Three ways that a quick shift in payment acceptance improves your bottom line
In 2020, business owners of all types and sizes demonstrated ingenuity and agility as they powered through the pandemic. Most quickly pivoted to update operational practices that conformed with local business regulations and satisfied a shift in consumer behaviors and norms.
When it came to in-person interactions, two major trends became “must haves” for safely conducting business: 1) contactless payments; and 2) curbside servicing.
While businesses will experience a bit of a “back to normal” reset once the pandemic is behind us, many of the new shopping and service interactions will remain because both consumers and businesses find them convenient.
The rise of contactless and curbside
Behavioral adjustments have forever changed how we pay. According to a study from Visa1, nearly 80% of consumers worldwide changed how they pay in order to reduce contact at the point of sale.
It’s important to understand how contactless payments and curbside servicing impact your business. Let’s explore the opportunity to implement measures that maintain convenience, help control costs and improve your bottom line.
Contactless payments: Safe, convenient, and affordable
Contactless payments leverage existing EMV compatible technology—point of sale (POS) terminals, portable devices, self-serve kiosks—to securely capture and transmit card details for processing. Plus, the card brands no longer require signatures for businesses that use EMV-enabled devices to accept and authorize payments. It is also not necessary for those businesses to retain and store transaction receipts. Disabling these features results in a safe and seamless checkout process.
Contactless is good for the bottom line too. Transaction pricing does not vary based on whether payment information is captured via the swipe, insert, tap of a card, phone, or wearable device.
Bottom line: Encourage customers to pay with a contactless card or a digital wallet since it’s fast and secure, and there’s no impact to payment acceptance costs.
Buy online, pickup curbside: Increased risk and cost
According to a Shopper Study from Incisiv2, 85% percent of shoppers have significantly increased curbside pickup orders compared to pre-COVID-19 rates. Most customers buy and pay for services ahead by entering card details into a website form or through an app. While convenient for consumers, this shift to online payments has resulted in a surge in fraudulent transactions and related chargebacks.
According to a report from Forter3, there was a 55% increase in attempted fraud for orders placed online for in-store pickup in the first half of 2020 compared with the prior year.
Fraudsters use the victim’s correct billing and personal details, ask for curbside pickup, and assume the identity of said victim. There is little risk of being caught due to protocols like face masks and social distancing. Once the actual cardholder sees the fraudulent transaction on their credit card statement, they issue a dispute with their bank or issuer, which often results in a chargeback for the merchant. This often leaves the business on the hook for the cost of the product as well as any fees associated with the disputed transaction refunded to the actual cardholder.
Additionally, since the payment details captured online, over the phone, or via email are riskier, the card brands charge higher “card-not-present” (CNP) interchange rates. The costs can really add up, especially for businesses that offer high-ticket goods and services.
Bottom line: Continue to support order ahead with curbside pickup, then collect payments in person. You’ll reduce fraud, chargebacks, and the payment acceptance costs.
The solution: Lower costs with curbside pickup and pay
It is simple to continue to extend the convenience of curbside servicing to customers while making slight adjustments to your business model and how you accept payments. The result is lower transaction costs, fewer fraud-related chargebacks, and a better bottom line.
Here’s a closer look at how a Pickup and Pay solution benefits your business now and once the pandemic passes.
1. Eliminate the cost of third-party platforms
Third party ordering and/or delivery platforms helped carry many businesses through 2020. However, giving up 20%-30% of sales decreases profits and may not be sustainable—or necessary—once the pandemic subsides. Here’s how to build relationships with customers directly and eliminate the extra cost:
- Use your website and social channels to promote direct orders made via phone, online or in your app.
- Offer a "pickup at store" option
- Consider adding incentives like a free cookie or gift card for a subsequent purchase.
2. Lower the cost of payment acceptance
Use a portable Wi-Fi connected payment terminal at curbside to capture card details quickly and securely. Encourage contactless payments and disable signatures and receipts. Customers can pay with credit or debit card or opt to pay with a digital wallet such as Apple Pay or Google Pay.
Portable terminals streamline payments taken at curbside or at a pickup desk and ensure that your business qualifies for more affordable card-present rates. Since card details are securely captured in-person, business owners save money on each transaction vs. card-not-present methods.
Portable terminals vary based on your point-of-sale (POS) solution and payment acceptance method. Elavon has a wide array of products to support pickup and pay, including:
- A stand-alone device that captures and sends the transaction directly to your processor.
- A mobile card reader that interfaces with a POS or payment app on a phone or tablet.
- A terminal that interfaces with a browser-based virtual terminal, such as Elavon Converge.
- A terminal that integrates with your POS software so that payment details flow into your business management and reporting systems.
3. Reduce fraud and chargebacks
The chances that a fraudster will show up in person with a counterfeit EMV card are slim since the data contained on the card’s chip is dynamic and virtually impossible to clone. Therefore, EMV card present transactions are much more reliable and authentic than those payments entered through a website or over the phone. In addition to lower interchange rates, chargebacks due to counterfeit cards are also reduced or eliminated. This extends peace of mind, while saving you time and money.
The bottom line
Curbside pickup and pay keeps customers coming back and keeps your processing costs down. Our payment professionals can help you get started today.
For more than 25 years, Elavon has been a leader in payment processing, leveraging the world’s best technologies for our customers from large worldwide enterprises to locally owned small businesses. We extend powerful payment solutions for all payment types and processing environments, ensuring our customers are well-connect. We’re ready to do the same for you. Elavon is consistently rated among the top global payment providers, with more than one million customers.
1 - https://www.businesswire.com/news/home/20200804005389/en/Global-Visa-Study-Finds-67-Small-Businesses
2 - https://www.businesswire.com/news/home/20200924005537/en/85-of-Shoppers-Have-Increased-Curbside-Pick-Up-Since-COVID-19-79-Say-a-Contactless-Store-Pickup-is-Very-Important-to-Them
3 - https://www.digitalcommerce360.com/2020/09/30/new-customers-and-curbside-pickup-increase-ecommerce-fraud-risk/#:~:text=The%20report%20from%20Forter%2C%20another,compared%20with%20the%20prior%20year.