13 ms·

Why are payment forms so complicated?

245 points by brandonb 14y ago

jasonlgrimes 14y ago
Great article. I do think cutting out "account creation" is something to look at. My friend, Joe just launched a very easy to use check out procedure for his new start up - https://www.getphotogasm.com/ https://www.getphotogasm.com/. Great example.
brandonb 14y ago
I'm the OP. Let me know if any of you out there have questions! Or, better yet, experiences with simplifying payments on your site good or bad.
- jevinskie 14y ago
  How are you penalized if you don't collect the extra information (besides potentially higher rates as stated in the post)? Are there more frauds leading to chargebacks that may have been detected if the card merchant had more information?
  - brandonb 14y ago
    If you were to use a really minimal payment form (number and expiration), it's likely that you'd get somewhat more chargebacks. However, you'd also get more revenue. Let's say your chargeback rate goes from 0.1% to 0.2%, but your conversion rate goes from 50% to 60%, then you come out way ahead. In our experience, you can stop most fraud without putting up roadblocks for your users. Every site is different, but to give an example, we were able detect 90% of fraud for a site with a huge fraud problem without requiring any extra verification from the users. The really key penalty to avoid is what is called an "excessive chargeback program," which usually triggers for chargeback rates that exceed 1%. You initially get a warning, and if you can't get your chargeback rate down, your payment processor has the right to shut you off. If you're in an excessive chargeback program, then I'd definitely recommend "playing it safe." But otherwise, I think slimming down your payment form and carefully measuring the effect on fraud is almost always a smart business move.
    - thedufer 14y ago
      > Let's say your chargeback rate goes from 0.1% to 0.2%, but your conversion rate goes from 50% to 60%, then you come out way ahead. No, you don't. You need more information about the transaction then that. What if your profit margin is 1%? Then you've come out even, because chargebacks cost you the full cost of an item, but an extra conversion only nets you the profit on that sale. Note: I assumed that the 0.1% and 50% to 60% were both percentages of potential sales, because it made the math easier. Otherwise, you have 20% x 1%=2% more profit and .2% x 120%-.1%=.14% more loss from chargebacks, so you have come out slightly ahead.
- haroldu 14y ago
  Doesn't Verified by Visa and SecurePay by Mastercard solve this problem? Whenever I enter a credit card I get asked to enter an online password as well. Of course, ideally every citizen would be able to sign anything with a public-private key pair, counter-signed by the state.
  - jevinskie 14y ago
    I hated when Newegg started using Verified by Visa. The password requirements were so silly that I would always forget my password. I haven't been prompted to enter my VbV password at Newegg for some years.
  - borlak 14y ago
    Verified by Visa is incredibly annoying to the consumer. I've abandoned payments because I forgot my password. Now I have it turned off completely.
    - retube 14y ago
      How do you turn it off?
      - borlak 14y ago
        I haven't had to use it in a long time so my memory is fuzzy...but last I remember, when the actual Verified by Visa form pops up, there is an option to disable it.
  - jsnell 14y ago
    Verified by Visa is an extremely high friction mechanism. It requires registration the first time around for each CC, and also an extra password or some other authentication mechanism like a bank dongle. If significant people bounce off transactions due to needing to type in their address, or due to needing to flip over the credit card and read 3 numbers, I don't even dare to think of what the bounce rate is for these mechanisms. It's especially bad since just about no websites I ever buy anything from use VbV / SecurePay. That means that I don't remember the authentication secrets off the top of my head, so unless I'm at home will likely abort the extremely rare transactions that really require it. I've maybe needed VbV once in the last year, and had to try 3 cards before I found one that I could use on the spot.
- annon 14y ago
  The "40% higher conversion rates" for not requiring CVV is extremely suspect to me. Looking at the paper, it wasn't an A/B test, but comparing entire sites. There could be any number of variables causing a difference in conversion rates. On top of that, there is no published date, but it does mention May 2007 being in the future. Six years is an eternity in the ecommerce space, and I have a feeling people are more familiar with what the CVV code is and where it is located today.
  - brandonb 14y ago
    You're right that it's not proper A/B test, so it may be a case that correlation doesn't imply causation. Unfortunately, there's not a lot of research published with rigorous A/B testing for this kind of thing. If any of you out there would like to run an A/B test (and have us help detect fraud if you're worried about increases there), I'd love to help!
    - boucher 14y ago
      Of course, any increase in conversion also needs to balance the increase in declines you'll see by not providing a security code.
