, too. 



If your POS hardware malfunctions, the software is inoperable. If your payment processor experiences an outage, you can no longer accept card payments from your POS system. These issues and others can hinder your operations and cause a loss of revenue. Not to mention, you’ll have multiple vendors to deal with to correct the problem.



Check out the diagram below that highlights potential breaking points and additional costs associated with this type of set up. 


<div class="wp-block-image wp-image-28889 size-medium">
<figure class="aligncenter"><img decoding="async" loading="lazy" width="898" height="499" class="wp-image-28889" src="https://assets.shift4.com/wp-content/uploads/2011/04/Implementation_Before.png" alt="Revenue centers potential breaking points diagram" srcset="https://assets.shift4.com/wp-content/uploads/2011/04/Implementation_Before.png 898w, https://assets.shift4.com/wp-content/uploads/2011/04/Implementation_Before-300x167.png 300w, https://assets.shift4.com/wp-content/uploads/2011/04/Implementation_Before-768x427.png 768w" sizes="(max-width: 898px) 100vw, 898px" /></figure></div>


Why not simplify and streamline processes so you can remove the unnecessary parts? With a vendor like <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a>, you can do just that. 



We maintain integrations with more than 450 commerce-enabling software solutions to deliver a <a href="https://www.shift4.com/unified-commerce" target="_blank" rel="noopener">unified commerce experience</a> and simplify complex payment ecosystems. And if something goes wrong, you won’t have to track down half a dozen different vendors to fix the issue — if they can even agree on what the issue is.



Instead, one call to us is all you’ll need to make. Payments are finally simple.



&nbsp;


<div class="wp-block-image wp-image-28891 size-full">
<figure class="aligncenter is-resized"><img decoding="async" loading="lazy" class="wp-image-28891" src="https://assets.shift4.com/wp-content/uploads/2011/04/Implementation_After.png" alt="revenue centers no breaking points with Shift4" width="494" height="170" srcset="https://assets.shift4.com/wp-content/uploads/2011/04/Implementation_After.png 494w, https://assets.shift4.com/wp-content/uploads/2011/04/Implementation_After-300x103.png 300w" sizes="(max-width: 494px) 100vw, 494px" /></figure></div>




<h2 id="h-the-wrap-up">The Wrap Up</h2>

Unifying your revenue centers is well worth the effort. It streamlines operations and reduces costs for business owners, and provides a seamless payment experience for your customers.

What is a Revenue Center? Should You Unify Yours?

