Why You Should Audit Your Payment Processing System
You and your customers rely on your payment processing system countless times a day. For it to be effective, it must be fast and easy, as well as efficient and secure. Today’s payment processing system has more demands than ever, especially in light of recent security risks. As a result, every business should put some effort into properly and thoroughly auditing these systems. Doing so shouldn’t be an option or an afterthought. Rather, it should be a component of daily maintenance done randomly to protect your customers and your company’s financial security.
“Don’t assume all is well. As a business owner, the worst thing you can do is to wait until there’s a problem to take action to find out what happened. Be proactive.” states Josh Moody, President of a finance company.
Complex Transactions Create Gaps and Risk
It wasn’t that long ago that payment systems were simplistic. Today’s methods are far more complex, with numerous additional steps and a automated but integrated process. It’s not just your company and the credit card company. Now, it involves payment processors, acquirers, banks and numerous other organizations. This adds more risk with each swipe of the card. As a result of this risk, audits become incredibly important. “View audits as a safeguard, a tool to answer your question of whether your financial system is secure and to be trusted.” States Cameron Kriss, President of Best Payroll Services.
New Technology Further Enhances the Need for Effective Audits
To further strain your company’s payment processing system is every changing technology. Smartphones are one type of additional change. Now, digital wallets are further making payment processing complex. The good news is that a well-qualified payment process can handle the process without fail and has the tools and resources to keep up with these changes. So, then, why should you, as busy as you are, implement a payment processing audit into your business’s risk management procedures?
Do You Assume the Fees You Pay Are Accurate?
For a business to implement any type of procedure, it must prove financially viable and beneficial. Audits often save businesses thousands — if not millions — of dollars from mistakes. While there is a risk of fraud and theft, other errors can add up, leading to costly fees you shouldn’t have to pay.
Merchants overpay millions of dollars annually because of downgraded transactions. These occur for various reasons, but lead to an inaccurately processed payment. The transaction does not get processed in accordance with the specific instructions required by the merchant processor and/or the acquiring bank. This happens many, many times. When it does, the transaction is downgraded and, that translates into higher fees for you.
You may be facing downgraded transactions for numerous “small” mistakes. Some instances might include:
· Batches do not go through the proper closing procedure each day
· Transactions are captured for an amount that is different from what was previously authorized
· Merchants manually enter transactions; a card is not swiped
· The transaction authorization has expired
· Orders that are taken over the phone, online, or through mail are not processed using AVS
The risks of overpaying are there. But, do these risks still give you a reason to invest in auditing?
The Benefits of Payment Processing System Audits
There are numerous potential benefits to merchants of all types for audits. For example, you’ll enhance your security systems through hardware solutions. This can give your business a level of protection against consumer avoidance due to increases security threats. You can reduce the scope of and implications of compliance obligations. You can be confident that payments are authorized, effectively processed, and safe.
“It’s important for business owners to view auditing payment systems a key component in risk management. It’s the same risk-management steps you need to take in any other sector of your business.” Explains Charles Warton, VP of Operations for Credit Card Processing Specialists.
With the increasing risk of security and data privacy concerns, businesses cannot afford to overlook the value of auditing. Not only does it aid in protecting the company from would-be theft and fees, but it also helps to give the consumer, and the business owner, confidence with every swipe of a credit card. It reduces risk, improves business operations, and cost-effectively improves a company’s bottom line. There are few reasons not to implement this all-important system, then.