  - raverbashing 14y ago
    I think it's suspicious as well. Fine, here's the thing, if the person can't find the CVV in the card, I don't want his business. Period
- mrb 14y ago
  I have purchased stuff on sites that have greatly simplified their payment process to the point I did not need to type anything at all! I click "Checkout"; the site displays a QR code; I scan it with my smartphone, which decodes it and prompts "Send 0.123 BTC to xxx?"; and I click "OK". Done. This is how the purchasing experience looks like with Bitcoin which, for merchants, solves the fraud problem. Hence buyers do not need to give any billing information.
  - pixl97 14y ago
    >Send 0.123 BTC to xxx How is 'xxx' determined? Looks like a great place to install malware that overtops the sites QR with its own and sends the payment off to the wrong place.
    - mrb 14y ago
      'xxx' is read from the QR code. The attack vector you mention is no different than malware that intercepts your credit card number when typing it in.
sawyer 14y ago
Hehe, I have a recent relevant experience with this topic: I just finished a simple gift certificate purchase page[1] for a client where I attempted to cut out all unnecessary details; the client's immediate response? "Looks good, but can we add some more fields like name, address, and security code to make it look more 'official'". Edit: I don't necessarily disagree with their intuition; I think some consumers might actually be suspicious of a sparse payment form but I don't have any hard data. [1] https://motorcycle.ctec.ca/gifts.html https://motorcycle.ctec.ca/gifts.html
- jiggy2011 14y ago
  How are you billing on that? Every payment gateway I have used requires at least postcode etc.
birken 14y ago
We at Thumbtack use a similarly simple form, and our chargeback rates are very small [although admittedly we aren't a particularly attractive candidate for fraud]. We also did see both conversion increases and frustration decreases when we switched to a simpler payment form. We do have one difference though (which I would call a simplication): For the expiration date, we just have input boxes for the person to enter it instead of a dropdown. Select boxes are great if a) You can pick a sane default and b) you don't have many options. For a CC form, both of these fail. You cannot set the default with anything better than random accuracy, and each box probably has at least 10 options. Additionally, the expiration date box says "2 - February". I have a lot of credit cards, and none of them say the name of the month on it, only the number. Why waste the space? The user just typed in their 16-digit credit card number, just pop them right into the expiration date input boxes for them to type in their month and year free-form. Don't make them put the credit card down, pick up the mouse, then have to navigate select boxes with tiny print.
- pixl97 14y ago
  >I have a lot of credit cards, and none of them say the name of the month on it, only the number. Why waste the space? Use a lot (more then your sample size) of different credit cards and you'll see some only have 'FEB' or others 'February' and no numerical month at all. Others have the year as '14' or '2014'. It would have been better if the card issuers decided on a standard quite some time ago.
  - tikhonj 14y ago
    That strengthens the case for having the user type in the value rather than using a drop-down menu. That way you can do the heavy lifting of normalizing the format rather than forcing the user to do it in their head. This might seem really petty, but I'm always a little annoyed when I have to mentally convert the number on my credit card into a month. It always takes a moment to remember that 04 is March, or whatever. It's much easier just to type the value.
    - jacalata 14y ago
lucb1e 14y ago
Bitcoin's forms are easier :)
mjs 14y ago
I don't understand why, instead of adding extra fields to collect more information, the banks and credit card companies instead just added more digits to the original fields. So instead of a separate field for the security code, why not just append the security code (and the postcode, and the XXX, etc.) to the credit card number field? I always have to enter a bunch of information anyway, so why not let me enter it all in one go? (Better for copy and paste.) The way they're doing things at the moment is driving people to pay via PayPal, because PayPal requires--hey look!--a single string which they call a "password".
- thecombjelly 14y ago
  > why not just append the security code It may be an extra layer of protection related to getting the credit card number via seeing or taking a picture of the front of the card, having it on the back helps improve security from that aspect.
- brandonb 14y ago
  What makes the security code (CVV) different from just having more digits is that you (the site/merchant) not allowed to store it permanently in your database. You can keep it in-memory for up to 15 minutes while authorizing the transaction. That means in theory, if the merchant's credit card database gets hacked, the fraudsters will get access to the credit card numbers but not the CVV. In practice, the rules aren't obeyed as strictly as they might, so you can easily find credit cards with CVV on the black market.
  - mjs 14y ago
    Even if the different fields have different security requirements, that doesn't seem to be a good reason to require them to be entered separately. I don't really care if someone mandates that digits 1-4 can be sent via email, digits 5-10 can be stored unencrypted, digits 11-16 must be encrypted, and digits 17-20 can never be stored at all. They're still just digits/bits of information, and I have to provide all of them almost all the time anyway. The one exception is when a retailer has saved my credit card number, in which case they might ask me for the CVV only. But I'd rather that they didn't save the card number at all! I have to look up the CVV and copy and paste it into their form every time anyway--so they may as well require the whole thing every time.
