Fighting parking payment fraud with an integrated payment processor
Have you ever looked at your credit card statement, seen an unfamiliar charge and immediately called the credit card company to dispute the charge? A chargeback, as this is typically called, occurs when a cardholder disputes a charge on their credit card statement with their card issuer, and then the card issuer reverses the funds previously paid to the merchant.
Card Networks, Issuing Banks and Merchant Processors have chargeback policies in place that are intended to help prevent and resolve fraudulent credit card transactions. These policies, however, can create financial, compliance and reputation risks– including lost revenue due to high fees, flagged merchant accounts and fraud attempts– for merchants that do not know how to appropriately manage and prevent chargeback activities in their specific industry. What many parking operators don’t realize is that both fraud and chargeback risks in the mobility industry are preventable or at least recoverable with an integrated processor partner that understands the consumer trends and context of transaction activity.
Integrated processing partners, like Passport Payments, understand how to prevent and resolve chargeback activity for micro-transactions, which can help increase your bottom line and build more credibility with your end users. By working with an integrated processing partner such as Passport Payments you will benefit from:
Proven chargeback prevention support
When you process with a specialist in the parking and mobility space, like Passport Payments, you gain access to a processing solution that is specifically optimized for chargeback prevention. Cities who utilize this type of solution typically see less than .01% of their overall volume disputed by cardholders by leveraging proven best practices including:
- Simple and recognizable statement descriptors
- Enhanced cardholder authentication tactics with use of mobile wallets and AVS trends
- Rate limiting to prevent bad actors attempting to test stolen cards
Automated chargeback processes for revenue recovery
With a non-integrated processor, typically chargeback activities occur in a silo, outside of where end user accounts and records are actually managed. Take for example a cardholder that purchased a City parking permit, only to later dispute the transaction with his card issuer to initiate a chargeback transaction. The City’s revenue from the permit has been clawed-back and returned to the cardholder by the processor, but because that processor is not fully integrated with the City’s permitting platform, the permit will still show as paid or active, unless manual action is taken by a City employee. When these chargeback activities are overlooked, they reinforce bad behavior with cardholders who may continue to initiate chargebacks on transactions with the City.
Integrated payment processors, like Passport Payments, have direct line of sight to chargeback activities and can therefore take the appropriate action on them when they occur without manual intervention. Configurable, automated tools can initiate updates to cardholder accounts without manual intervention including:
- Clawing back wallet funds from a wallet balance
- Deactivating permits
- Converting a paid citation status back to unpaid
- Communicating account updates to cardholders
These actions help the City recover revenue and reinforce good behavior with cardholders.
Waived Chargeback Fees
Chargebacks are expensive, especially when associated with small transactions like parking transactions. Typically there is a processing fee associated with the initial chargeback request, and subsequent fees that could follow. In the parking industry, a typical parking session transaction is around $5. If that transaction is disputed, the city would pay a $5 fee, and any attempts to reverse the dispute again would result in more lost revenue, sometimes resulting in 2-3X the cost of the original parking session, thus creating a negative effect on the bottomline.
While the features described above play a significant role in preventing and recovering lost revenue from chargebacks, if all else fails, Passport won’t pass through chargeback fees to you when you leverage our merchant processing solution.
If you are experiencing a large amount of chargebacks within your parking operation or simply want to learn more about integrated payment processing through Passport Payments, contact a sales representative today.