Unnecessary Credit Card Declines Leave Consumers Unsatisfied

May 27, 2014
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Businesses are turning to online retailing as an opportunity to reach more customers, to provide swift service, and to offer new products/services more quickly. There are many business challenges for those who wish to create a satisfactory customer experience. One of which is the need to prevent online fraud. More and more, people are using a variety of different Internet-connected devices to do their shopping. With this increase comes the responsibility of providing a fraud-free experience.

According to an article by National Transaction Corporation (NTC), “Of the 17 percent of consumers who reported having had their credit card declined during a card-not-present (CNP) transactions. As many as one-third of those declines were unnecessary.”

When consumers experience these unnecessary declines, the result is an understandable aggravation. The frustration does not stop with the consumer, however. Banks and credit card companies experience increased operational costs, and online retailers are left to deal with losses in revenue.

Unfortunately, when credit cards are declined, it has a very negative economic impact because consumers are forced to handle their transaction using a different method. In regards to a recent study, National Transaction Corporation revealed that, “34 percent of consumers try again another credit card, other use a different payment method and 24 percent will skip the purchase altogether or shop at a different online retailer.”

Businesses obviously want to grow and have a continuous relationship with customers. Consumers want an easy shopping experience. They expect their transactions to be swift and the customer service to be excellent. In light of this, the frustration and impact of wrongful declines is a real problem for both the business and the consumer. As stated by National Transaction Corporation, “No one wants to turn away business, and no one wants their business declined.”

The negative impact that declines have on consumers and businesses does not stop there. Banks, credit card companies, and merchants are also negatively affected.  When customer loyalty is lost it trickles down to lost fees and revenues. As stated by NTC, “Creating a standard for online trust that enables credit card companies, merchants and issuing banks to better recognize trusted digital consumers and reduce the number of wrongly declined consumers avoiding unnecessary losses.” Thus, unnecessary credit card decline is an issue that needs to be addressed for the benefit of all involved.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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