VengefulCynic 14y ago
Where companies like Sift interest me is moving from a place where a system determines whether or not it believes a charge is fraudulent to a place where you evaluate the likelihood that an individual transaction is fraudulent. And they're absolutely right that individual components are going to lead to tons of false positives and then eventual end-gaming of their countermeasures. As an example, in the implosion following the dot-com boom, it was almost impossible for denizens of many Eastern European and African countries to buy things online because the incidence of fraud attributed to their country was high enough that the fraud officers at many online retailers wouldn't chance it. I have a friend who lived in Romania who had a credit card that used my address in the US and frequently required me to ship stuff for him because no companies would ship directly to him. He loves the modern era of fraud evaluation, because while his country is weighted negatively, his use of a respected international bank, an IP address in the same area as his billing address and purchase history with many online companies has greatly reduced his level of hassle due to false positives alleging that he's a fraudster.
- brandonb 14y ago
  Definitely true. A lot of sites just block all transactions from, say, Africa when they start getting hit with fraud. But that's a very broad brush to paint with. It's better to use a machine learning system that looks at many signals so that people like your friend can shop online without being hassled.
raverbashing 14y ago
Here's a tip if you care at all for International payment: DON'T RELY ON ZIP CODE ALONE For one, you don't know the different formats of zip codes around the world Second: not all countries have Zip Codes. Like Ireland, for example. See here: http://www.google.ie/about/jobs/locations/dublin/ http://www.google.ie/about/jobs/locations/dublin/ "Dublin 4" is the "Zip code" About the issue of matching addresses, it seems that the payment processors can't do a fuzzy matching (not sure why), so if your address is "P Sherman 42 Wallaby Way Sydney" and you typed "42 P Sherman Wallaby Way Sydney" you're denied the transaction
- deleted 14y ago
  [deleted]
JoshTriplett 14y ago
Even if you do need to collect some of that information (such as the address if you need to ship a product), several of those fields still remain redundant. Notably, you should never ask for "credit card type"; the credit card number already tells you that. I like the forms that just ask for a credit card number and then show the computed card type's logo once you've filled it in. You can also automatically compute the city and state from the zip code, but that requires you to ask for the zip code first, which does break user expectations somewhat. And please, don't ask for "First Name" and "Last Name" unless you specifically need them separated for some reason; just ask for "Name".
- jackseviltwin 14y ago
  That's funny, we came to the same conclusions and implemented them for our checkout flow. Here's an example: http://crop.to/fW http://crop.to/fW Combining first/last name into a name field and auto-detecting card type were easy wins for the shopper, but in user testing, we found that detecting city/state from a zip code had some potential issues. First, the format of the form without city/state surprised some users. One user said something like "where do I put my city and state?" They ended up appending it to the street name. Then they filled in the zip code and saw that it fetched the city/state and then realized how it worked then went back to delete it from the street name field. Also, in the U.S., some zip codes can return multiple cities and states. Our solution was to populate a pull down of the possible values for both fields. It turns out there are small towns/cities that we didn't return from a zip lookup, so city had to be editable for these users. We added a "Let me type it in" option on the bottom of the city pulldown for those users, who are hopefully the minority.
  - signed0 14y ago
    Perhaps having the user enter their location information in the order country, zip, city, state, street would provide a better experience. It's not what they would be used to, but it's at least consistant (information is entered from less precise to more precise). Having to build an additional "let me type it in" option seems like it increases the complexity and confusion. One of the banks I use asks for the zip first and then populates the city and state text fields on the lines below. This also has the benefit of working if Javascript is disabled.
UnoriginalGuy 14y ago
IP based "fraud" detection is fucking annoying. I live in the UK and want to have stuff shipped to family in the US. I've had vendors of all sizes turn away my business because either they didn't like my IP or wouldn't let international addresses order at all. Amazon(.com) has literally earned themselves thousands in additional sales because they happily accepted my UK payment to a US address without fuss or hassle. You might say this is a niche situation but money is money, and I've had lot's of small vendors lose out because they were "US only!" I now also have a "flower guy" because they're the only one in the city who will do international flower orders... PS - Specific example, NewEgg, wanted to buy a several hundred dollar laptop - couldn't. Used Amazon instead.
- mrb 14y ago
  Why do you think it is "IP based"? It sounds more like traditional fraud checks requiring the billing and shipping address to be located in the same country.
  - jacalata 14y ago
    probably because of this quote: On the internet, everything is measurable, and fraudsters leave behind tracks they’re not even aware of. What IP address is the user coming from? edit: oh, you probably mean 'why do you think (random business) refusal is IP based'.
  - matt_serelli 14y ago
    His example of NewEgg is a bad one. They straight up say they don't ship international orders on their FAQ page.
