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How to prevent chargebacks

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Knowing what a chargeback is and understanding how it works can be confusing, but it doesn’t have to be. We’re here to break down chargebacks and provide you with solutions to avoid them.

 

What is a chargeback?

A chargeback, or a payment dispute, is a transaction reversal that occurs when a cardholder disputes authorising a payment or deems a transaction fraudulent. An investigation will then be actioned, and if you, as the merchant, cannot prove the cardholder authorised the transaction, the bank will withdraw the funds from your account and deposit them back into the cardholder’s account.

 

What causes a chargeback?

Unfortunately, there can be a variety of reasons that may cause a chargeback. Here are just some of the possible causes for issuing a chargeback:

 

  • No authorisation
  • Duplicate payment
  • Incorrect transaction amount
  • Incorrect currency code
  • Merchant fraud
  • Late presentment
  • Processing or authorisation errors

 

What are the impacts of chargebacks on merchants?

When a chargeback is initiated and the transaction is withdrawn from your account, there can be several impacts on you and your business. These are just some examples: 

 

  • Loss of income, even if you’ve already provided the goods or services
  • You may be liable for chargeback fees, which in some cases can equal up to two and a half times the original transaction amount
  • Chargeback to transaction ratios exceeded, which can result in lengthy mitigation programs
  • In extreme cases, loss of your accounts due to too many chargebacks

 

How can you avoid chargebacks?

To avoid paying excessive fees on top of the loss of the transaction income, you should look for ways to prevent chargebacks in the first place. 

In many cases, the best and easiest way to avoid chargebacks is to ensure that you follow the proper transaction procedures. Latpay provides merchant payment solutions tailored to specific business needs with dedicated ongoing support, chargeback management and analysis, fraud retina and a shared approach to help manage risk.

With industry knowledge and an excellent merchant payment system on your side, you can avoid the issue of chargebacks before they become a problem for your business.

If you’re a merchant looking for a reliable and safe payment system, get in touch today. Our team of experts would love to help you find the best solution for your needs.

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Credit Card Fraud in Australia

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As technology continues to improve, fraudsters have become more creative in the way they target individuals and businesses. In 2019, Australians lost over $634 million to scammers (ACCC, 2019). This number is up 30% on 2018 figures.

Rather than the traditional methods of asking someone to provide their sensitive information, fraudsters now have improved technology and carefully curated techniques that help them commit fraud with minimal risk of detection.

 

Fraud Techniques

As we move closer towards a cashless society, credit card fraud is becoming more prevalent and there are a number of methods fraudsters can use to steal another person’s funds.

Fraudsters used advanced techniques and one of the most effective and efficient means of credit card fraud is card testing. Card testing involves physically stealing a number of credit cards, purchasing credit cards from the dark web, randomly generating credit card numbers or using phishing or spyware techniques to obtain a card’s numbers. The core purpose of testing is not the purchase of an item but to verify the card details are valid and if the transaction was approved.

Fraudsters have now also created a means to commit illegal activity on a much greater scale, in the form of botnets. Botnets are a network of internet-connected devices that can validate a huge number of credit cards at an alarming rate. Botnets submit a large number of transactions to test the viability of stolen credit card details. Many popular shopping carts are being targeted by botnet attacks and one of the most effective means of prevention is velocity checking.

When a valid credit card is detected, it is common for fraudsters to use the credit card details to make small purchases on a merchant’s site. If a small purchase is successful, fraudsters can then proceed to make much larger purchases, a series of micro-purchases or sell the valid card on the dark web.

 

Challenges for Merchants

Fraudulent purchases are often made on small to medium businesses that don’t have the technology in place to detect or prevent it. Unfortunately for targeted merchants, this means they will likely suffer some challenges when fraudulent purchases prevail.

Chargebacks occur when the original cardholder has recognised fraudulent activity on their account with an unrecognised transaction made to you as the targeted merchant. When a dispute is made by the original cardholder or their bank, and you do not have proper proof that a legitimate sale was made using a PIN or signature, you may be liable to pay back the accepted funds and lose the value of the sale and incur a chargeback fee.

Each successful transaction, no matter how small, will count against the merchant’s chargeback ratio once it’s disputed – and crossing over the excessive chargeback threshold can be extremely costly for merchants. 

This is particularly important for eCommerce and online services, where a physical card is not present. In fact, ‘Card not present’ fraud represents more than 80% of all fraud on Australian cards. When a dispute arises, it is very difficult for an online merchant to prove a legitimate purchase was made. Therefore, it is critical that online merchants have technology in place to detect and prevent fraudulent transactions.

 

Opportunities for Merchants

To avoid liability for fraudulent transactions, merchants must be vigilant in their online payment processes. Some best practices to implement include Firewalls, CAPTCHA, Time out of user session and data validation of guest checkouts. Additionally, one of the best ways to avoid being out of pocket for fraudulent transactions is to partner with a verified payment processor.