If you’re not making the most of your gift card program (or have yet to implement one), you’re missing out on some serious revenue potential. Gift cards are steadily increasing in popularity year over year, with the <a href="https://www.statista.com/statistics/1004280/gift-cards-market-value-worldwide/" target="_blank" rel="noopener">U.S. market expected</a> to reach $510 billion in 2025. 
No matter what type of business you operate, you can’t afford to miss out on the equity that comes with building an effective gift card program. 
Here’s a look at how you can optimize this area of your business and make it successful.
<h2>What is a Gift Card Program?</h2>
A <a href="https://www.shift4.com/gift-card-program" target="_blank" rel="noopener">gift card program</a> allows businesses to sell (issue) gift cards redeemable for goods or services. If a gift card is only redeemable at your business, it’s considered a closed-loop gift card program. 
On the other end of the spectrum, open-loop gift card programs are redeemable anywhere. For example, gift cards with a card network logo like Visa or American Express are considered open-loop gift cards. Therefore, they are redeemable at any business that accepts those types of payment cards.
<h2>What are the Benefits of a Gift Card Program?</h2>
A gift card program is a cost-effective way to boost revenue, drive customer loyalty, and build brand awareness. They can also be a lifeline for your business during a time of crisis, such as the <a href="https://www.shift4.com/news/shift4-payments-launches-shift4cares-com-to-raise-over-200-million-for-small-businesses-and-highlight-economic-impact-of-covid-19" target="_blank" rel="noopener">COVID-19 pandemic</a>.  
Let’s explore some of the game-changing benefits of these magical little vouchers.
<h3>Build Brand Awareness</h3>
When you’re looking for a new restaurant to try, a new vacation destination, or need some work done around the house, who are the first people you reach out to for suggestions? 
If your answer is friends or family, you’re in good company. A <a href="https://blog.hubspot.com/blog/tabid/6307/bid/30239/71-More-Likely-to-Purchase-Based-on-Social-Media-Referrals-Infographic.aspx" target="_blank" rel="noopener">Hubspot survey</a> found that 90% of respondents trust suggestions from friends and family. We inherently trust our loved ones, so their recommendations, experiences, and implicit <a href="https://everyonesocial.com/blog/word-of-mouth-marketing-stats/" target="_blank" rel="noopener">word-of-mouth marketing</a> is meaningful. 
A gift card program extends this type of marketing and is a great way to build brand awareness. For example, let’s say a first-time customer, Jane, walks into your restaurant. She has the trifecta of an overall great experience — the food is delicious, the service is on point, and your prices are reasonable. Not only did you start the customer journey off on the right foot, but you’re (most-likely) creating a repeat customer and laying the foundation of building brand awareness.  
Now, let’s say a month goes by, and Jane needs a last-minute birthday gift for her friend John and wants to pick up something local on the way to the party. So she runs through a mental checklist of businesses she likes and cross-checks that with ones she thinks John will also enjoy. She recalls the great experience she had while dining at your restaurant, and decides to buy John a gift card. 
Jane pops into your restaurant and buys a gift card for John — a $50 value. Upon receipt, John tells Jane he’s seen your restaurant driving around town but has never been there to dine. Now, armed with a gift card, he has an incentive to check it out.
<h3>Boost Your Bottom Line</h3>
Building brand awareness goes hand in hand with boosting your bottom line. The more people that know about your restaurant, the more potential you have to grow your customer base. Getting back to our Jane and John example, let’s see how the domino effect of a $50 gift card plays out. 
After a long work week, John brings his family of four to your restaurant for dinner on Friday night. After they order drinks, an app, and their entrees, the check comes to $120 (not including gratuity, of course). Already, John is spending $70 more than the amount of his gift card. 
In fact, 65% of <a href="https://www.giftcards.com/gift-card-statistics" target="_blank" rel="noopener">gift card recipients</a> spend 38% more than the gift card balance, so John’s spending habits are on par with most gift card recipients. If situations like this continue to play out over the course of the year, you’ll see a steady boost to your cash flow and your bottom line.
<h3>Drive Customer Loyalty</h3>
If customers have a good experience at your restaurant, there’s a high probability that they’ll return again and again. 
Just like Jane, the restaurant made a good first impression on John and it’s highly likely that he’ll be back for another meal in the future. In this case, not only did a new customer spend more than double the amount of the gift card, but you also gained a new patron. 