- rwmj 14y ago
  I hope that's not what the article is suggesting. The way I read it, it's more like what Google and Facebook do: very sophisticated tracking of multiple factors (your IP, geolocation, browser identity, second-factor, etc) to find out if it's really "you" logging in, or someone who's just got your password. The problems are: (1) This will never work for a single vendor (unless it's a massive vendor like Amazon, and they're already doing it). It's something the bank has to do so it can tie together all the information about you. (2) Banks have proven to be totally useless at online security in the past, and I don't see that changing any time soon. (3) Google-style security can be a bit annoying when you really are logging in from an internet cafe in a foreign country.
thecombjelly 14y ago
What works for one company may not be acceptable or optimal to other companies. I think the biggest insight is that you should measure these things and see what approach earns you the most money, taking chargebacks into account.
nirvdrum 14y ago
Most of these forms are more complicated because of tax codes and such. If I don't know your name or your address, I can't adequately assess whether I should be collecting sales tax. Failing to collect and report sales tax can come with very hefty fines. There's a whole bunch of other valid reasons too. If there's a problem, it's nice being able to actually contact your customer. Most businesses need to be able to produce receipts, with some data needed to even count as a receipt ("you were charged X on Y" via email -- which you may not have anyway -- usually doesn't cut it). And I'd love to see the data on this, but if someone has gotten to the point where they've decided to purchase and are presented with fields that are pretty standard just about everywhere else, I suspect abandonment rate is rather low. The pros just seem to outweigh the cons on this minimalism debate.
- dave5104 14y ago
  > I suspect abandonment rate is rather low. I'd say it depends on the situation. If you're shopping for something specific, say for a new hard drive or monitor or something, chances are you've been looking around for awhile and once you're in the checkout process, you've made up your mind to commit to that product. A few extra fields for payment data probably won't deter you. But on the opposite side of the spectrum, if someone is going to impulse buy, each field you force them to fill out gives them a few more seconds to decide "Eh, I don't really need this..." and abandon. In those cases, you want payments as frictionless as possible. I know I've done some impulse buys a few times after being drawn in via an email campaign or something--and subsequently decided to just forget about making the purchase.
tzaman 14y ago
Thanks for bringing the topic up, I always wondered why some sites ask me for only my ZIP next to the CC number, but never really got into finding out why.
- cynwoody 14y ago
  A few years ago, gas stations around here starting asking customers to enter their ZIP at the pump. Not long after they started doing that, many added a clarification: billing address ZIP, not residence ZIP. Apparently, some customers thought they were asking for market-research reasons, as opposed to credit card security.
stopcyring 14y ago
sigh, and where are you going to send your invoices to? or is your plan to issue invoices for the costumers ip's. I am sure the tax authorities will love that.
- smiler 14y ago
  Yes you're right - this post has no discussion of what governments might require of a business from a legal standpoint
ceautery 14y ago
The interchange fees Visa/MC charge vary with what information is collected. The minimum required info is assumed to be at a higher risk of fraud, so the fee passed to the merchant is more. Sure, some optimization can be done to make online forms easier to use, but collecting more information is necessary to offset the fact that you aren't physically in a store handing someone your card, letting them see the name on your driver's license, etc.
- tobyjsullivan 14y ago
  This leads to the question: Does the difference in processing fees outweigh the percentage of sales lost due to increased friction? This will have a different answer for every product and business which makes this a perfect example of something every company should be A/B testing.
smackfu 14y ago
This is why I will usually hit the Paypal link if available, because I don't have to enter anything.
nym 14y ago
A: Chargebacks If you don't want chargebacks, accept digital cash in addition to credit cards. Give your customers a discount for digital cash, and charge your price + (estimated cost of chargebacks/sales) for a given period. BitPay / Coinbase are probably your best options for accepting non-reversible digital cash.
- mindslight 14y ago
  That works for the current ecosystem. As it is non-anonymous, bitcoin will eventually become infected with chargebacks. For this process to begin, it just takes one sizable stolen-from party getting the ear of an exchange.
- dminor 14y ago
  Chargebacks are usually the result of fraud. Fraudsters don't use BitCoins for obvious reasons.
