Payment Processing Best Practices

Accepting credit card payments has become a normal part of business operations for companies large and small worldwide. 

But not every business processes payments in an optimal way—which can lead to higher processing fees, compliance issues, and poor experience for your customers. 

Based on our experience, we compiled the 15 most important pro tips and best practices to keep in mind when it comes to payment processing. These recommendations will help you save money and set your company up for growth.

1. Prioritize Security

High security standards can’t be overstated when it comes to sensitive payments data. With credit card fraud attempts rising 46% year-over-year, your customers are depending on you to keep their information safe. 

In addition to your moral responsibilities to your customers, card networks and payment processors will penalize you if your security standards fall short. You could be hit with additional PCI compliance fees for failing to maintain recommendations set forth by the Payment Card Industry Data Security Standard. 

2. Offer a Wide Range of Payment Methods

Give your customers as many different payment options as possible. 

We get it. Certain types of credit cards and payment options are more expensive than others. That’s why so many businesses don’t like accepting American Express—and some aren’t even set up to accept it.

But trying to save a fraction of a percentage on processing can end up backfiring. First, it can turn customers away if you don’t accept their preferred payment option. Second, you could lose the right to accept certain cards if you’re encouraging customers to use another brand. 

Set yourself up to accept mobile payments and virtual wallets like Apple Pay, Google Pay, Venmo, and other alternatives. 

3. Use Fraud Prevention Tactics

If a fraudster makes an unauthorized purchase at your business, it’s going to cost you money and potentially damage your reputation. The victim will simply file a chargeback with their credit card—forcibly reversing the funds from your account.

This means you won’t get paid for the transaction, and you’ll also lose whatever goods or services were rendered to the fraudster. 

Simple fraud prevention tactics like using an address verification system on your website or chip payments at in-person terminals will help you avoid headaches, penalties, and lost money. 

4. Monitor Your Transactions and Statements

Are you taking the time each month to monitor your credit card processing statements?

If not, I can almost guarantee that you’re overpaying.

That’s because processors are notorious for burying hidden fees and inflating their markups. You could have close to a dozen fees that you’re paying every month that could easily be removed if you’re paying attention. 

Tracking your statements also helps you better understand the total costs of accepting card payments. So if there’s a sudden increase, you’ll be able to address it ASAP. 

5. Keep Your Hardware and Software Up to Date

There are two main reasons why you need to be using updated hardware and software to process card payments.

First, you’re more vulnerable to security breaches if your systems are outdated. Technology is constantly changing, and you’ll need the latest security patches to ensure your systems are hardened against new vulnerabilities and scams. 

Second, dated hardware and software slow down the payment process—which can frustrate customers. Whether it’s in-person or online, you want people to be able to pay with as little friction as possible.

6. Publish Clear Return and Chargeback Policies

Make sure your return policies are clearly posted on your website and storefronts. 

If the customer is unclear about what can be returned and the time window that’s allowed, they may end up just filing a chargeback with their bank—and win. 

But if you can prove that your customer agreed to certain terms, there’s a chance you’ll be able to fight against those chargebacks without losing money. 

7. Ensure Your Business Name and Purchase Descriptions Are Easily Recognizable

Your business name should be what’s appearing on a customer’s credit card statement. Otherwise, customers may not recognize the charge and could end up filing a chargeback for something they think is fraudulent.

For example, let’s say you’re running a coffee shop called Carl’s Coffee Café. But your legal business name is CCC Holdings LLC. 

This isn’t something that most of your customers will recognize, and it increases the chances of them fighting charges that are actually legitimate. 

8. Make Sure It’s Easy For Customers to Contact You

Customers should be able to reach you with ease. Here’s why.

Let’s say there’s a problem with a product, service, subscription, or anything that the customer purchased from your business. If they want to contact you for a resolution but can’t find your phone number or email address—they can go straight to their credit card company and ask for a refund. 

