Doing Business Internationally
December 28, 2008
The more you expand your business, the more customers you can reach – that is true. However, when you open your market up to potential new customers, you can also begin a whole new set of programs as well. If you’re looking to start an international portion of your business, here are some things that you will want to keep in mind.
There are two main questions that you will need to ask about this new marketplace:
- Is the customer going to pay me?
- Is the customer going to want to pay me?
The truth of the matter is that the more customers you have the more risk you are taking on. Because you’re increasing the possibility of things going wrong, you need to be a little concerned about these questions – because if you’re not going to get paid, it’s not a wise move.
The first thing that you will want to do is consider how you will want to be paid for your services. You might want to accept credit cards as these accounts can be verified quite easily and without much added cost to you. Things like checks can take longer to verify and can even cause legal troubles in some cases, so those kinds of payments might be easier to limit to countries with which you are most familiar.
However, there are ways to put safeguards in place so that you can be sure that you’re getting paid for services or products that you are selling on the international market. For one, you will want to have some sort of merchant account of third party processor in place to watch the credit card payments that you are receiving. These services will be able to detect fraudulent accounts and stop the transaction from continuing until the situation is remedied. These services can also keep your information secure by acting as an intermediary in financial transactions.
You will also want to create standard shipping policies for international orders that include the full shipping price, insurance as well as tracking. You will also want to make sure that you are never shipping orders that you haven’t verified the payment for. What sometimes happens is that you will ship an order, but then never receive payment, though the product is gone.
Another concern that you might want to consider is that prevalent fraud that is coming from international sources. Your business email accounts might become targets for international schemes when you start to open up to the international market. You should always be on the lookout for any offers for purchases that aren’t coming directly from your secure shopping cart or standard methods of purchase. And if anything doesn’t quite seem right, don’t follow through on any actions that are asked of you.
All of this is not to discourage international business, but rather to realize that you need to be careful when your customers aren’t right in front of you – just as with any online customer. But when you have international customers, they can be harder to track down for legal actions, if at all. Being too careful is always the best policy.
What is AVS or Address Verification Service?
December 24, 2008
When you want to add another layer of security to your online business, you should consider adding AVS to your arsenal against fraud. AVS, or address verification service, allows you to verify the personal address and even the billing information of the customer that wants to make a purchase on your website. This allows you to see if who is shopping with you is really the person that they say they are.
The AVS system works by taking the credit card information that you have been given by the customer and then runs it against what the credit card company has listed for the cardholder. If the two do not match, the charge will be not go through and the cardholder will either need to type in the information again or the card can be taken from the person that is trying to use it.
AVS uses a list of response codes that will help you determine how accurate of information you have received from a customer and what you think is ‘enough’ to allow them to make a purchase. In this day of not being able to see your customers, this code system comes in handy.
X = exact match - address and nine digit zip code
Y = exact match - address and five digit zip code
A = address matches, but the zip code does not
W = nine-digit zip code matches, but the address does not
Z = five-digit zip code matches, but the address does not
N = address and zip code do not match
And then there are these other responses:
U = address information is unavailable at the time
R = retry the transaction - system is unavailable at this time
S = service is not available at this time
E = data not available/error invalid
What’s also great about this process is that the customer will never see that it is happening, even if they are right in front of you. If the information does not match up, the customer is told to re-enter their information or the transaction is denied. The customer can then try to correct the information or they will have to call you to place their order.
There are a number of reasons why you should consider using AVS or a merchant account with AVS:
- Reduce fraudulent charges – When you’re not accepting payments from those whose information does not match up, you can significantly cut down on transactions that are not legitimate.
- Reduce chargebacks – Because you will be verifying information with the customer, you can be sure that it’s the customer that is doing the ordering and really wanted to make the purchase.
- Create customer confidence – When you are verifying information, your customers will feel as though their information is safe and secure.
- Assists online business – Instead of having to track down the right shipping address, you will already know it.
With an AVS system, you can make sure that credit cards aren’t being used when they shouldn’t be used and that you are always getting the money that you desire for the purchases that have been made.
Data Collection
November 2, 2008
For merchants, it is important to remember that you only need certain, specific information from the user to identify and authorize the transaction. For ordinary transactions, you only need the customer’s name, credit card number, contact information and address for verification purposes. A transaction can be completed when you are provided with all these information.
Some merchants tend to make the mistake of going overboard by asking for the customer’s social security or driver’s license number in order to be 101% certain that the order is authorized and legitimate. Going overkill on your data collection practices can lead to detrimental effects to your business. Why, you ask? The occurrence and increasing rates of online identity theft online has led to paranoia on the part of most customers. Fraudsters use numerous techniques for obtaining user information online so that they can use them for illegal transactions. As a result, online users are now hesitant about revealing their credit card numbers out of fear that someone else might obtain it and use it for unauthorized transactions.
Asking too much information then would cause your customers to get suspicious about your website. If they are uncomfortable with the questions and information you ask, they might not proceed with the purchase even if they highly desire your product offerings.
On the other hand, it is often common for merchants to try to get specific information about their customers for marketing purposes. It is common to ask about the customer’s lifestyle, hobbies, interests and annual income. These kinds of information can be used so you can target the customer for future marketing strategies. These questions are understandable, but make sure that you do not ask for more than what customers are willing to reveal.
When asking for information like these that is not necessarily needed for the transaction, always make sure that you make it clear as to what you need it for and what benefits they can get by providing the said information. Make sure you convince them that the information they give will not be used for purposes that will not be beneficial for them.
It is also very important to have a company privacy policy and have it posted somewhere accessible in your website. You can advise your customers to visit your privacy policy page before ordering, as this builds customer confidence.
Also, many online businesses require customer membership before purchasing the products and services available. Signing up to become a member of the site will require customers to come up with a username and password. A password retrieval method is usually employed just in case the customer forgets his or her password. When choosing a password retrieval method, make sure that you provide one that does not ask for very vital information that would cause hesitation on the part of your customer.
In any online business, customer trust is a valuable asset. You must win this trust to ensure success in your venture. However, getting customer trust entails customer respect, especially on matters concerning privacy. Thus, make sure that you treat customer privacy with utmost care by asking just enough information to get your transaction going. Customers will surely thank you for it.