<div class="BlackBoxSection_bullet-points-blue__6CIYA">
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.
&nbsp;
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">How Do OCT Payouts Work?</h2>
Making a credit of funds is as easy as putting in the card data, and the CVV — 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:
<ol class="ml-[1rem] list-decimal">
<li>
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).
</li>
<li>
Submitting Transaction Details: Shift4 instantly sends transaction details to the acquiring bank.
</li>
<li>
Receiving Funds: Within 2 business days, money is on the customer&#8217;s credit or debit card.
</li>
</ol>
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.
</div>
&nbsp;
<h2 class="text-xl font-bold md:text-4xl mt-12 mb-8">Seconds Instead of 2 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.
&nbsp;
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
&nbsp;
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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:
<ul class="ml-[1rem]">
<li>
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 the issuing banks 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>
<li>
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>
<li>
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.
</li>
<li>
Simplicity
There&#8217;s no need to provide a bank account number — the card data is all it takes to complete the money transfer.
</li>
<li>
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.
</li>
<li>
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.  
</li>
<li>
Easy Payment Integration
Shift4 will guide you through the integration process — hassle-free.
</li>
</ul>
&nbsp;
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>

Man making a payment on his smartphone representing the OCT payment method - Shift4

OCT Payment Within Seconds with Visa Direct

<div class="BlackBoxSection_bullet-points-blue__6CIYA">
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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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" />
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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" />
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
&nbsp;
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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<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>
</div>
</div>

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 chargeback 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.
&nbsp;
<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.
&nbsp;
<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://dev.shift4.com/resources/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.
&nbsp;
<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://dev.shift4.com/eu/features/fraud-protection" 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.
&nbsp;
<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://dev.shift4.com/resources/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.
&nbsp;
<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.
&nbsp;
<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.
&nbsp;
<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

<div class="BlackBoxSection_bullet-points-blue__6CIYA">
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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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://dev.shift4.com/resources/credit-card-decline-codes-for-merchants" 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.
</div>
</div>
<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" />
&nbsp;
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://dev.shift4.com/resources/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 <a href="https://dev.shift4.com/resources/chargebacks-in-a-nutshell-a-guide-for-merchants/">chargeback</a> fraud. You can also protect your business from unwarranted returns and dishonest customers.
&nbsp;
<h2>Merchants’ Chargeback Rights — What You Need to Know</h2>
Even though the main goal of chargebacks 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">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.
&nbsp;
<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.
&nbsp;
<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.
&nbsp;
<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.
&nbsp;
<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.
&nbsp;
<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.
&nbsp;
<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.
&nbsp;
<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.
&nbsp;
<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://dev.shift4.com/eu/features/fraud-protection">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. 
&nbsp;
<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.
&nbsp;
<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://dev.shift4.com/resources/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.
&nbsp;
<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. 
&nbsp;
<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>
&nbsp;
<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://dev.shift4.com/resources/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://dev.shift4.com/resources/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.   
&nbsp;
<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://dev.shift4.com/eu/features/fraud-protection" 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.
&nbsp;
<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.
&nbsp;
<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.
&nbsp;
<h3><b style="font-family: var(--heading--font-family); font-size: var(--heading--font-size-h3); letter-spacing: var(--heading--letter-spacing-h3); background-color: var(--global--color-background); color: var(--global--color-primary);">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.
&nbsp;
<h3><b style="font-family: var(--heading--font-family); font-size: var(--heading--font-size-h3); letter-spacing: var(--heading--letter-spacing-h3); background-color: var(--global--color-background); color: var(--global--color-primary);">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.
&nbsp;
<h3><b style="font-family: var(--heading--font-family); font-size: var(--heading--font-size-h3); letter-spacing: var(--heading--letter-spacing-h3); background-color: var(--global--color-background); color: var(--global--color-primary);">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.
&nbsp;
<h3><b style="font-family: var(--heading--font-family); font-size: var(--heading--font-size-h3); letter-spacing: var(--heading--letter-spacing-h3); background-color: var(--global--color-background); color: var(--global--color-primary);">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://dev.shift4.com/us/features/fraud-protection" 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>
&nbsp;
<h3><b style="font-family: var(--heading--font-family); font-size: var(--heading--font-size-h3); letter-spacing: var(--heading--letter-spacing-h3); background-color: var(--global--color-background); color: var(--global--color-primary);">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" />
&nbsp;
<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.
&nbsp;
<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://dev.shift4.com/resources/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://dev.shift4.com/us/features/checkout" 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 issuing bank 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.
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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" />
&nbsp;
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
<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.
</div>
</div>
</div>

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://dev.shift4.com/resources/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://dev.shift4.com/resources/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.
&nbsp;
<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., 3DS2, 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

<div class="BlackBoxSection_bullet-points-blue__6CIYA">
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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
&nbsp;
<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" />
&nbsp;
<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).
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
</div>
</div>

3D Secure 2-3DS2-online purchase with phone

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

<div class="BlackBoxSection_bullet-points-blue__6CIYA">
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.
</div>
<div class="BlackBoxSection_bullet-points-blue__6CIYA">
<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.
</div>
<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://dev.shift4.com/resources/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 issuing bank, 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://dev.shift4.com/resources/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://dev.shift4.com/eu/features/fraud-protection" 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://dev.shift4.com/resources/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://dev.shift4.com/resources/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, 3D Secure 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, authorization 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 chargebacks 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/protect-business-from-fraud" 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.

&nbsp;

<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>

&nbsp;

<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.&nbsp;



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.&nbsp;



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.&nbsp;



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>.&nbsp;



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.&nbsp;



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.&nbsp;



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" src="https://assets.shift4.com/wp-content/uploads/2022/10/payment-security-diagram-of-security-processes_Shift4-1024x576.png" alt="" class="wp-image-28897" 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>


&nbsp;



<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.&nbsp;



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.&nbsp;



<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.&nbsp;



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.&nbsp;



<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.&nbsp;



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. &nbsp;&#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>.&nbsp;



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.&nbsp;



<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;



<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>

&nbsp;

<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>
&nbsp;

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>


&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.

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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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>
&nbsp; 
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.
&nbsp;
</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.
&nbsp;
<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" />
&nbsp;
<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.
&nbsp;
<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" />
&nbsp;
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.
&nbsp;
<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
&nbsp;
&nbsp;

OCT Payment Within Seconds with Visa Direct

Experience the Future of Commerce