Credit card processing is a slightly complex concept -especially since there are several ways to get access to the credit card information of customers. It is possible to process credit card transactions online through your e-commerce store, over the phone, and in person.
Even while doing the same in person, there are more ways to take information out of the card. A customer can consider swiping, tapping, or dipping their card. They can even utilize a mobile wallet stored in the smartwatch. Indeed, an accounts payable representative or a dedicated service provider can always consider manually keying-in a particular transaction.
Keyed-in transactions take place when you go ahead with entering the respective credit card transaction manually into the POS (Point of Sale) and credit card terminal system. This is quite contrasting to dipped, swiped, or tapped payment methods. These practices are capable of capturing payment-specific data when the card will make contact with the payment device.
Running a Keyed-in Credit Card Transaction
Executing keyed-in transactions via credit cards will include more work for the sales individual in comparison to other practices of credit card transactions. Still, it is quite easy. The exact manner in which the process will take place will ultimately depend upon the specific software you aim at using. The general series of steps are:
- Firstly, your sales individual will generally take the credit card of the customer to read. If they do not take the card, they are expected to collect the respective card information from the customers. It is similar to the manner in which payments are made over the phone.
- Next, they should go ahead with selecting the manual method in the payment processing or POS system.
- From this point, the software solution will offer them space to manually type the respective card number, in addition to the expiration date, and the CCV security code in some cases. Based on particular credit card specifications, you might also be needed to enter the full billing address or ZIP code in association with the credit card.
- Eventually, the sales individual will advance to the next stage as instructed by the software solution. In most cases, this step is running the transaction.
Ultimately, the payment system goes ahead with tokenizing the credit card information while forwarding the data to the bank for verification and authorization of the transaction. Once the same has been authorized, the bank moves ahead with disbursing the funds to the respective merchant account as you can continue concluding the transaction.
What is the Need of Running Keyed-in Transactions?
Keyed-in transactions take place for a wide range of reasons. One of the most common reasons is that the credit card is not dipping, tapping, or swiping correctly. This ensures that manual entry is the only remaining option. It is particularly common for customers with well-loved or old cards.
The other reason you might consider running manual transaction is that you are not able to swipe the card in real time for practical or technical reasons. Some of the scenarios can be:
- When you are taking over the sale on a phone. In the given case, a customer will go ahead with reading the card information that you will input manually.
- You have field service technicians or sales individuals who might be equipped with a keyed-in card and terminal information for collecting payment and completing the transaction on site upon the completion of the service.
- You have access to written orders out of customers and need that they share the respective credit card information on the particular order.
- You go ahead with sending out paper-based invoices and attaching a payment form such that customers can fill out as well as send back the form to you. It is a common scenario in the case of medical bills.
What are the Benefits of Keyed-in Transactions?
Keyed transactions are immensely useful for merchants. Some of the primary reasons are:
- They offer you with the way of collecting payments in the case that processes like swiping are not any option. On an overall basis, keyed-in transactions can be regarded as a part of the well-rounded system offering you the flexibility to accept different forms of payments.
- They offer customers with the overall convenience of obtaining items easily -instead of running home for a different form of payment.
Ultimately, a keyed-in transaction will allow you to offer unmatched customer services. Therefore, it serves to be an excellent tool in your domain.
What are the Cons of Keyed-in Transactions in Comparison to Swipe Transactions?
Some of the downsides to consider as far as using keyed-in transactions are:
- Higher Costs of Credit Card Processing
One of the major demerits is that keyed-in transactions are usually available with higher fees of credit card processing in comparison to swiped transactions. They operate as card-not-present CNP transactions. This will be executed as card-not-present CNP transactions. This will always increase the overall risk of fraudulence as scammers will go ahead with counterfeiting credit cards that resemble real credit card information.
As the bank will take on more risks in comparison to the card-not-present transaction, they will end up charging the seller more fees to ensure compensation.
- Increased Liability and Data Security Risks
Manual transactions also tend to increase the overall liability in some ways. It is because it turns out to be the least secure way to execute a payment.
- Firstly, if it turns out to be a fraudulent transaction, the bank will eventually shift the liability back on the respective merchant for executing keyed-in transactions. Therefore, you will be responsible for all the associated fees for the chargeback. If you are not using updated hardware that is EMV-compliant, you will face the level of liability now with the respective transactions.
- Secondly, it becomes easier for your employees to get away with card information when they will have prolonged access to card-specific data -particularly if they are writing the card-specific information.
- Eventually, in case of written card-specific information, even with the most reliable employees out there, if you do not dispose of the same correctly (for instance, shredding), anyone else can get their hands on the card information of the customers.
Reducing the Number of Keyed-in Transactions in the Business
You might not be able to eliminate the process of entering transactions manually entirely in your business. At some point, technology might also fail.
Therefore, there are several ways in which you can minimize the number of keyed-in transactions that will take place at your store.
- Training Your Staff: As an organization, you can train your staff to request the secondary method of payment instead of automatically switching to the process of manual entry. Make sure that you are teaching your staff proper methods of requesting that will not fault the customers. This will not cause your staff inadvertent embarrassment.
- Using a Virtual Terminal Staff: You can think of using a virtual terminal staff when a customer will place an order over the phone. Usually, this implies that you are expected to send the customer a dedicated invoice or billing page online through the payment processor for them to consider re-entering the information.
- Updating Credit Card Hardware: It is crucial to regularly update credit card terminal or hardware. If you find that the cards of your customers are not reading commonly, the issue might be associated with the hardware instead of the cards.
- Offering Workers with a Mobile POS: The workers who might be heading out on the field can leverage the services offered by a mobile POS. They can also use a payment app or a card reader. While mobile card readers tend to be quite affordable nowadays, you can still look for reliable mobile POS solutions. The solution you choose should be capable of securely capturing payment data without the need of additional hardware.
Lowering Payment Processing Fees
If your ultimate goal is to keep the overall processing fees on a lower spectrum, you can think of choosing a reliable payment provider. While working at a store and executing a transaction, some individuals might have to deal with a badly-functioning or broken machine. To combat this issue, you can think of running card in the form of a keyed-in transaction as the ultimate solution.