The Benefits — and Drawbacks — of Digital Payment Solutions

In order to answer that question, we first need to back up a bit. In 2020, the entire world went online. You might be thinking, “Wasn’t the whole world online before?” For some industries, that was true. But for payments, an analog giant in an ever-increasing digital world, the global pandemic, and ensuing online revolution was a major shift.

Businesses that had gotten by for years — decades even — with physical terminals for in-person customers suddenly needed to start selling over the Internet. Even restaurants, the most IRL business there is, were putting their menus online for the newly-created take-out demand. Even post-pandemic, the trend of digital and contactless payments continues. Between 2020 and 2025, global cashless payment volumes are set to increase by more than 80 percent.

All this new digital payment activity had many benefits, but it also had one major drawback — fraud. While the percentages have remained the same, the increase in volume has meant more than hundreds of billions of dollars in fraud. Judging by conversations with senior executives at card networks and processors over the course of 2023, this number is likely an order of magnitude higher, in excess of $1 trillion per year. People, especially large payment processors, are taking notice.

Types of fraud

Before getting too much further, it’s essential to take some time to explain what exactly we’re talking about when we say “fraud” — and what it means for businesses.

It’s more than just a card getting stolen or a number skimmed — that’s first and foremost a police matter. But once that card number is used to make a transaction, then it also becomes a matter for the payment industry. When someone realizes their card has been used fraudulently and calls their bank or credit card company, that company then issues a “chargeback” and passes along the information to the business, who may or may not know how to handle it.

In the cases of more sophisticated fraud, where bad actors use web crawlers to run thousands of transactions in milliseconds, testing to see if the card numbers they hacked are valid before selling them on the dark web, businesses almost certainly won’t know how to combat it. In the last three years, instances of this kind of fraud have caused untold grief and stress for business owners who decided to start selling their products and services online for the first time.

Finally, there’s what we in the biz call “friendly fraud.” This is fraud that is reported when people see a charge on their statements and don’t remember what it was or where the charge occurred. This accounts for only about 1 percent of fraud reports, and, as you’ll see below, can be easily mitigated.

What Does Fraud Mean For Business?

For businesses, fraud can be anything from a minor headache to a major problem. For the companies who lost their PayPal accounts, it was a potentially business-ending issue.

The reasoning behind PayPal’s decision was simple — if not entirely fair or understandable. With the influx of businesses accepting payments digitally, and therefore an influx of fraud, they increased the number of businesses they consider “high risk.”

“High-risk” businesses have always been a grey area for payments — businesses like pot stores, strip clubs, and casinos have historically had a hard time finding payment processors willing to work with them. This is due to the fact that they tend to have more incidences of fraud, and therefore it costs payment processors more to work with them.

But why, all of a sudden, were autobody considered high risk? And travel agencies? Even e-commerce stores have made the list. PayPal, and other major payment processors, decided that businesses that don’t typically have ways to mitigate fraud were no longer worth supporting, and took their accounts, and the money kept in them, away.

While their decision to close accounts made some noise, since then, major payment processors including Stripe, Square, PayPal, and others have quietly been continuing to shut out small businesses, and eliminating services for customers who don’t process high volume or who operate in smaller industries they no longer consider “enough” to be worth their time.

Small Businesses Shouldn’t Have to Become FinTech Companies

Payment processors may offer some small businesses higher rates and fees to supposedly help mitigate fraud and allow them to keep their accounts, but the truth is they do nothing to protect their customers, and if or when those customers start seeing too much fraud in the eyes of Stripe or PayPal, they’ll just cut them off.

Yes, these businesses can attempt to mitigate fraud on their own, but for small business owners who aren’t payment experts — and frankly shouldn’t have to be — hiring developers to add protections to their payment website and beefing up on KYC protocols just isn’t a reasonable request.

So What’s the Solution?

In a word, Sync.

With Sync, we offer a universal financial ecosystem that manages risk, mitigates fraud, and protects business owners while allowing them to get back to what they do best — their business.

With no upfront costs and no limits on processing, businesses can be up and running on through the GiveSync platform in minutes, and immediately start accepting the online payments vital to their businesses.

And because we offer a financial ecosystem, rather than just one piece of the process, we can better manage fraud and risk than anyone else.

For what you’d typically consider fraud — ie, cards being stolen and used for one-off transactions, we offer a 24-hour buffer. Within a day, any charges can be stopped and deleted like they never happened at all, eliminating chargeback costs for our customers.

Our system also immediately prevents sophisticated fraud, and while we do gather as much information as possible in hopes of catching and stopping these bad actors, we also immediately deny transactions before chargebacks can occur. Our system has already identified — and eliminated — millions of these transactions.

Finally, we offer all of our merchants dynamic descriptions for their payments — meaning customers know exactly who and what they are on their bank and credit card statements. If a customer does call your business with a question or to request a return, we make that easy as well, with the ability to resend receipts and automatically issue refunds.

We do this because, at Give Corporation, we believe in the little guy. We firmly believe that without small businesses supporting the middle class, our entire economy will fail. Mom-and-pop shops need access to premium technology options just as much as WalMart, but shouldn’t have to hire a team of developers to do it. With GiveSync, we make that possible.

Big payment processors like PayPal and Stripe might be willing to leave 60% of the market up for grabs. With GiveSync, we not only can support these businesses but do so gladly.