deleted 14y ago
[deleted]
npcomplete 14y ago
You can save a bunch of fields in the form (and has nothing to do with fraud): 1. Given postal code, asking for city and state is pretty much useless. There is a unique mapping from postal code -> city, state. Maxmind used to have free db, but you can download it from geonames here: http://download.geonames.org/export/zip/ http://download.geonames.org/export/zip/ 2. You don't need to ask for card type given card number. Again, simple regex. Reference: http://stackoverflow.com/questions/72768/how-do-you-detect-credit-card-type-based-on-number http://stackoverflow.com/questions/72768/how-do-you-detect-c... 3. Only American Express supports name verification. Most other banks don't. So, asking name is pretty much useless. If you already have the customer name in you database, use that to fill them in. 4. Things like 'Company' are just not needed. 5. Phone verification is again something supported by very few banks. That just cut down 7 fields with no compromise on fraud. Also, any good payment processor will let you store card information (in a secure manner adhering to standards set by Visa, a.k.a being PCI complaint). So, you could just display the last four of the card along with card type and charge them at a later point of time (think Amazon checkout). So, payment forms need not be nearly as bad as the one pointed out in OP. But, sometime bad design choices and legacy thinking comes in way. I work for Balanced Payments. When we were PoundPay (previous avatar of our product), we used to serve the payment frame via iframe. Our form looked like this: http://imgur.com/wF2Z2qZ http://imgur.com/wF2Z2qZ It encapsulates lot of points I discussed earlier.
- rietta 14y ago
  It's not true that zip codes are unique to a particular city and state in the United States. Where I live, for instance, several couple of cities share the same post office - and thus zip code. It does cause confusion in some instances, especially with address verification. There have been times when I have had to put the wrong city in my address because of zip code enforcement. Fortunately, the post office does a pretty good job delivering anyway.
  - npcomplete 14y ago
    Good to know and thanks for the input. I would assume this is a corner case and does not represent a typical situation. In this case, one could just send in the zip code for avs match. AVS will return specific codes related to postal code match. Here gain there's a tradeoff, I don't see the point of compromising the UX for 99% to cover the 1% case.
theallan 14y ago
There is another reason as well - at least in the UK if you are VAT registered. You need to know if your customer is in the UK, EU or outside of the EU, and if they are a business or not (their own VAT registration number), so you know if you need to charge them VAT or not. When the tax man comes calling, you need accountability to ensure that you have been charging the correct amount to the correct people. Extremely frustrating for purchasers and sellers to need to provide and collect all of that information simply to accept a payment. Far too much friction.
- objclxt 14y ago
  Although you do need to know whether your customer is in the UK or not, you can collect that through the address. You don't need to know whether the customer is a business - if you're providing VAT receipts then the business in question can claim the VAT back anyway. Often people will deduct VAT at the point of sale for businesses as a convenience, but it's not mandatory or required.
tobyjsullivan 14y ago
Fraud is a huge motivation but one thing the article doesn't mention is sales tax. When I sell a product online, I need to charge sales tax if the customer lives in Canada, a different tax if the customer lives in my province, or no tax if the customer lives in another country. Therefore, I'm forced to ask for the customer's address just for this. That said, I can probably still avoid asking for a lot of the info but this requirement still increases the minimum set.
- sib 14y ago
  In the US, at least, there are many thousands of different geographically-based taxing jurisdictions, so you really do need to know the address, not just the ZIP code, in order to get it right.
knodi 14y ago
They're not complicated if done with little bit of common sense.
shurcooL 14y ago
My payment form[1] is relatively simple. [1] https://dl.dropbox.com/u/8554242/dmitri/pay.html https://dl.dropbox.com/u/8554242/dmitri/pay.html
Osiris 14y ago
I had a relatively simple payment form for a while, but I found I was being hit with a huge amount of fraud transactions and had to manually review each transaction at the end of each day to see if any looked suspicious and issue a refund. I switched to using MinFraud automatic fraud detection. Unfortunately, their system requires that the customer provide their country, city, and postal code. They run over a dozen different checks from IP address, proxy detection, distance from IP to provided ZIP code, etc. I haven't had a single chargeback since I started using it. For me, my product sells for $8 and a charge back is $15. For me it ended up worth while to implement the larger payment form in exchange for eliminating chargebacks. I really wish that payments could be made simpler, but that would require that processors do much more vigorous fraud checks and they don't have a financial incentive to do so (they make their normal fees from fraudulent transactions that aren't caught).
toomim 14y ago
Bitcoin.
pfredrich 14y ago
CSC is only one of many options to improve checkout conversion. There are many other ones that don't result in increased fraud exposure like: - Eliminate the concept of a shopping cart if you just sell one product - Don't force buyers to create an account - Don't ask for the same information twice like shipping and billing address (if you collect billing address, you shouldn't) - Combine first and last name into one field: name - Auto-complete address based on ZIP - Trust messaging Baymard has great recommendations based on their extensive studies: http://baymard.com/checkout-usability http://baymard.com/checkout-usability
bradgessler 14y ago
Don't forget, the amount of fraud that you need to worry about depends highly on the service or product you're selling. My company has only dealt with one fraudulent charge for $65 over the past 5 years of selling our product across a huge number of transactions. No thief in their right mind would want to steel a Software as a Service product like ours since you can't really resell it. If they were reselling it we'd quickly find out about it and disable the account. If we were selling hardware or an item that a thief could turn around and resell without any trace, we'd have to worry quite a bit more about fraud. I'd hate for somebody who is running a SaaS company to read this and implement some insane IP/Tor/blah fraud detection scheme when the nature of their product/transactions doesn't necessitate it.
