There are more than 90 million adults in America who are considered “Millennials,” and marketers want their business. Millennials grew up with the internet and are comfortable with shopping online. In fact, online sales topped $1 trillion last year, and a significant portion of those sales were completed on mobile phones. What Millennial consumers do not remember is the days before ATMs and cell phones: older Americans recall a time when they had to visit their banks in person. It may have been a simpler era, but the convenience of online retail is strong enough to erase any lingering nostalgia. Consumers can now shop from home for everything from groceries to vehicles, and large retailers want their customers to have a smooth and satisfactory purchasing experience.
When small businesses first start accepting customer payments online or in retail stores, they need to look at the most popular credit card processing companies and make a decision. When customers do not have enough money in their account to cover a purchase, their debit or credit card may cover it at the time of the sale. However, merchants may find that they are responsible for chargebacks that are due to fraud on the part of the consumer: they may have ample funds to cover their purchases, but if they choose to dispute a charge with the bank, retailers have to pick up the bill. Online credit card payment processing companies want to work with retailers to minimize fraud and chargebacks: the cost to retailers is well over $100 billion every year.
While a chargeback may be initiated due to fraud or insufficient funds, small businesses may not be able to absorb their cost: small business credit card services have to help minimize customer fraud, and there are now websites that offer formalized verification services for buyers and sellers alike. Customers want to make sure that they are purchasing from established, certified retailers with a clear commitment to customer satisfaction. Retailers may not maintain a retail store, relying instead upon online sales. The potential for fraud is much greater online: unless the buyer is registered with a fraud prevention site, there is no way to check customer identification or, often, to track people who commit retail fraud online.
Small business credit card machines now include advanced scanning technology in many states across the country: consumers receive a debit or credit card with a specialized chip inside, and instead of sliding their card for payment they insert the card into the machine. Even small business credit card machines can help prevent fraud and identity theft, and retailers should feel at liberty to request identification from their customers for sales that they think could be fraudulent. The largest credit card processors recommend that retailers keep track of chargebacks with small business credit card machines and initiate investigations into customers who repeatedly dispute sales.
In general, our economy is moving online. Fewer than 10% of recent survey respondents said that they still carry cash: the risk of theft is too great in larger cities, and although thieves can use credit cards without having to enter a PIN, new technology is working harder than ever to defeat fraud. There is newer software that allows people to lock and unlock their phones by using their fingerprints, and retailers are embracing biometric verification. Small business credit card machines will remain in widespread use, but in the next several years, you may have to use your fingerprint to make a purchase at the grocery store.