Merchants can't forget payment flexibility in the post-breach environment

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It's been a year of data theft. In the wake of Equifax, Deloitte, SEC and other major security breaches, the personally identifiable information of millions of people has been put in jeopardy.

Against this backdrop, the imminent holiday shopping season, from Black Friday to Boxing Day, may look positively menacing.

Merchants want what is best for their customers. Unfortunately, sometimes two different things that are good for the customer can be in conflict.

I'm referring to security and usability, an age-old debate that has troubled online merchants since the very beginning of e-commerce. It would be safer for the customer if merchants only accepted credit card transactions, but the customer wants to have a variety of payment options available to them. So a retailer who doesn't accept debit will likely have less fraud, which protects their customers, but will also see their conversion rate go down, as some shoppers who prefer to use debit, or who don't own a credit card, will shop somewhere else.
The other thing that complicates the credit vs. debit debate for merchants is chargebacks. From a merchant's perspective, a major benefit of debit card transactions is that cardholder can only dispute a transaction within 60 days. Because of this rule, there are fewer debit card disputes overall and there is less chargeback lag for debit transactions than credit transactions.

From the merchant's perspective disputing a chargeback is similar for both types of payment cards, but you should be aware of whether a chargeback is coming from a debit or credit card so you can adjust your dispute process accordingly and increase your chances of recovering the funds. Don't forget: If you can prove that the transaction was not fraudulent, the liability will shift back to the cardholder.

The good news is that merchants can have the best of both worlds. Yes, debit and credit both have their downsides, but both of those downsides disappear if you stay up to date with the latest fraud prevention and chargeback management practices.

As we enter the busiest sales period of the year, the last thing retailers want to do is create any friction that money turn customers away. It's important to offer shoppers the choice between paying by credit or debit, but it's equally important to prepare for fraud and chargebacks. This year, after several major data breaches, this is truer than ever.

This holiday season, fraudsters will be targeting every type of payment card. Debit card support allows merchants to grow their audience and increase their conversion. Credit cards offer consumers much better fraud protection than debit cards, but also mean that merchants will likely have a higher chargeback rate. But if both shoppers and retailers behave safely and responsibly, it will be a happy holiday season for everybody.

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Data breaches Retailers Credit cards Debit cards Equifax ISO and agent