Challenges with Payment Processing: How to Overcome Them

Payment processing problems are operational problems. Slow terminals lose sales. Excessive chargebacks drain revenue. Poor support wastes time. Here are the five most common challenges and exactly how to address them.

Two Types of Payment Processing

Before addressing challenges, it helps to understand the two fundamental modes of payment processing:

Online Payment Gateways power e-commerce transactions. The gateway encrypts card data entered by the customer, routes it through secure networks, and returns an authorization code — all without the card ever being physically present. See How to Choose the Right Payment Gateway.

Standard POS Systems handle in-person transactions at physical locations. Modern POS systems manage payment processing alongside inventory, loyalty, employee management, and fraud reduction — all in one integrated platform. See GoPayhawk's terminal and POS options.

Challenge 1: Slow Payment Processing

Slow terminals frustrate customers and create lines. The most common culprits:

• Outdated equipment: Older terminals using dial-up connections process far slower than modern ethernet or Wi-Fi connected devices.
• Network issues: A slow or unreliable internet connection is often the bottleneck, not the terminal itself.
• Software that needs updating: Terminal firmware updates often include processing speed improvements.

Solution: Upgrade to a modern terminal with ethernet connectivity and ensure your network infrastructure supports your transaction volume.

Challenge 2: Chargebacks

Chargebacks represent one of the most significant ongoing costs for many merchants — not just the $20–$100 fee per incident, but the revenue reversal and the risk of elevated processing rates if your ratio climbs above 1%.

Solution: Use updated POS equipment (EMV chip reduces counterfeit fraud), maintain clear communication with customers about purchases, display refund policies prominently, and respond to dispute notifications within the required window. Read How to Reduce Chargebacks for a detailed guide.

Challenge 3: Fraudulent Activity

Fraud takes many forms: stolen physical cards, stolen card numbers used for CNP transactions, account takeover, and friendly fraud. Each requires different defenses.

Solution: Work with a processor that provides layered security — PCI-compliant terminals, real-time fraud monitoring, AVS and CVV verification for online transactions, and chargeback protection. GoPayhawk provides all of these as standard features.

Challenge 4: High Processing Fees

Most merchants on flat-rate or tiered pricing are overpaying. If your effective rate is above 2.5% and you're not a high-risk business, you're almost certainly overpaying.

Solution: Switch to interchange-plus pricing. Request a free statement analysis from GoPayhawk and see the comparison in writing before you commit to anything.

Challenge 5: Poor Customer Support

Payment problems at the register don't wait for business hours. If your processor's support is a chat window and a ticket queue, a terminal outage during your busiest hour can cost you significant revenue.

Solution: Choose a processor with 24/7 live support and a dedicated account manager who knows your business. Before signing, test the support line — call at different times, ask specific questions, and assess the quality of the responses you get.