Every business owner aims to increase their revenue. But for many business owners who have been in business for any length of time, there is a high chance you’ve dealt with payment reversal issues which may affect your yearly revenue.
Payment reversal can be due to a lot of reasons, such as issues relating to the payment gateway used or legal regulations. The burden of payment reversals often falls on the business owners, especially when credit card providers tend to favor the consumers. This article will describe the right processes in which business processes that can reduce payment reversal claims and improve their revenue.
What does payment reversal mean?
Payment reversal happens when payment from a cardholder is returned to the cardholder’s bank during a transaction. Usually, payment reversals are initiated by the card issuer, cardholder, or even the issuing bank. There are many reasons for payment reversals, and common situations include unavailability of the desired stock, poor quality of the product forcing the customer to request a reversal or fraudulent payment.
To the customers, payment reversal might seem like a mere request for their money, but to the merchants and business owners, payment reversals can attract the wrong attention from banks and card issuers. Payment reversals generally fall into these categories:
#1: Authorization Reversal
Authorization reversal occurs before a payment goes through and usually occurs during ACH (Automated Clearing House) payments. Since ACH payments are known for being slow, pre-authorization of unconfirmed transactions is quite common. In some cases, pre-authorized transactions with wrong details can still go through, and a quick call to your bank can help prevent further problems.
The process of canceling a pre-authorized transaction by an issuing bank is called an authorization reversal. When compared to other payment reversals, the authorization reversal is customer- and merchant-friendly as there are no refunds or charges incurred.
#2: Refund reversals
Refunds happen after a successful transaction. Customers often request refunds when the product is subpar. Unlike the authorization reversal, refunds are treated like an entire transaction set whereby the acquiring bank is mandated to pay the issuing bank. When settling refunds, merchants have to lay the refunded fee alongside additional installment fees like the interchange fees.
#3: Chargeback reversals
When a customer decides to file a dispute against your transaction, such action is called a chargeback. Chargebacks are the bane of many business owners’ existence, as they lose not only their product but also their revenue and shipping fee and are required to pay extra chargeback fees. Fighting a chargeback is a more easy feat, as many merchants find it difficult to discern between a fair chargeback and a possible fraud case. Plus, they have to deal with the stress of filing claims and are at a high risk of being flagged by card issuer providers, further affecting their trust and credibility.
6 ways to reduce payment reversals
Reducing payment reversal occurrences to zero required adopting business-friendly technology solutions and following a set of business-friendly practices like the following:
Educate Your Customers on Payment Processing
Many customers are unaware of how failed transactions affect business owners. Merchants can educate their customers on how to ensure efficient payment processes via newsletters, blogs, or social media networks.
Connect your authorization request to transaction messages
Merchants should endeavor to connect payment authorizations to messages. This can be done using a Transaction Identifier (TID) that securely connects messages related to a certain transaction for easy retracing. Doing this can help reduce errors, allowing merchants to have access to sales data.
Offer High-quality Products
Most disputes and chargebacks from customers are due to unsatisfied reactions to their products. Merchants should endeavor to provide high-quality products that match their description. By including clear images and detailed inscriptions, customers can get a clear understanding of what to expect.
Schedule Recurring Payments for Loyal Customers
Business owners offering subscription-based or one-time services can employ subscription management solutions that simplify invoicing and billing. Since constantly failed payments can cause chargebacks and refunds, these solutions can help maintain customers’ trust and handle bulk billing.
Improve Your Website Checkout Experience
Improving your checkout experience can help improve your customer’s checkout experience. Following a user-centric process can help avoid complex payment processes that cause reversals. Merchants can also diversify their payment options that are compatible with all devices.
Include Cryptocurrency Payment Options On Your Website
Cryptocurrency transactions are the perfect solution for chargebacks and refunds as all transactions are irreversible and publicly recorded on the blockchain. This means there is little to no risk of incurring return fees or settling fraud-related reversals that are common with traditional payment options.
PTPShopy caters to merchants looking to prevent chargebacks. Merchants can integrate the PTPShopy API into their existing system and enjoy their payment gateway services. When compared to other cryptocurrency gateways, PTPShopy offers support for more than 400 cryptocurrencies, making it one of the biggest. PTPShopy lets small business owners make more money by charging less than 1% of transaction fees.
PTPShopy integration is free of charge and requires no payment. Furthermore, registering on the PTPShopy website only takes five minutes, and it offers a variety of financial tools to assist you in running your company. The PTPShopy website offers additional merchant tools for money management, business taxes, and invoicing.
For merchants to successfully integrate PTPShopy into their website, they do not need to have advanced technical knowledge or computer skills. If you run into any problems, you can easily contact customer support or use the comprehensive tutorial on the website for assistance.
Reduce Payment Reversals with PTPShopy
Tired of facing incessant payment reversals that are costing you profits? PTPShopy is here to help your e-commerce business reduce refunds and chargebacks. The PTPShopy payment gateway is built on an advanced technology that prevents chargebacks and refunds as all transactions are irreversible. In addition, the PTPShopy customer checkout section offers a smooth experience, reducing cart abandonment rates. Don’t let payment reversals weigh down your profit; let PTPShopy process all chargeback-free transactions today!