Another way to leverage a gift card program to drive customer loyalty is to use it in conjunction with your <a href="https://www.skytab.com/features/loyalty-and-marketing/" target="_blank" rel="noopener">customer loyalty program</a>. For instance, every time a customer spends $500 at your restaurant, they get a $15 gift card to use on their next visit. 
<img decoding="async" loading="lazy" class="aligncenter wp-image-28883 size-large" src="https://assets.shift4.com/wp-content/uploads/2015/01/gift-card-program_happy-customer-showing-her-gift-card-1024x576.png" alt="gift card program Shift4Gift happy customer showing her gift card" width="750" height="422" srcset="https://assets.shift4.com/wp-content/uploads/2015/01/gift-card-program_happy-customer-showing-her-gift-card-1024x576.png 1024w, https://assets.shift4.com/wp-content/uploads/2015/01/gift-card-program_happy-customer-showing-her-gift-card-300x169.png 300w, https://assets.shift4.com/wp-content/uploads/2015/01/gift-card-program_happy-customer-showing-her-gift-card-768x432.png 768w, https://assets.shift4.com/wp-content/uploads/2015/01/gift-card-program_happy-customer-showing-her-gift-card-1536x864.png 1536w, https://assets.shift4.com/wp-content/uploads/2015/01/gift-card-program_happy-customer-showing-her-gift-card-1568x882.png 1568w, https://assets.shift4.com/wp-content/uploads/2015/01/gift-card-program_happy-customer-showing-her-gift-card.png 1601w" sizes="(max-width: 750px) 100vw, 750px" />
<h2>How to Manage a Gift Card Program?</h2>
To have a successful gift card program, you’ll need to find the most effective way to manage it. There are a lot of moving pieces when it comes to gift card sales, and here are a few things you’ll need to know.
<h3>Issuing</h3>
From a business perspective, when customers purchase gift cards, it’s known as issuing. Your business is issuing a gift card with a predetermined balance that you’re collecting payment for at the time of purchase.
<h3>Redemption</h3>
On the other hand, when customers actually spend the gift card, it&#8217;s known as redemption. They&#8217;re redeeming goods or services in the amount of (and often exceeding) the card&#8217;s value. 
<h3>Balances</h3>
Here&#8217;s where it gets tricky. Suppose the gift card is not redeemed for the total value during a transaction. In that case, it&#8217;s your responsibility as the business owner to keep track of the balance left on the card. Imagine doing that for every single card you issue.
<h3>Replenishment </h3>
Some physical gift cards are reloadable, so you can repeatedly add funds to an existing card. 
A <a href="https://www.skytab.com/" target="_blank" rel="noopener">Point-of-Sale (POS) system</a> is the absolute best way to manage a gift card program in these digital times. All of the details above are tracked automatically with a POS system.
Most POS solutions have a proprietary gift card program or integrate directly with a third-party provider. While you may pay a small transaction fee (as in pennies) to process gift cards, the automation of these card management processes is vital to being successful and worth every penny.
<h2>Physical and Digital Gift Cards</h2>
Since you’ll be managing the gift card program via your point-of-sale system, it’s important to ensure that your provider offers both physical and digital gift card options. Even though we&#8217;re primarily a digital-first society, we still have analog tendencies. So make sure you&#8217;re serving both types of customers, so you don&#8217;t miss out on any sales.   
<h2>Marketing Campaigns</h2>
Speaking of sales, how will you ever sell any gift cards if nobody knows you offer them? Recurring marketing campaigns around your gift card program is a great way to get the word out.
<h3>Digital Marketing</h3>
Whether you send an email blast to your existing customers or use social media to spread the word, you’ll want to invest the time (and maybe a few dollars) in promoting the program. This is especially important around the many holidays throughout the year when gift-giving is a customary tradition. 
<h3>Traditional Marketing</h3>
You can also explore more traditional methods like internal and external signage. When customers walk through the door, it doesn&#8217;t hurt to let them know gift cards are available for purchase. A small sticker on the door, a display, or digital signage are great ways to bring awareness to your gift card program. 
<h3>Special Promotions</h3>
Expanding on leveraging gift cards with your customer loyalty program, you can take it a step further. You can run special promotional periods or gift card incentives on specific items. For instance, for every $50 gift card purchase between May 1st and July 1st, the purchaser gets a $10 bonus gift card. 
<h2>Final Thoughts</h2>
As one of the more popular gift ideas and a cost-effective way to open up a new revenue channel, optimizing your gift card program is a no-brainer. If you’re not marketing your gift card program to the fullest, now is the time to start.

