Obstacles to Retail Payment Processing

The biggest problem in business is the payment process, which in Europe presents difficulties for customers

FREMONT, CA: Though processing payments can be a challenging task, they are critical to a retailer's success. Seasoned merchants have been acclimated to the demands of the finance industry, which are highly dynamic.

Bank Identification Numbers Getting Longer

The first six digits of a card number, known as the bank identification number, are used to identify the financial institution that issued it. Well, there are going to be a lot of changes: ISO/IEC 7812-1, Identification Cards-Identification of Issuers-Part 1, is a requirement for Mastercard and Visa. Starting on April 1, 2022, the BINs will have an eight-digit length according to the numbering system. The previous BINs with six digits will still work.

It might not seem important at first, but some businesses involved in payment processing need to be aware of the changes, especially if they control transaction routing or make use of third-party providers' services. After all, BIN frequently takes part in processes including transaction processing, fraud detection, chargebacks, reporting, and other merchant services.

Preparing for the Changes

A business must contact an acquirer or a provider of payment services. They must ascertain their readiness for the new standard's implementation. Additionally, if they have the equipment required to support both BINs with six and eight digits.

Rising Fraud Risks

For retailers, the problem of fraud is constantly growing. This is especially evident in light of the increase in e-commerce activity brought on by lockdowns. Online purchasing increased, and scammers soon followed. In 2022, the pattern hasn't changed,  Scammers take advantage of people in precarious situations brought on by the pandemic to conduct fraudulent transactions. Additionally, during uncertain times, customers themselves may request chargebacks and cancel purchases.

What Can Businesses Do?

As long as the issue is current, acquirers and fintech develop new methods to reduce risks and fraud. To learn what anti-fraud/chargeback solutions, financial institutions provide, get connected with them. Certain customers can receive automatic refunds, which discourages chargeback requests from them. The key requirements for that are established by the merchants themselves, who also choose which customer groups to include in the list of automatic refunds. Can attest to the fact that payment processing for many businesses because they offer this service on a platform along with other tried-and-true anti-fraud measures.

The primary decline response codes are grouped by Visa and Mastercard. A business may be charged if it retries transactions that have been denied for specific reasons, which increases risks for merchants. Repeated payment attempts can be quite expensive if automated. In other words, it's another indicator of payment processing that retailers must monitor.

Store or process card data, it must adhere to the PCI DSS. The PCI DSS v3.2.1 has been in existence since 2019, but the 4.0 version won't be available until the first quarter of 2022. The entire set of requirements for its implementation is currently unknown, but some adjustments will undoubtedly be made. It is anticipated that the next version will mandate the use of the appropriate security tools for serverless and cloud storage by organisations that deal with card data. Additionally, the card encryption requirements may be strengthened.

Naturally, there will be a transitional phase while all the necessary adjustments are made, but should be ready for the PCI DSS v4.0 in advance. Make sure financial providers are preparing as well. Carefully evaluate whether organisations are prepared for the anticipated demand adjustments. For instance, few businesses not only keep up with the most recent PCI DSS rules but also assists customers in meeting them.