6 Tips on How to Save Money in your Online Shop
Running a successful e-Commerce business isn’t easy. Product flow, shipping, and marketing are just a few things that require your attention. Not to mention the management of your payments and transactions.
While the smooth functioning of your payments is vital, it’s not an area you want to spend too much time on. Payments should just run seamlessly and you shouldn’t have to spend your precious resources on managing them.
Clearhaus knows and recognises this fact. That’s why we always work hard to provide the best solutions when it comes to payments. Here are our best tips on how to save time and money on payment-related issues.
1. Protect Yourself Against Fraud
Fraud is very widespread, and online fraud, in particular, is on the rise. Fraud can end up being expensive for your business, as you will end up with the bill - unless, of course, you take the necessary precautions.
3-D Secure (also known as Verified by Visa and Mastercard SecureCode) is the ideal way to protect your online shop against fraudsters. It requires 2-factor authentication, meaning that the payer must provide both a static password or CVV-code AND a dynamic password (e-g. sent by text) or biometric identification (e.g. fingerprint or Face ID). In this way, you make sure that the payer is, in fact, the rightful owner of the payment card being used. You can read more about 3-D Secure here.
When you apply 3-D Secure to your transactions fraud levels will decrease. Fraudsters will no longer be able to use stolen cards or card information to complete a purchase in your webshop. And even if they somehow manage to do so, you won’t be liable for the transactions, since 3-D Secure involves a liability shift. As soon as you apply 3-D Secure to a transaction, you will not be liable for it - instead, the cardholder’s bank will have to pay the bill.
Clearhaus offers Conditional 3-D Secure, which enables you to set rules for which transactions should and shouldn’t require 3-D Secure. For example, you can decide that 3-D Secure is only required for transactions above a certain value or from a certain area. This will let your “low-risk” customers pay as they always do, whereas “high-risk” customers will have to go through the additional security step.
Another benefit of 3-D Secure is that it fulfills PSD2’s requirements for Strong Customer Authentication. From September 2019, 2-factor authentication will be required for most online transactions - 3-D Secure is the easiest way to comply with this rule. Read more on PSD2 in our e-book.
3-D Secure is, however, not the only way to reduce fraud. Clearhaus offers a feature called Fraud Detection. Banks mark cards that have been used in fraudulent transactions with “fraud markings”. We use these fraud markings to assign a risk score to each transaction that goes through our system. If the risk score is too high, the payment will be rejected.
With these two features enabled, the risk of fraud in your online shop will be drastically reduced. However, there are also a few things you can do yourself. Read more on that here.
2. Dodge Chargebacks
You can receive a chargeback for a lot of reasons - it’s not just related to fraud. Two frequent reasons for chargebacks are 1) the customer doesn’t recognise the transaction and 2) the purchase was not as expected. Fortunately, there’s an easy solution to both.
The first issue relates to the descriptor you have chosen. A descriptor is the text and/or numbers that identify your transaction in your customer’s bank account. The purpose of the descriptor is to make it easy for your customers to connect a withdrawal with a purchase. Therefore, we always recommend using informative descriptors - preferably the name of your online shop. You can also add order number, customer number, or something similar to help your customers identify the transactions on their bank statement.
Clearhaus offers dynamic descriptors, which enable you to set different descriptors for each of your online shops (if you have more than one). In that way, you don’t leave your customers confused, and you reduce the risk of a chargeback.
The second issue typically relates to lack of information - either in terms of the product/service, the terms, or delivery. That’s why it’s extremely important that you provide clear, complete, and truthful information in your webshop. Our best tips are realistic pictures of your products, thorough descriptions of products/services, and clear and visible terms for payment, delivery, returns, and everything else your customers may find relevant. For example, if you have a subscription-based model, it is crucial that customers are aware that they sign up for a subscription and not just a single product.
3. Reduce Manual Work
A chargeback involves a lot of manual work. If you choose to refute a chargeback you are in charge of providing all the relevant information to support your refute. There can be a lot of back and forth between you and your acquirer, and there’s often a lot of documentation to keep track off. It requires time, resources, and a lot of focus.
We have reduced the workload with our API, which automates the chargeback process. In one single place, you will find all the information you need about your chargebacks. Each morning you will be able to see new chargebacks in the API (if you have any, of course). You can then choose to accept or refute them. If you refute a chargeback, you just upload all the relevant documentation in the API. You can always track the status and see what documents and comments you or Clearhaus have added for each of your chargebacks.
It’s less work for you and it gives you a much more complete and easy overview of each of your chargebacks - which in turn increases the chances of you winning them.
4. Eliminate Human Errors
It’s hard to avoid mistakes when doing large amounts of manual work. Especially when it comes to accounting. When a lot of numbers have to be moved from one system to another, it’s easy to accidentally hit the wrong key, enter the amount in the wrong field, or forget a decimal. Not to mention how time-consuming this process can be.
With technology, like the one offered by Clearhaus’ API, you can automate your account reconciliation. Our API will automatically retrieve your settlement and transaction data and transfer it to your accounting system. With just a few clicks your data will successfully be transferred.
This procedure is not only less prone to errors, but it also enables you to import data more often. As a result, you can get a more up-to-date overview of your financial situation.
5. Retain Recurring Payments
If you have a subscription- or membership-based business model, automated recurring payments will most likely improve your turnover. You’re probably familiar with this issue: when customers have to make a separate payment each week or each month, they’re likely to forget about the payment. It’s not that they no longer want to receive your products or services, they simply forget that a subscription or recurring payment is due. Either they never pay or they pay too late, and you will already have removed them from your system.
In collaboration with your payment gateway, Clearhaus enables you to automate recurring transactions. You can let your system automatically withdraw money from your subscribers each week or month. It makes life easier for your customers, but it also helps you retain subscribers/members. As a bonus, you will also save time on sending out invoices each time customers make a payment.
6. Avoid Exchange Fees
We can’t help you avoid exchange fees altogether, but we can definitely help you reduce them.
If you receive payments and have expenditures in a particular currency, you will benefit from having your account settled in that currency - simply because you won’t have to convert the money you receive from us into the currency you need to pay your bills in.
If you receive payments in several currencies, but only have expenses in one currency, you should only have your account settled in the currency of your expenses. That’s because we often offer you a better exchange rate than your bank does. Paying us to exchange your earnings is, therefore, cheaper than having the bank do it.
As you can see, there are heaps of ways in which you can save time and money when it comes to payments. Your resources are better spent focusing on growing your business.
If you have any questions about any of the services take a look at our features pages for more information. You are also welcome to contact us with any questions you may have.