grift card program Shift4Gift business owner using gift cards

Learn How to Get the Most Out of Your Gift Card Program

Inside Washington’s Mount Rainier National Park, <a href="https://whittakermountaineering.com/" target="_blank" rel="noopener">Whittaker Mountaineering</a> is the place to go for the park’s more adventurous guests to prepare for their journeys to the summit. Founded by lifelong climbers and guides — and twin brothers — Jim and Lou Whittaker, the store rents and sells clothing and equipment to park guests as well as online.
Much of the clothing for sale is the company’s own clothing line, Bight Gear. They decided to overhaul many of their operational processes, one of which is their payment system. <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a> was able to be their guide as they implemented a number of hardware and software improvements, thanks to Shift4’s <a href="https://www.shift4.com/unified-commerce" target="_blank" rel="noopener">end-to-end payment solution</a>.
<h3>Building on a Quality Business Relationship</h3>
Before Whittaker Mountaineering became a Shift4 customer, the two companies crossed paths several times over the years. Members of the Shift4 leadership team have climbed Mount Rainier as well as Vinson Massif in Antarctica with <a href="https://www.rmiguides.com/" target="_blank" rel="noopener">RMI Expeditions</a> — Jim and Lou’s company that provides guided climbs. Many of Shift4’s employees have also been to Rainier BaseCamp (home of Whittaker Mountaineering and RMI), and rented gear from the store for their Rainier climbs.
<div class="react-reveal content-block--content-text">
<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-29021" src="https://assets.shift4.com/wp-content/uploads/2022/12/whittaker_01.png" alt="Shift4 case study Whittaker Mountaineering" width="768" height="432" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/whittaker_01.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/whittaker_01-300x169.png 300w" sizes="(max-width: 768px) 100vw, 768px" />
Whittaker Mountaineering switched their point-of-sale (POS) system to <a href="https://www.wintersteiger.com/en/Ski-Service-Rental-and-Lockers">Wintersteiger Easyrent</a>, which happens to be one of Shift4’s <a href="https://www.shift4.com/partners" target="_blank" rel="noopener">third-party integration partners</a>. This provided Whittaker with an opportunity to adopt the rest of Shift4’s payment processing ecosystem, which provides everything a business needs to accept payments from a single source. Whittaker was able to use Shift4 as the only vendor for their entire payment system, including free key-injected EMV devices, gateway and encryption solutions, processor connection, eCommerce platform, and more.
This approach saved them the trouble of having to deal with a separate company for each of those components, which leads to miscommunication, delays, and higher costs. Shift4’s single-vendor implementation makes the process much simpler and more cost-effective.
</div>
<h3>The Cost Savings Were Immediate</h3>
The most noticeable benefit when businesses employ Shift4’s end-to-end solution is how competitive the rates and prices really are. Since Shift4 is the provider of all the payment processing components, they are able to be flexible with the pricing in ways that just aren’t possible with a multi-vendor implementation, with each vendor only able to control the pricing in their own section of the payment process.
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<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-29022" src="https://assets.shift4.com/wp-content/uploads/2022/12/whittaker_02.png" alt="Shift4 case study Whittaker Mountaineering" width="768" height="432" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/whittaker_02.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/whittaker_02-300x169.png 300w" sizes="(max-width: 768px) 100vw, 768px" />
<h3>Operational Improvements</h3>
The cost savings were not the only improvements the business saw. It has become a lot easier and faster to check out customers. The store was able to implement several additional revenue streams and payment methods that they didn’t have before Shift4. In upgrading to new customer-facing contactless EMV terminals, they can accept NFC payments like Apple Pay, which they say has helped them tremendously. They also made improvements to their card-not-present revenue centers, including a brand-new website, eCommerce store, and a more integrated phone order system (i.e., no more having to write credit cards down on a paper order form).
With all these new and improved systems in place, Whittaker Mountaineering is now running smoother than ever, with happier customers and a bigger bottom line.
<blockquote>
“A good percentage rate and the customer-facing contactless terminals are the obvious benefits. However, it was pretty cool to get an email directly from Jared, the CEO, giving us a shout-out for switching to Shift4 and opening the door to go directly to him if we needed any assistance. We love the team at Shift4 and are really happy to be on board with a company that is helping small businesses save money.”
</blockquote>
— Kerry Whittaker, Director of Operations Whittaker Mountaineering