maccman 14y ago
At Stripe, we've had to take a lot of these considerations into account when designing the Checkout. One particular bug-bear of mine is people disabling autocomplete on their credit-card forms. Turns out that modern browsers (e.g. Safari/Chrome) encrypt CC data on disk, and that it's entirely PCI compliant to turn on autocomplete. The only field we don't do so (and that the browser doesn't store) is the CVC field. Another tip is adding 'pattern="\d*"' to number/cvc/expiry inputs. That'll bring up a numeric keyboard in mobile browsers. Lastly we've open sourced a library that'll do a lot of the client side validation and credit card number formatting for you: https://github.com/stripe/jquery.payment https://github.com/stripe/jquery.payment
- j-m-o 14y ago
  I just implemented Stripe payments on my first side project [1], but the jquery payment plugin wasn't on the radar when I was building it. Are there any advantages to using it over the jquery validator as seen in one of Stripe's payment examples? [2]. By the way, getting everything up and running with Stripe was a dream, it's an amazing product. Great work. [1] http://www.tryringo.com http://www.tryringo.com [2] https://gist.github.com/boucher/1750368 https://gist.github.com/boucher/1750368
  - maccman 14y ago
    For validations there's not much point in using jQuery.payment over Stripe.js - they're practically the same. However, where the jQuery plugin really shines is with formatting the expiry and card inputs. Inputting a cc number in groups of 4 digits is much easier than a whole number munged together.
- nickpresta 14y ago
  Full disclosure: I work on the team that implemented this feature. On Wave Invoices [1] we try to make it ridiculously easy for people to get paid. As such, we have a very select number of fields that are mandatory and don't require things like address, country, province, phone number, etc. Here is an example: http://i.imgur.com/yqSUMNb.png http://i.imgur.com/yqSUMNb.png The payment amount is already filled in - set to the full amount of the invoice in question. The rest is relatively easy to fill out. We use the awesome jquery.payment [2] and Stripe.js [3] on this form so you get formatted input - like on the credit card number and expiry date - and inline validation. [1] https://www.waveapps.com/invoicing/ https://www.waveapps.com/invoicing/ [2] https://github.com/stripe/jquery.payment https://github.com/stripe/jquery.payment [3] https://stripe.com/docs/stripe.js https://stripe.com/docs/stripe.js
nawitus 14y ago
I don't understand why the merchant should pay the chargeback on fraud. Online payment works best by making electronic wire transfers. This is how payment normally works in Finland: you buy something, and at checkout click the logo of your bank. You're redirected to the bank's website where you login and accept the payment. Then you're redirected back to the website. That's quite similar to 'Verified by Visa' model, where the client has to accept the payment on Visa's website. Recurring billing (e.g. monthly payments) could be authorized once. If a customer's computer gets hacked and the access to the online bank gets compromised, then that situation should be dealth completely by the bank (in the same way it's being dealth even now). Merchants and online stores shouldn't have to worry about preventing fraud, that should be centralized and dealt by banks
- PeterisP 14y ago
  The answer to "I don't understand why the merchant should pay the chargeback on fraud." is very simple - [non-huge] merchants are presented with an offer they can't refuse: accept the rules as-is, or don't accept credit cards. For most global businesses accepting credit cards is better, since a significant portion of customers prefer cards for various reasons, including the ability to chargeback if they have a disagreement with the merchant. And wire transfers aren't a good option in many countries due to their cost - while they should cost a few cents or less (an order of magnitude less than CC processors charge), in many countries, including USA, wire transfers are rather expensive.
- devdas 14y ago
  Unless you are buying at a shop in a different country, in which case your bank isn't in the list of valid banks.
mduvall 14y ago
I'm not sure '40% higher conversion rates' means anything pertinent. If it directly correlates to a company's revenue, this is fantastic. However, if it also contributes to a higher fraudulent payment rate (say we are funding loans, or performing a transaction where payment fraud tends to be higher), it must be taken into consideration and weigh how much the company will pay for each individual customer support case versus revenue accrued from each conversion. That aside, customer data here is not only used for simply 'making the payment' as the writer says. This is a huge over-simplification of the problem, the payment gateway for the transaction to detect AVS and CVV is a /last ditch effort/ to catch fraud. The other fields could be used for other services that detect fraud such as ID Analytics, Experian, etc. and ultimately help mitigate credit and fraud risk for the company.
readme 14y ago
Um, the billing address you enter is often used to compare against the billing address on file with the CC company for security purposes. So you need the billing address, too. The security code wouldn't hurt, either.
