Shielding Your Platform From Transaction Risk
Incorporating payment capabilities into your platform makes it more attractive to your prospective customers, creating opportunities for your business. However, have you considered that it also adds potential risk?
If an online business uses your platform to sell products or services and then goes under, you may end up on the hook for reimbursing the consumers who made purchases. As such, it’s important to do what you can to proactively protect yourself against transaction risk.
What’s the Risk?
With any online payment, there is always an element of transaction risk: one side might fail to pay for their purchase, and the other side might not deliver the promised product or service. The banks involved in these transactions don’t want to bear the cost of this risk, so they shield themselves from it by pushing the risk onto other parties — for example, your online platform.
So what’s the risk for your business? Let’s imagine that you run an online ticketing platform. An event company uses your platform to sell 10,000 tickets to a music festival, but the company goes bankrupt before the festival takes place.
Suddenly you have 10,000 ticket-holders pounding on your door, looking for refunds and revoking charges on their credit cards. With the event company bankrupt, this costly disaster is going to end up hitting your bottom line, and hard.
Sure, your business may have the financial resources to take this kind of hit once. However, as more customers use your platform, there is a growing risk that this won’t be a one-off situation, and you need to make sure that you’re protected accordingly.
Keeping You Safe
Your focus should be on providing customers with a powerful online platform, not worrying about transaction risk. One way to achieve this is to integrate your platform with a payment provider that will take on this risk and shield you from it.
Not all payment providers do this, so it’s important to ask the right questions and understand what you’re getting into before signing up.
For example, Bambora provides platform partners with comprehensive risk underwriting. With a deep understanding of transaction risk built up over years of experience, we take this financial liability off our partners’ hands, leaving you free to focus on running your business.
Going back to the example above, this means the 10,000 angry ticket-holders would become our problem, not yours.
Going Above and Beyond
Beyond providing our partners with risk underwriting, we are also committed to proactively minimizing risk.
For example, we offer tokenization to encrypt all confidential payment data supplied by your customers, which we then store on our PCI Level 1 certified servers. This approach keeps sensitive payment data off your systems, which reduces responsibilities and expenses related to data security.
Integrating your platform with Bambora also gives your customers access to our fraud defence tools. By protecting against fraud and minimizing chargebacks, we make the payment process smoother for your customers—and safer for you.
Less Risk, More Protection
Running a successful online platform is hard enough without having to worry about the transaction risk inherent in online payments. By offloading this risk onto Bambora, you can focus your energy on providing great service to your customers.
To learn more about how Bambora can safeguard your business against financial risk originating from your customers, check out our smart solutions — they can make all the difference for platforms like yours.
Photo Credit: Shutterstock / s4svisuals
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