The 5 Biggest Payment Processing Headaches for ISVs (and How to Relieve Them)

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As independent software vendors (ISVs) know too well, there is a lot more to offering payments than just accepting and processing them. Payment processing is fraught with complexities for ISVs that are trying to keep their customers happy. Besides the transactions, ISVs must figure out how disputes and chargebacks will be handled, for example, or how customers will be protected from fraud. These challenges can affect the overall customer experience (CX), making it essential for ISVs to find effective payment solutions to integrate into their software.

That’s why choosing the right payments partner is imperative for ISVs that want to alleviate those payment processing headaches. In fact, offering an easy-to-navigate, reliable and secure payments platform can turn what are often seen as challenges into seamless, customer-retaining experiences. Let’s unpack five common payments headaches and how to relieve them.

 

1. Onboarding

Headache: Ensuring new customers experience a smooth and efficient setup is crucial for building customer loyalty from the get-go. However, onboarding often involves numerous steps, including KYC (know your customer) compliance, data integration and system configuration. Any hiccups in this process can lead to frustration and even delay the customer’s ability to start accepting payments promptly.

Solution: A reliable payments partner can streamline the onboarding process by offering automated solutions that reduce manual effort and minimize errors. One example of such automation is the streamlined onboarding process with automated verifications. This system automatically verifies the identity of new customers using various databases and compliance checks, ensuring that the onboarding process is both secure and efficient. By leveraging advanced technologies and a well-defined onboarding strategy, an experienced and knowledgeable payments provider ensures that new merchants are up and running quickly and efficiently while protecting you by filtering bad actors.

 

2. Risk Management

Headache: ISVs must navigate a rapidly evolving landscape filled with potential threats. For example, an ISV might face penalties for non-compliance with PCI DSS regulations, which mandate security measures for handling cardholder data. Failure to comply could lead to hefty fines, increased audit requirements and even the loss of the ability to process credit card payments altogether. Failure to effectively manage these risks can result in financial losses, legal issues and damage to ISVs’ reputations.

Solution: The best payment partners offer comprehensive solutions that include real-time fraud detection, and compliance monitoring. These tools help ISVs protect their merchants and maintain a secure payment environment.

 

3. Dispute Management

Headache: Managing chargebacks and customer disputes can be time-consuming and complex. Disputes can also generate a lot of call center inquiries, which can strain company resources and impact the overall customer experience.

Solution: By providing streamlined dispute resolution processes and expert support, a great payment partner can help ISVs manage chargebacks more effectively and reduce the impact on their merchants. For example, their software might include automated chargeback management tools that notify the merchant of a dispute, allow the upload of necessary documentation, and assist by providing easy access to details and context to challenge the chargeback. Depending on the needs of the ISV and their own systems, having direct integration methods, such as REST API resources for disputes, can provide greater flexibility and scalability. This allows ISVs to focus on their core business activities while ensuring positive CX and improving retention.

 

4. Fraud Prevention

Headache: Fraud prevention is a top priority for ISVs, as fraudulent activities can result in significant financial losses and damage to their reputation. Implementing robust fraud prevention measures requires advanced technologies, continuous monitoring, and compliance knowledge. Some specific examples of fraud types ISVs need to watch out for include:

  • Card-not-present (CNP) fraud: This occurs when fraudsters use stolen credit card information to make purchases online or over the phone, without the physical card being present.
  • Chargeback fraud: Also known as “friendly fraud,” this happens when a customer disputes a legitimate transaction, often with the intention of getting goods or services for free.
  • Phishing scams: Fraudsters use deceptive emails or websites to trick individuals into providing sensitive information, such as login credentials or credit card numbers.
  • Account takeover (ATO): This involves fraudsters gaining unauthorized access to a user’s account, often through phishing or data breaches, and using it to make fraudulent transactions.
  • Identity theft: Criminals use stolen personal information to create fake accounts or make unauthorized transactions, posing as legitimate customers.

Solution: A payments provider that offers reliable fraud prevention solutions can help ISVs mitigate this risk. These solutions typically include machine learning algorithms, real-time transaction monitoring and multi-layered security protocols.

 

5. Customer Support

Headache: When merchants encounter issues with their payment platform, receiving inadequate support can exacerbate the problem, leading to frustration, delayed resolutions and potential financial losses. ISVs need the capabilities to provide swift and effective help when things go awry for their customers. Quick service restoration is imperative to keep any business running smoothly, and shortcomings in support can lead to interruptions in platform functionality, setting off a cascade of customer service issues.

Solution: ISVs must offer quality, consistent and knowledgeable customer service, provide comprehensive training materials and resources and implement a reliable system to track and resolve issues promptly. By ensuring that merchants have access to expert support whenever they need it, ISVs become a partner in improving customer satisfaction, thereby building loyalty and reducing operational disruptions.

Payment processing can be challenging for ISVs. But getting it correct is worth it—83% of ISVs said they’ll see an increased revenue share from payment acceptance over the next 12 months. By partnering with a reliable payment provider, ISVs can transform these headaches into seamless, customer-retaining experiences.

Looking to alleviate pain points in onboarding, risk, fraud, dispute and elsewhere? Contact an expert at CSG Forte to learn more about how we can help you enhance your payment processing capabilities and provide a seamless experience for your merchants.