If chargebacks are a pain in the neck, then perhaps you should consider a different approach.
Payment facilitators (PF) or PayFacs are the retailers’ new favorite because they are an easy way to access merchant services without having to deal with the many parties involved in processing payments.
In essence, they create one mega merchant account that hosts many retailers. The PF overlooks all the payments, and works to straighten all payment processing problems— including chargebacks which is a sticking point among small business owners.
A chargeback is when a customer makes a payment, later disputes it, and convinces the issuing bank to reverse it. It is more like reversing a complete transaction.
A customer can request a reverse charge for a couple of reasons. For instance, a card owner might deny that they approved the payment, or they may file a claim when they aren’t impressed by an item or service, and the retailer won’t listen to their plea.
The consumer registers a complaint with their issuing bank, which then forwards it—through the linked card brand like Visa, MasterCard— to the acquirer or acquiring bank.
The acquirers look into the transaction, and its legitimacy of the claim by asking the retailer to show the necessary credentials.
In the end, the retailer should be liable for the sum of the transaction. The acquirer pays the amount if the merchant fails for whatever reason.
The Critical Role of PayFacs
A PayFac can make the chargeback process less painful for a retailer … Read the rest