- pfredrich 14y ago
  You don't need it. AVS checks numerical part only anyhow. Billing ZIP is more than enough.
  - robryan 14y ago
    Don't think that is true. Our gateway will report zip match or full address match.
    - pfredrich 14y ago
      http://en.wikipedia.org/wiki/Address_Verification_System http://en.wikipedia.org/wiki/Address_Verification_System "AVS verifies the numeric portions of a cardholder's billing address. For example, if the address is 101 Main Street, Highland, CA 92346, in the United States, AVS will check 101 and 92346. Sometimes AVS checks additional digits such as an apartment number, other times it does not..." They might call it 'full address', still it's just the numeric part.
      - robryan 14y ago
        Ah thanks. Thought it was doing more but for most cases that would be enough. Most fraud isn't very sophisticated so just the number and zip would be enough.
  - PeterisP 14y ago
    [edited] Apparently it does check only the numbers.
    - pfredrich 14y ago
Xymak1y 14y ago
I've never had to fill out 14 fields for payment. Ever. While I agree this might be too many fields, I very much doubt it's the standard practice.
EGreg 14y ago
This is all silly and retarded in my opinion. Consumer credit authentication is in the stone age. What happened to two factor authentication? If someone steals your social security number they can open accounts in your name. To stop it you have to call one of the credit bureaus and they will put an "alert" on your account together with a phone number. What most creditors do when they see this alert is call that phone number and make sure it's really you opening the account. Really? Why isn't that just the default? Are you opening credit accounts so often you are majorly inconvenienced to make sure someone verifies it's you by calling the number you selected? Similarly with credit cards. They could just text your phone to confirm that you really are about to purchase something. You could turn this off EXPLICITLY, and turn it back on when you lose your credit card. If everyone used "Verified By Visa" or PayPal oauth-type portals for payment, this wouldn't happen. When your bank password is compromised, you can just change it. To do this, you simply ask them to send you an authentication code at a previously supplied email address -- two factor authentication. But now it's too late, because anyone who accepts your credit card can steal it, and use it a year later. For that matter, why do we use Social Security Numbers and Credit Card Numbers for such important things? It's a relic of terrible one-factor authentication. That signature stripe was probably supposed to be used to match your signature that you sign the receipt with. Well, no one does that. All you have to do is go on the site, purchase something using two lines, and they text you on your phone. You can turn it off explicitly. Then the law and the liabilities can change with such merchants. Of course, this will take years.
- EGreg 14y ago
  In fact, why doesn't one of the credit card companies simply implement their Verified By Visa thing with two factor authentication, which you can turn off for merchants at whom you recently made physical purchases and previously used shipping addresses?
aoetr 14y ago
How about introducing "credit cards" implemented as smartcards with an USB plug (and maybe a microUSB one too for smartphones), an LCD display to show the charge amount, payee and a "pay" button? That would instantly make fraud impossible short of physical theft of the device.
ezioamf 14y ago
Credit card numbers are not something that you keep secret (you give it every time you use it). This is why you need that much "fraud" detection. So we need a better alternative to pay like PayWithMyBank (http://www.paywithmybank.com http://www.paywithmybank.com). You can try how it works at http://try.paywithmybank.com http://try.paywithmybank.com
knowaveragejoe 14y ago
While I largely agree with what is said here, the author highlights 131 characters like it's an absurd amount. That's not even a tweet.
- hcarvalhoalves 14y ago
  The problem is the number of fields. Usability shows the relation between number of fields x conversions follows a power law [1]. Aiming at 80% conversion, the threshold is between 3-7 fields. [1] http://en.wikipedia.org/wiki/Power_law http://en.wikipedia.org/wiki/Power_law
jules 14y ago
The reason why payment forms are so complicated is because the credit card model is completely broken. Instead of transferring money from your account to their account, you give the other person unlimited and irrevocable access to your account, and then that person takes the money. This is a hilariously stupid way to transfer money. Once they have your credit card number, they can continue to take as much money as they want. Even worse, if they lose the number to some attack, the attacker can take money. A much better system would be if you could get a temporary number where the merchant can withdraw exactly the amount you need to pay and no more. No charge-backs possible. That's not a problem since the reason we need charge-backs is to patch up the fact that people can randomly take money from you just by knowing the credit card number, which you need to send around to make payments. Even better is this. At checkout the merchant's site would redirect you to yourbank.com/makepayment?amount=X&target=themerchantsaccount. There you would log in (if you were not already logged in) and click confirm, and the bank would send the money to the merchant. Very user friendly and secure, and no chargebacks. In the Netherlands we have such a system, it's called iDEAL and pretty much all dutch e-commerce uses this. The nice thing is that if your bank is secure, it's secure. You are not relying on thousands of individual merchants implementing security correctly, and you are not relying on the merchant not being evil. Or bitcoin of course.