Shift4 Case Study Whittaker Mountaineering

Whittaker Mountaineering: Elevates Cost Savings & Additional Revenue Streams

Tanglewood Resort sits alongside Lake Texoma in northern Texas, right on the border with Oklahoma. Because of their location, the full-service resort and conference center has incorporated a unique combination of lakeside views, fine dining, spa services, lake activities, a championship golf course, and a host of outdoor activities like hiking, boating, fishing, horseback riding, and more.
Tanglewood is often the destination for large groups of guests, and their experienced staff is there to make sure the stay is memorable.
<h3>Taking the Leap to Single Source Payments</h3>
In 2018, <a href="https://www.tanglewoodresort.com/" target="_blank" rel="noopener">Tanglewood Resort</a> made the decision to switch to the complete payment processing solution from long-time partners <a href="https://www.shift4.com/" target="_blank" rel="noopener">Shift4</a> and <a href="https://springermiller.com/" target="_blank" rel="noopener">Springer-Miller Systems</a>. The resort was already a customer of Shift4 and Springer-Miller, using their secure payment gateway and property management system, respectively. However, this new offering from the partnership delivered additional services that tied it all together: merchant services, secure gateway, P2PE-enabled card readers, device injection and management, auditing, accounting, reporting, and much more.
Combining these services opens up possibilities to eliminate redundant costs. Prior to moving to a single-source solution, Tanglewood Resort had been utilizing a piecemeal approach to their payment processing, meaning they coordinated with (and got a bill from) a different service provider for each of their payment services separately.
When they started utilizing the all-in-one approach from Shift4 and Springer-Miller, they found out how much easier and cost-efficient their payments could actually be.
<h3>Delivering an End-to-End Solution</h3>
Shift4 and Springer-Miller Systems deliver an integrated solution that helped Tanglewood Resort cut costs and improve operations.
<ul>
<li>Waived Gateway Fees</li>
<li>Free EMV Devices</li>
<li>Full Integration</li>
<li>Streamlined Support</li>
<li>Savings</li>
<li>Business Intelligence</li>
<li>Simplified Implementation</li>
</ul>
<h3>The Advantages of Bringing Payments Under One Roof</h3>
Although making such a significant change was intimidating, the execution and implementation were completed on schedule, without any issues or system downtime, and the benefits went into effect immediately. From waived gateway fees alone, the property was able to save an average of $400 per month. Additionally, they were able to replace every PIN pad device on the entire resort with EMV- and P2PE-capable payment terminals, including signature capture devices at the front desk to reduce chargebacks.
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<img decoding="async" loading="lazy" class="aligncenter size-full wp-image-29020" src="https://assets.shift4.com/wp-content/uploads/2022/12/tanglewood_01.png" alt="Shift4 customer case study Tanglewood resort" width="768" height="432" srcset="https://assets.shift4.com/wp-content/uploads/2022/12/tanglewood_01.png 768w, https://assets.shift4.com/wp-content/uploads/2022/12/tanglewood_01-300x169.png 300w" sizes="(max-width: 768px) 100vw, 768px" />
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Another one of the major operational improvements the resort experienced was streamlined customer support. As an <a href="https://www.shift4.com/unified-commerce" target="_blank" rel="noopener">all-in-one payments provider</a>, Shift4 gives businesses one number to call to resolve any issues, as opposed to having to make multiple calls to various providers to track down which was responsible for the issue.
After successful integration, installation, and pilot, Tanglewood Resort is experiencing daily the countless benefits that have come with uniting their payments through the proven partnership of two industry leaders.
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<blockquote>
“When a group of 300 guests arrives at the property, it’s really nice not having to worry about our payments and just focus on the guest experience. The products from Springer-Miller System and Shift4 Payments work really well together and are always reliable.”
</blockquote>
— Magan Crowley, Guest Relationships Manager &amp; Memberships Coordinator, Tanglewood Resort
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Why You Should Offer Multiple Payment Methods at Checkout

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