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The Green Sheet Online Edition

November 13, 2023 • Issue 23:11:01

Navigating payment outages: The crucial role of communication

By Gregg Aamoth

In today's cashless economy, where in-person payments increasingly rely on digital transactions, merchants find themselves dependent on payment processing infrastructure like never before. However, this dependency also exposes them to vulnerability when a crucial element of the payment ecosystem fails.

The resulting payment outage, even if it only lasts a few minutes, can be a perplexing and frustrating experience for both merchants and consumers, leading to revenue loss and strained relationships.

The challenge lies in the complexity of diagnosing and resolving these outages promptly. Unlike a power outage or a disrupted internet connection, pinpointing the cause of an in-person payment not going through due to a system-wide or partial outage isn't as straightforward.

When a payment authorization attempt fails, there are literally hundreds of different error codes intended to provide a reason for the failure and what steps to take next. However, as most sales associates don't memorize the error codes and often the codes themselves aren't clear, they typically resort to re-running the transactions or suggesting customers use alternative cards before realizing the larger issue at hand.

The speed at which merchants recognize an outage is the root cause of failed transactions and how well their sales associates are prepared to handle an outage can significantly impact the outcome. Quickly notifying and efficiently guiding associates through the process of accepting offline payments is essential in collecting revenue during the outage and avoiding losing customers forever.

The cost of poor communication

First of all, real-time communication sent directly to the in-person point of payment is paramount in the event of a payment-affecting outage. Payment processor outages not only disrupt operations but also lead to confusion and stress among business owners.

Merchants rely on their service providers to inform them and help them respond quickly to unforeseen—and essentially invisible—disruptions. This lack of communication can strain relationships and result in higher merchant churn.

Recent incidents, like Square's day-long outage, highlight the impact of such disruptions on businesses (see tinyurl.com/2p9masn9). Merchants had no idea why their customers' transactions were not going through and lost thousands of dollars in sales due to delayed responses, which emphasizes the need for preparation and communication.

However, real-time notifications are not enough. Merchants and their associates also need proactive messaging and training so that they are better prepared when an outage occurs. While talking about what needs to take place when your service fails is not something anyone wants to focus too much attention on, it's a reality. 

Being prepared hinges on efficient communication between payment processors and merchants. Merchants should receive real-time updates on outages with details, allowing them to inform customers and make informed decisions. This approach eliminates panic and scrambling during outages, making a challenging situation more manageable.

Leveraging the power of the smart payment terminal

Smart payment terminals are playing a pivotal role in this communication evolution. These terminals, with their cloud-based connectivity, touchscreen capabilities, versatility and wireless connectivity, are replacing legacy POS terminals. They provide merchants with essential support, offering updates, insights and guidance.

Smart terminals enable direct communication between payment providers and businesses. They allow for real-time notifications and offline functionality, ensuring operations continue during outages. Moreover, they empower merchants to educate their associates and, in turn, their customers, leading to increased satisfaction and loyalty.

The key to navigating payment outages successfully lies in timely and effective communication, and smart terminals are at the forefront of this transformation. As the payments industry continues to evolve, understanding and embracing the power of communication is essential for merchants, consumers and all stakeholders in the payments value chain. end of article

Gregg Aamoth has over 30 years of experience enabling secure communication, promotion and omnichannel shopping experiences for globally recognized retailers and financial services brands. He is the founder and CEO of POPcodes, a provider of smart-terminal based direct-to-merchant communications and value-added solutions platform that is used by leading payment processors and 10’s of thousands of merchants across North America. Contact him at linkedin.com/in/greggaamoth.

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

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