Latpay’s fraud management service assists merchants to prevent chargebacks and stop fraud in its tracks. With advanced technology, Latpay can actively set a threshold for individual merchants to detect when unusual activity occurs on their site.

In applying the velocity and value threshold, Latpay reviews the past performance of the merchant to work out transactional averages. Latpays innovative technology has helped assist merchants who have been the victims of botnet attacks to significantly minimise losses.

If you’re a merchant, whether offline or online, it pays to be protected. Learn more about Latpay’s fraud management and get in touch with our team of experts to find out more.

Getting paid with payment links

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What is a payment link?

Payment links (or PLINKS) allow you to send payable invoices straight to your customers mobile, social media account, email and other comms applications. With the ability to accept credit cards and debit cards, online banking and digital wallets through the simple click of a link, your customers will be thanking you at every bill with on-time payments deposited directly into your bank account.

Why use payment links for your business?

PLINKs are an incredibly versatile yet streamlined payment method that allows you to improve cash flow by collecting payments 24 hours a day, 7 days a week.  As well as processing transactions and accepting online payments, PLINKs have the following advantages for your business:

Get paid on time

Sending SMS PLINKs to your customers is an easy and efficient way to get paid on time, every time. All your customer needs to do is view their invoice and simply click a link to pay. No getting lost in the inbox, just a straightforward, simple process that gets you paid sooner.

Take payments from more people

Asking your customers to log in to an application or online portal to pay your invoice can be a hassle, often resulting in late or missed payments. Using latpay’s simple PLINKs, you can offer a better system that everyone can access with the tap of a button – easy!

Offer better security

As well as being an easier way to pay, our PLINKs come with world-class security backed by the highest-level PCI DSS compliance (Level 1)  as well as our revered tokenization process to ensure that all your customers’ data remains in the right hands.

Get access to a personalised dashboard

Partnering with latpay, your business will gain access to a comprehensive dashboard that allows you to create and share personalised links with your customers. With complete clarity and control of your invoices, you’ll also be able to better manage your finances and know exactly when and where the money’s coming in.

The biggest advantages of using payment links

  • Send invoices immediately via simple links
  • Receive transaction management via SMS & email notifications
  • Accept all payment types & currencies from around the world
  • Maintain PCI DSS Level 1 Compliance
  • Customise your checkout to match your business branding
  • Protect your customers with real-time fraud management

Who are payment links ideal for?

While PLINKs are fantastic for just about any business, they’re particularly beneficial for businesses looking to step into the future of digital payments without completely reinventing the wheel. Some of the businesses that benefit the most from incorporating PLINKs include:

  • Clubs, associations and organisations
  • Gyms and sports centres
  • Businesses requiring joining fees
  • Monthly subscriptions
  • Phone & utility providers
  • And heaps more!

Why partner with latpay?

Offering a truly complete and integrated payment platform, Latpay can help you discover the real value of innovative technology for everyday business. As a leading Payment and Merchant Service Provider in the UK, Australia and Canada, we deliver superior transactional, fraud management and data tokenization services to businesses all around the world.

If you’re ready to take your invoicing capabilities to the next level, chat with us today!

The risks of cyber security & why you should care

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Online crime and cyber-attacks in Australia

The Australian landscape for cybercrime is rapidly growing, with many businesses falling victim to the advances of online criminals every day. And while we often read about large-scale corporate data breaches in the media, medium and small businesses are actually more likely to become a target due to their often-minimalistic approach to cyber security.

To help you as a business owner understand why you should be concerned with cybersecurity, we’ve put together a brief guide as to what could be targeted and how. More importantly, we’ve also included some good examples of how you can protect yourself. Take a read below!

What could be at risk?

While you might think that your business information wouldn’t be of interest to a cybercriminal, the reality is that just about any piece of data or sensitive information can be a target. If you acquire, retain or produce any of the following information, it’s important that your business is taking the relevant precautions to protect itself against unauthorised access:

  • Financial records and data
  • Client records and data
  • Product design or business ideas
  • Business models
  • Intellectual property (IP)
  • Patents (current or pending)
  • Employee information

While all information can be a potential target for cybercrime, financial data is likely the biggest drawcard for criminals. For this reason, online businesses, in particular, can become vulnerable to additional risk if they are not adequately protected.

 How can cyber criminals access your information?

While the ways in which cybercriminals gain access to your information evolves every day, there are a number of traditional and well-known attacks to be aware of. Some of these include:

  • Breach of your website, payment processes or mobile app
  • Viruses and malware that can infect your computers or networks
  • Theft or remote access of your hardware and devices
  • Social engineering and phishing 

How can you protect yourself?

