It took online outdoor products retailer iWarehouse.co.za three years to come around to the idea of accepting credit cards on its website – but, says owner John Guthrie, “It turned my business around. I should have done it from the beginning.”
Guthrie was wary of accepting credit cards when iWarehouse.co.za opened its virtual doors in 2008 for several reasons: “We operate on very tight margins and we were afraid the credit card fees would wipe us out. We were also very afraid of fraudulent transactions and bank clawbacks.”
For three years iWarehouse.co.za operated purely on an EFT basis, until increasing customer pressure forced Guthrie to find a credit card solution.
His homework eventually led him to PayGate: “They were the most cost effective payment service provider, and even though service wasn’t actually on my shopping list their responsiveness and the ease of dealing with their support staff sealed the deal for me. Their technical support and backup systems are great.”
The effect on his business was instantaneous, says Guthrie: “We doubled our turnover within a month or two. I hadn’t realised how many sales I was losing – customers feel much more secure paying with their credit cards, and it’s much easier for them.”
Guthrie’s fear of fraud and clawbacks proved unfounded: “We thought we would be at the mercy of the banks, but to this day we haven’t had one clawback due to fraud. Partly that’s because we’ve been very vigilant, but PayGate also has great systems in place. Our guys are well trained and pick up most fraud attempts, but PayGate’s Pay Protector service catches what we miss.”
This is despite the fact that many of the products on sale at iWarehouse.co.za are high-value portable items and tempting targets for fraudsters. “With GPS systems and iPads about 50% of sales are fraud attempts,” says Guthrie. “But with good systems in place it’s not a problem.”
The only element of the protection system that doesn’t work is the card associations’ 3D Secure, says Guthrie. “Lots of people abandon their transactions when they reach that hurdle – the password systems don’t always work and the banks haven’t done a good job on consumer education, so people are suspicious. Fortunately, we don’t have to rely on it for security.”