Q:
What's the safest way for me to accept payment from my
customers?
A:
Identifying which payment methods are best for you depends on the
type of company you run and how you conduct business. Anti-fraud
technology and encryption techniques are continually improving in
the transaction-processing industry. And secure, affordable payment
solutions exist to meet almost every merchant's needs.
Retail Businesses
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If you run a retail establishment, your business can benefit
from a variety of noncash payment options. Credit and charge cards,
for example, offer a secure, convenient way for you to receive
payment from your customers. Debit cards provide another option
that can help you boost sales while reducing risk. And check
conversion services make accepting checks both safe and easy.
Credit card acceptance is especially advantageous in retail
settings, because you conduct business face-to-face with your
customers. By following a few simple precautions--such as asking
your customers for identification or checking for the security
features on every card--you can greatly reduce the occurrence of
fraudulent transactions.
Debit card payments are even more secure because they require
your customers to enter their personal identification numbers
(PINs) at the point of sale--a safety measure that virtually
eliminates your exposure to fraud or chargebacks. What's more,
customers can only make debit card purchases if they have
sufficient funds in their accounts, assuring you'll receive
payment on authorized transactions.
Another popular payment option for security-conscious retailers
is check conversion, which transforms paper checks into electronic
transactions (or e-checks) that are securely processed in real
time. One of the leading providers of this payment method today is
TeleCheck, which offers the Electronic Check Acceptance (ECA)
Service.
The benefits to you of accepting e-checks are numerous. For one
thing, all converted checks are verified, usually at no extra
charge. Better yet, if you use a check guarantee program in
conjunction with your e-check service, you will always receive
funds from approved transactions, because returned checks are the
responsibility of your check service provider. Plus, funds from
authorized payments are deposited automatically into your account,
usually within two business days.
Restaurants
Credit cards, debit cards and e-checks can also benefit
full-service restaurants, as well as fast-food eateries. Not only
do these payment methods provide security by reducing the amount of
cash exchanged at the counter, but they can also help you boost
traffic, capture impulse purchases and increase your business's
average ticket amount.
Both full-service restaurants and fast-food establishments can
enjoy the above advantages, as well as the ability to build
customer loyalty. And this, in turn, can help you improve your
restaurant's bottom line.
E-Tailers
It's no mystery why credit cards are the most widely
accepted form of payment on the Web--they are secure, fast and
convenient. But in addition to credit cards, online merchants can
offer their customers the option to pay with money orders or
electronic transfers from their checking accounts. Both options are
now available to buyers via the Internet.
Contrary to reports of rising fraud rates, credit card payments
remain one of the safest payment methods available online.
Sophisticated Internet solutions, such as the LinkPoint Secure
Payment Gateway, process credit card payments in real time using
Secure Sockets Layer (SSL) technology, which encrypts all
confidential information during the transmission and authorization
of transactions.
Other fraud-prevention tools, such as the Address Verification
Service (AVS), make online credit card acceptance even safer. The
service compares the numerical information in your customers'
addresses with records stored by card-issuing banks. It then
returns codes that indicate whether the numbers match. Although the
information provided by the AVS does not affect the authorization
of your transactions, it can help you make informed decisions about
suspicious orders.
Besides the AVS, you can protect yourself by using the card
validation code 2 (CVC2) and the card verification value (CVV2)
verification systems of MasterCard and Visa, respectively. These
verification services use the three-digit codes printed on all
MasterCard and Visa cards to help you determine whether your
customers possess legitimate cards.
For customers who don't have credit cards, money orders are
a great payment alternative, particularly if you sell your products
in an online auction environment, such as eBay. Services like
BidPay.com allow your customers to purchase Western Union-branded
money orders with their credit, debit or charge cards. BidPay.com
then sends the money orders to you, along with e-mail notification
that your customers' payments are on the way.
Services that transfer checking account funds electronically are
another quick and easy option for customers without credit cards.
Western Union's MoneyZap service, for example, lets buyers pay
merchants online from their existing checking accounts.
All three payment options can help you turn browsers into
buyers. Equally important, the speed and convenience of these
services enable you to ship merchandise quickly, which helps ensure
customer satisfaction.
Other Businesses
If you operate a mail-order or telephone-order business, credit
cards let you receive payments quickly and safely. And again, by
using such security tools as the AVS and the CVC2 and CVV2 systems
described above, you can effectively safeguard your business
against fraud.
Mobile merchants--such as taxi drivers, plumbers and delivery
people--can process secure credit and debit card transactions
almost everywhere they go using wireless payment equipment or
software. If your work requires you to accept payments while
you're on the road, credit and debit cards offer a safe
alternative to checks and they allow you to carry less cash.
No matter how you conduct business, there has never been a
better time to offer noncash payments options to your customers.
Service-conscious consumers expect security, speed and convenience.
And thanks to today's innovative payment solutions, you can
affordably deliver the level of service your customers expect
without compromising the safety of your business.
To identify which payment options best suit your business,
contact a leading merchant service provider with experience that
offers a wide range of payment solutions.
Cardservice International Senior Vice President of
Sales John Burtzloff is in charge of sales strategy and
execution and thus is responsible for managing all aspects of the
company's marketing, communications, telesales, check
guarantee, new accounts and sales support activities.
The opinions expressed in this column are those
of the author, not of Entrepreneur.com. All answers are intended to
be general in nature, without regard to specific geographical areas
or circumstances, and should only be relied upon after consulting
an appropriate expert, such as an attorney or
accountant.