While it’s near impossible to ever be fully protected against online criminal activity, there are strategies and technologies that can be deployed to mitigate vulnerabilities and risks. This, paired with an understanding and awareness of the way hackers might attempt to breach your data, is the best way to approach cybersecurity.

Some of the simplest ways you can protect your information include:

  • Updating your website, Point-of-Sale (POS) systems and other devices with the latest software releases
  • Develop terms and conditions or procedures for staff to follow in regard to online security and the security of all company devices
  • Develop an incident response plan to ensure you’re prepared to react should a cyber breach occur
  • Implement network security, email protection and anti-virus software (with the help of a cybersecurity or managed IT company if possible)
  • If you run an online business, aim to satisfy PCI DSS Level 1 compliance requirements

Protecting your customer’s payment details with a secure payment platform

 If your selling products or services online, the way you take payment is critical to the safety of your customers’ payment information. Moreover, financial institutions will also require that you meet certain compliance targets to ensure the safety of their customers and yours.

At Latpay, we help our clients to take payments online through the implementation of secure hosted payment pages. Offering PCI DSS Level 1 compliance, every transaction is secured and fully encrypted to the highest standards to ensure your customer’s information remains untouched.

To learn more about the comprehensive benefits of Latpay’s merchant services, click here or get in touch with our customer service team to chat with a local representative today.

What is a payment gateway and why do I need one?

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Are you ready to grow your business online? Payment gateways are an essential step to maximising your online revenue and reaching more customers. For those who might need a little refresher on what they are and how they work, take a read of the following article outlining some key points and benefits of a payment gateway to online businesses.

What is a payment gateway?

A payment gateway or third-party service creates a connection between your ecommerce platform and your bank in order to take payments from customers online. Payment gateway software securely authorises credit card payments through the deployment of encryption, allowing sensitive information to be passed from customer to merchant to bank and back. As a security standard, businesses must have a payment gateway or third-party service in order to accept payments online.

How does it work?

The payment gateway sends credit card and other private data between parties in a secure manner to ensure all information is protected while a transaction is being processed. To complete this process, the payment gateway completes a range of tasks within about 3 seconds. To demonstrate the process in action, let’s take a look at how it all plays out.

  • Becky has decided to buy a shirt through an online store. Once she’s happy with her choice, she adds the item to a shopping cart and heads to the checkout page.
  • The website will open a secure payment page where she enters her credit card details to place the order.
  • The payment details are transferred securely from the payment page to the payment gateway.
  • The payment gateway will encrypt her credit card information and pass it on to the merchant’s bank to be authorised.
  • The merchant’s bank will decide whether or not the transaction should be approved based on a number of factors (whether Becky has gone over her credit limit, whether the card is legitimate, etc) and passes this information back to the payment gateway.
  • If the transaction is approved, the payment gateway will notify the merchant and the customer that payment has been accepted.
  • If the transaction is denied, a message will appear on Becky’s screen notifying her that the payment was declined, and the transaction has been disregarded.

The benefits of a payment gateway to your business:

Although there are a number of alternative methods available for taking payments online, having a payment gateway provides a range of unique benefits to ecommerce businesses. Some of these key benefits include:

Secure payment processing

Data security should be the number one priority for any business. Payment gateways offer the ability to take protected payments via industry-standard encryption technology. With a reputable payment gateway, customers need not worry about their credit card or personal information being intercepted and used without authority. Payment gateways protect both merchant and customer against identity fraud. 

Accept payments instantaneously

With a process taking less than 3 seconds, payments can be accepted online in real time. This means that customers don’t need to wait when purchasing their goods and merchants don’t need to wait for payments to be received.

Enable international purchases

With the ability to process transactions in multiple currencies, payment gateways allow you to access a global network of online shoppers. The ability to accept any currency means you can expand your potential target audience and create a worldwide network of customers.

Complete transactions around the clock

With a payment gateway connected to your ecommerce store, you’re always open for business. Consumers can access your store and complete a transaction at any time of the day meaning you can make money even while you sleep or travel.

Keep web users on your page

dPayment gateways enable you to take payment from your customer without directing them to a third-party page; the last thing you want to be doing is guiding traffic away from your website. Having a payment gateway allows you to keep your customers right where you want them – on your web page.

Latpay’s Merchant Facilities

Activating a merchant account can be challenging and sometimes even a little stressful. At Latpay, we make the process straight forward and simple to get your business up and running as soon as possible. With long-standing partnerships with a range of acquiring banks who know and trust our platforms, we’re already known for meeting a range of challenges and volume requirements. We also maintain the highest accreditation for industry data security as a PCI Level 1 Service Provider, meaning banks and customers alike are comfortable and confident in doing business through our gateways.

Latpay services have a strong focus on security, reliability, user experience and customer service driven by our Australian-based headquarters and support centre. If you’re ready to start taking more payments online, get in touch with our team on 07 5515 0402 or learn more about our merchant solutions here.