If you are a merchant who still isn’t selling online, then now is the time to start. And we mean right now. More and more business owners are examining the possibilities of the virtual world. And for many, selling online is even easier than in the real world.
Big money in e-commerce
The following figures illustrate the extent to which it’s now essential to trade in the virtual world. Last year in Germany people spent more than 150 billion euros in online stores. In Russia, which is not the leading country in the world in terms of e-commerce, online sales exceeded one trillion dollars in 2018. In turn, in the United States, in just one season of winter holiday sales, people spent more than 100 billion dollars in online shops. According to global analysts’ forecasts, these figures will only continue to grow.
And when it comes to online trading, you can’t get around the topic of processing. Bilderlings has already discussed this in detail on its blog, but we’ll recap the key points here. Payment processing is the process of data and information processing that happens during payment transactions between the cardholder, the issuing bank, and the cardholder’s bank. Processing centers are payment service providers, legal entities that use or coordinate bank card financial transactions. These centers can be independent structures, or they are part of a traditional bank or a large fintech company.
We are talking about services that facilitate online financial transactions. And here, perhaps the most important thing is the speed of transactions, along with protection from virtual fraudsters. When speaking about operational speed, it is necessary to factor in various indicators, for example, the peak processing load. Here the norm is 95-100 tps. Although the most advanced systems of processing electronic payments (internet acquiring) have indicators above 110 tps, and in “real time”.
For entrepreneurs who decide to connect to a processing system, it is important to understand what “payment conversion” is. The conversion is the number of successful payments out of the total number of transactions. Payment conversion needs to be analyzed, as it directly affects your business. Depending on the technological capabilities of the payment gateway, processing center, it can be brought to maximum efficiency.
It makes sense that the higher the success rate in the e-commerce system, the better for the end user. In fast (and reliable) systems, the indicator approaches 100% – though 99.98% – 99.99% is a very good indicator as well.
Many banks and fintech companies connected to a processing system use special analytical modules that collect and summarize statistical data, for example, about failures during a financial transaction – between banks and online stores.
The system is not allowed to “freeze”
It is important for an entrepreneur to understand that the “throughput capacity” – the speed of a financial transaction – directly depends on the number of transactions per second, which are processed by the payment gateway. Usually, payment for services or goods on an online merchant’s website with “Pay” button takes no more than two seconds. In case when many payments are being made simultaneously from different places and the system is overloaded, then customers are put into a virtual queue.
For the modern customer, used to getting fast results, if something “freezes” in an online merchant’s system, they go straight to a competitor’s website. Moreover, there are some even more unpleasant issues for the merchant. A customer, having entered this queue, clicks the “Pay” button once, sees no result and automatically presses it a second and third time. When the customer’s turn comes to finally carry out the operation and pay for the goods, the system processes all three requests (or even more, if the buyer clicks the Pay button ten times, say). Then the merchant has to return the overpaid money, and in the end, most likely, loses customers.
If we are talking about proven and serious processing systems, such as Bilderlings, the fintech-company helps clients in chargeback situations. If a client makes a chargeback, then any processing company should help him.
When an entrepreneur with a ready online store site is included in the processing system, it is important to find out what kind of rolling reserve (money reservation) it will have. The rolling reserve is the percentage of the amount of each transaction that is deducted from the merchant’s account by the acquiring bank, usually for 120-180 days. An alternative to such a scheme can be a security deposit, that is, a fixed amount that is held on the current account of the company of the owner of the online store and is used as a guarantee to cover chargebacks.
Scam protection – you can’t do without it
It is always necessary to take into account the security of the online financial transaction process. Security systems are on the side of a processing center. For example, the security standards of the channel for transmitting financial information – Bilderlings – are guaranteed by the certification of Visa and Mastercard – PCI DSS card systems of the highest level. The security standard of PCI DSS payment cards was developed back in 2006 (and it is still relevant!): more than 600 leading experts from the field of finance and related industries participated in the process. This standard is mandatory for all companies that store cardholder data on their side.
If we are talking about systems that protect against fraudulent transactions, the processing company, as a rule, uses several systems at once. The most reliable are, for example, 3D Secure (Verified by VISA and Mastercard Secure Code), AntiFraud. Reliable internet acquiring systems successfully combine 3-4 (or even more) security programs.
In the e-commerce system, one of the important functionalities offered by a solid processing company is ready-made modules for integration into the most popular CMSs (Content Management Systems), such as WooCommerce, PrestaShop, Opencart, Magento, Drupal, and Mozello.
In short, for the client who decides to actively develop his business, opening online stores and even trading platforms, it is important that the processing system is reliable and stable. And this means that you cannot make mistakes when you choose the company that will carry out the processing.