Guide to Getting the Most Out of Your Merchant Processor

Make Contact

Ensure you have assigned one company employee to manage your ongoing relationship with your processor. This "relationship manager" (RM) will be the recipient of the stream of information that comes from your processor about chargebacks, new services and capabilities, and changes in Visa and MasterCard association regulations that may be relevant to your payment and business practices. Your RM must keep an eye on metrics associated with good payment management health and should be able to understand the implications of this information on your business. Establish connections between your RM and your processor. Ask the merchant processor sales representative to introduce your RM via phone or email to someone on the processor's "risk management" or "chargeback" team.

I recommend: Your RM begin familiarizing themselves with Visa and MasterCard merchant rules.

Ask Questions

Once contact is established, ask questions. The payment industry is complicated, ever-evolving, with its own language. If you don't know what a particular industry buzzword means, take the time to ask your processor to explain the concept to you and determine the implications, if any, on the payment requirements of your business. Ask for a description of your processor's available online web tools. Get access to the tools, get trained on the tools, and use them. Some of the more sophisticated processors have powerful tools to allow you to track key payment management metrics, monitor transactions, and receive chargebacks. Some processors even allow you to dispute chargebacks online.

I recommend: Subscribe to all relevant processor email lists, alerts, and newsletters  to help you keep on top of changes to the payment industry that could affect your business. Also subscribe to  Payments News, Digital Transactions, and Card Forum free newsletters. Take the time to glance through them.  Establish an ongoing dialog with the account manager assigned to your company. Make time to talk with this person every couple of months, even if it's only to ask, "What's new?" and "Is there anything I should be aware of?" Often processors have materials - about dealing with chargebacks or ever-changing Visa and MasterCard, regulations, for example - and only distribute them to merchants who ask.  

Manage Chargebacks and Retrieval Requests

Find out who can answer your questions about any chargebacks you receive. Get a direct phone number for this contact person and a FAX number to send your chargeback disputes. Make sure you receive chargebacks in the way that best meets your needs. Some processors send your chargebacks via post mail, others FAX the chargebacks to you, and some have an online option for viewing chargebacks. Ask your processor for your options and choose the quickest, most reliable method. Retrieval requests (also referred to as "ticket requests") are initial inquiries by a cardholder on a specific charge listed on a credit card statement. Think of them as "pre-chargebacks." If retrieval requests are handled properly, chargebacks can be avoided, saving you time and money. If they are not handled properly, they will turn into unwinnable chargebacks. Is your processor passing along your retrieval requests? If not, ask your processor what they are doing with your retrieval requests.

I recommend: Check your statement against the chargebacks you receive to ensure that you are receiving all your chargebacks. It is surprising how often I hear merchants say they see a discrepancy between the number of chargebacks they receive and the number of chargebacks that appear on their statement. If some chargebacks are not making their way to you, then take the time to work with your processor to understand why this is happening and resolve the issue. Ultimately, it's your responsibility to account for receipt of all your chargebacks. If you do not understand how to manage your chargebacks, once they are all accounted for, then read up on disputing chargbacks and the chargeback cycle.

Track Key Management Metrics

Look at your monthly statement and track key payment management metrics. Be vigilant, looking for any sudden statement changes or anomalies and understand why they occurred. Know your fees - particularly around chargebacks - which are always more expensive to your business than you realize. When you receive a chargeback, not only do you lose the revenue associated with the transaction in question, you are also charged a non-refundable processing fee for receiving that chargeback. Know how much that fee is plus whether or not there is a fee for disputing the chargeback.

I recommend: If managing chargebacks using internal resources is causing aggravation and taking more time than your organization can afford, then consider outsourcing your chargeback management to Vindicia.

Periodically Shop for a New Processor

The payment industry is highly competitive and continually changing and improving. At least once a year, shop around for better rates and services from competitive processors.

I recommend: I've seen merchants save tens of thousands of dollars in processing fees and receive better support,services, and tools by switching processors.  Chase Paymentech Solutions, First Data Corporation, Merchant e-Solutions, and Wells Fargo Merchant Services are all reputable merchant processors.

Network with Peers

Managing your payment infrastructure and keeping track of industry trends can be daunting, but you are not alone! Your peers have formed industry groups to ensure best practice sharing.

I recommend: Going to payment conferences hosted by Direct Response Forum and/or Merchant Risk Council .