This initiates a chargeback. Not only is this costly for your business, but too many chargebacks could revoke your ability to accept credit cards. 

All of this can be easily avoided by making it easy for customers to reach you. Then you can resolve things directly with them instead of getting the banks involved. 

9. Understand the “Liability Shift” For Different Payments

Every business that accepts credit cards needs to know the basics of EMV compliance. This protects businesses against costs associated with credit card fraud. 

In simple terms, EMV compliance dictates who pays for credit card fraud—and the answer boils down to a single word, liability. 

With the EMV liability shift, any fraudulent payment dispute must be paid by the party that was least compliant. 

For example, let’s say you swipe an EMV-enabled chip card that’s set up for tap payments. Since the tap payments are more secure, then you’d be liable for that transaction if it was fraudulent or disputed. But if you tapped the chip-enabled card, then the card issuer would be responsible because the liability shifts to them. 

Simply put, if the card is chip-enabled, then always tap it. Avoid manually-keyed transactions, as these are the least secure. 

10. Train Your Staff

As a business owner, you may be aware of certain aspects of credit card processing. But that’s useless if you’re not the one that’s actually dealing with customers and accepting payments on a day-to-day basis. 

For example, let’s look back at our previous scenario related to the EMV liability shift. 

If your staff isn’t properly trained, they might manually key in card numbers or tell customers to swipe their cards instead of tapping them—without realizing they’re putting you at risk. 

11. Negotiate Your Rates

I’m going to share a secret with you—credit card processing rates are negotiable.

That’s right. Whatever you’re paying to accept credit and debit cards can be negotiated directly with your processor. 

Most businesses don’t realize this, and they just take the fees at face value, assuming that they have to be paid. After all, these funds are taken from your merchant account automatically before you ever have a chance to get your hands on them. 

The only part that’s not negotiable is the interchange rates and assessments imposed by the credit card networks. But the extra fees charged by your merchant services provider are completely up for debate. 

12. Stay Informed On Industry Trends

It’s important to know what’s going on in the payments world, as you may need to adjust what you’re doing to stay compliant, save money, or keep pace with customer habits.

For example, things like BNPL (buy now, pay later) and digital wallets have really been trending upward in recent years. 

You can always subscribe to our newsletter to get the latest insights delivered straight to your inbox every month. 

13. Make Sure You Follow State and Local Surcharging Laws

With credit card processing costs on the rise, many businesses are adopting surcharging policies in an attempt to pass those fees along to their customers. 

However, surcharging is not legal in every state—and there are certain caps, regulations, and stipulations that must be followed even in states that allow surcharging. 

Check out our complete guide to surcharging for more information. You should also check your local state’s laws before implementing these policies. These change on a regular basis with new acts and statutes put in place. 

14. Always Provide Your Customers With Receipts and Confirm All Deliveries

This is especially important for ecommerce businesses. If you can’t prove that an order was made and delivered, the customer can just file a chargeback and get their money back.

While it’s nice to hope that most people are honest and won’t take advantage of the system, there are still plenty of bad actors out there who will look for loopholes to get free goods and services.

So protect yourself by taking extra steps to provide receipts, delivery confirmations, and keep a detailed history for your records. 

15. Consult With a Payments Expert

A payments expert can review your statements and quickly tell if you’re overpaying for credit card processing. Without that expert guidance, you may not know what to look for and what to say to your processor.

Sure, you can pick up the phone and ask for a reduction. But they’ll likely respond with something along the lines of “You’re already getting the lowest possible rate.” 

Since you have nothing else to go by, you’re forced to take their word for it. But here at MCC, we negotiate with processors on behalf of our clients every day. This means we have real numbers and other statements to present as proof that they can lower your rates. 

We can also identify hidden fees that can be removed and spot contract violations that would entitle you to a refund of overpayments in the past. Check out our case studies to see our stories of businesses that we saved upwards of $250,000 and even $350,000 in a single year. 

Get a free audit and analysis to find out how much you can save today.