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This is the right article for you if you are tired of dealing with cash on delivery and the associated time and effort it requires. If you wish your customers would opt for debit or credit cards instead - then look no further!
Until the end of the article, we will discover the solution to this predicament by educating you about one of CloudCart's cutting-edge payment methods - Payment Authorization and Capture.
Despite the fact that various payment options like cash, wire transfers, vPOS services, and PayPal exist, we believe that none offer the same level of flexibility and security as CloudCart's new authorized payments.
But what exactly are “captured authorized payments”, and how can they benefit your online store and business? Let's delve into the details.
Payment Authorization and Capture: Explained
Authorized payments are a form of payment method functionality that all CloudCart stores can have. They allow you, the merchant, to capture a payment from a customer's bank account once an order has been sent out.
This functionality extends to both credit and debit cards. It reserves the order value within the customer's bank balance without actually withdrawing the funds. The automated capture occurs only after the order is marked as "Fulfilled," ensuring a seamless transaction.
Additionally, manual capture gives you the ability to withdraw the reserved amount by simply pressing the "capture" button in your payments panel. In the event of order cancellation, if the funds have not been captured, you can easily "unlock" them, providing instant access to the customer.
If you are a merchant who would like to increase his online payments and reduce cash payments upon delivery – CloudCart’s newest automatic capture authorized payment method is the solution for you.
The solution comes with both manual and automated capture options available through your CloudCart payment integrations, learn how to set up your payment captures effortlessly.
Use Payment Authorization and Capture - Here's Why
Stop fraudulent orders dead in their tracks with CloudCart's new authorized payments. Call your bank to see if your account supports it.
It's More Secure for the Merchant – Fraud Prevention
No one likes encountering a scammer - with CloudCart's authorized payments you won't have to.
It allows merchants to be more secure when completing an order. Check-out payment authorization first ensures the customer has the amount in their balance before completing the order.
Cash-back fraud schemes which take advantage of EU regulation chargeback policies are a big problem - CloudCart gives you a solution!
Payment Authorization Guarantees Payment for Services
eCommerce online stores often struggle with cash payments, but their customers love them. There's a way to reverse the trend!
Reserving the funds inside of the customer’s account happens instantly after they have finalized their order and payment details. This means that once the order is sent out, you can capture them - now they are yours!
The capturing process starts the money transfer. Оnce the order is sent out, you will receive your payment – guaranteed. These funds are unavailable for the customer – the order’s payment status will be “pending”.
The actual transfer of the funds happens once the capture protocols between the merchant’s store and the customer’s bank have cleared.
The total time for the finalization of the money transfer from a customer to а merchant, can take from 1 hour to a couple of days depending on the banks and their processing protocols.
It Increases Customer Trust
What is the customer afraid of - Money instantly leaving their balance and not knowing if they will receive a product.
Because of this fear a lot of people, especially in the Balkans, prefer to use cash point payments rather than online payments. The customer pays upon delivery rather than once the package has been sent out.
How does CloudCart payment capture solve this problem?
By using authorized payments in your CloudCart store, you only “reserve” the money in the customer’s bank account – the reserved amount is still visible to the customer.
Authorized payments are “captured” once you’ve sent the order. This can happen automatically or manually depending on your settings.
The customer sees their money in their balance and can reach them instantly if they cancel the order.
Money is transferred only after the merchant has “captured” the required amount either automatically or manually.
Important: This feature is available only for enterprise level and higher online stores.
Captured Payments Reduce Transaction Time and Fees
By capturing a payment automatically, you know you will be getting the exact amount for the order.
Online stores which sell bulk or by the weight products, can more easily calculate the precise amount to charge based on the sent out order.
There is no need to return money from your bank account or to even calculate the amount – the process is automated and guarantees customer and merchant satisfaction.
This improves return policies which further increases customer trust in your online store and makes them more comfortable with shopping with you.
Cash payments for physical goods happen through 3rd party companies like courier services, which take a small % cut from the earnings.
They are audited in a different way than online payments like vPOS payments. Cash payments take more time, are subject to additional fees and are hard to audit.
Important: All transactions done through automated and manual capture payment methods require an agreement with your bank provider to enable authorized payments on your CloudCart online store.
Refunds are far Easier
It's true - refunds are quite unpleasant - both for the customer and the merchant. By capturing payments CloudCart, you make the entire process quite a lot easier. How?
When you have authorized payments enabled, you can choose “manual capture” or “automatic capture”. Manual authorized payment captures require you to manually capture the payment from your CloudCart store order page.
If you have not yet captured the funds, they will stay as “payment pending” in the customer’s bank account – once you release a payment, the funds are instantly returned to the customer.
To reduce the chance of charge-back scams, then use the manual capture payment method.
If you are not encountering mischievous customers, then use the automated payment authorization and capture option.
Cons of manually capturing payments
Manually captured payments take longer to process into your business bank account. They also require a human interaction which can increase operational costs. Automated captured payments are 65% quicker.
Pros of manual capture payments
Manual capture payments allow you to “release” the money if there is a charge-back request from the customer. Authorized payments have a 30 day waiting period, after which the segmented money is released to the customer.
If you use automated capture payments and there’s a charge-back request, you have to return the money to the customer through a bank transfer which has fees and is an audit headache.
With Manual Capture Authorized Payments, you instantly give the money back to the customer. You do not have to:
- Pay for bank transfer fees
- Deal with charge-back fees
- Deal with charge-back accounting
- The customer gets their money back instantly
This can be quite beneficial for several industries including wholesale merchants, fashion, food (delivery, restaurant delivery, grocers, etc.).
Better Inventory Management
Delayed capture payments give you the time to send out a product which is not currently in stock. You only charge the customer the value of the product once you have it in stock.
This new payment authorization and capture feature is the perfect solution for drop-shipping merchants and FMCG (Fast Moving Consumer Goods).
No fees for refunds
If a refund or a charge-back is requested, you can instantly return the money without paying bank processing fees out of pocket.
Make your online store operations smoother and optimize every aspect of your business with CloudCart’s new payment authorization and capture today!
If you frequently encounter charge backs or refunds with your store, then it’s wise to use manual captures and wait the full 14 days of the EU return period, before you capture the money and finalize the purchase.
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