- deleted 14y ago
  [deleted]
- unclebucknasty 14y ago
  You nailed it. Some time ago, my Amex business card had a feature called Private Payments. Basically, whenever you wanted to make a purchase, you would generate a one-time use number that could be used in place of your actual number. Not sure why they did away with it, but I figured it either became a hassle for them to support it or someone figured out how to defraud it. The latter would be insanely ironic, of course. But, your point in general regarding the fact that divulging your info for one simple payment can expose you so horrendously is very true. Same with other info, like your SSN. Too much of our current approach to "security" is based on protecting access to informarion, which is the core problem. In my business, we work with a number of retailers, large and small. It is breath-taking how exposed and naive some of these guys are. And, they are handling personal info for millions of people. In general, we should have learned long ago that it is impossible to secure the data in all cases, so we need systems and processes that assume the data will fall into the wrong hands.
overshard 14y ago
So I recently went from one of these simple forms to a more complex one due to a client's request. I did this because his customers were complaining that they didn't understand why they didn't have to fill out all this information. Everyone else makes them fill it out and they thought it was an problem or scam of some sort. I implemented a full form asking for all their information and toss out everything during processing. It's a very silly thing but it makes customers feel better about the checkout process for some unknown reason to me...

245 points by brandonb 14y ago

Great article. I do think cutting out "account creation" is something to look at. My friend, Joe just launched a very easy to use check out procedure for his new start up - https://www.getphotogasm.com/ https://www.getphotogasm.com/. Great example.

brandonb 14y ago

I'm the OP. Let me know if any of you out there have questions! Or, better yet, experiences with simplifying payments on your site good or bad.

jevinskie 14y ago
How are you penalized if you don't collect the extra information (besides potentially higher rates as stated in the post)? Are there more frauds leading to chargebacks that may have been detected if the card merchant had more information?
- brandonb 14y ago
  If you were to use a really minimal payment form (number and expiration), it's likely that you'd get somewhat more chargebacks. However, you'd also get more revenue. Let's say your chargeback rate goes from 0.1% to 0.2%, but your conversion rate goes from 50% to 60%, then you come out way ahead. In our experience, you can stop most fraud without putting up roadblocks for your users. Every site is different, but to give an example, we were able detect 90% of fraud for a site with a huge fraud problem without requiring any extra verification from the users. The really key penalty to avoid is what is called an "excessive chargeback program," which usually triggers for chargeback rates that exceed 1%. You initially get a warning, and if you can't get your chargeback rate down, your payment processor has the right to shut you off. If you're in an excessive chargeback program, then I'd definitely recommend "playing it safe." But otherwise, I think slimming down your payment form and carefully measuring the effect on fraud is almost always a smart business move.
  - thedufer 14y ago
    > Let's say your chargeback rate goes from 0.1% to 0.2%, but your conversion rate goes from 50% to 60%, then you come out way ahead. No, you don't. You need more information about the transaction then that. What if your profit margin is 1%? Then you've come out even, because chargebacks cost you the full cost of an item, but an extra conversion only nets you the profit on that sale. Note: I assumed that the 0.1% and 50% to 60% were both percentages of potential sales, because it made the math easier. Otherwise, you have 20% x 1%=2% more profit and .2% x 120%-.1%=.14% more loss from chargebacks, so you have come out slightly ahead.
haroldu 14y ago
Doesn't Verified by Visa and SecurePay by Mastercard solve this problem? Whenever I enter a credit card I get asked to enter an online password as well. Of course, ideally every citizen would be able to sign anything with a public-private key pair, counter-signed by the state.
- jevinskie 14y ago
  I hated when Newegg started using Verified by Visa. The password requirements were so silly that I would always forget my password. I haven't been prompted to enter my VbV password at Newegg for some years.
- borlak 14y ago
  Verified by Visa is incredibly annoying to the consumer. I've abandoned payments because I forgot my password. Now I have it turned off completely.
  - retube 14y ago
    How do you turn it off?
    - borlak 14y ago
      I haven't had to use it in a long time so my memory is fuzzy...but last I remember, when the actual Verified by Visa form pops up, there is an option to disable it.
- jsnell 14y ago
  Verified by Visa is an extremely high friction mechanism. It requires registration the first time around for each CC, and also an extra password or some other authentication mechanism like a bank dongle. If significant people bounce off transactions due to needing to type in their address, or due to needing to flip over the credit card and read 3 numbers, I don't even dare to think of what the bounce rate is for these mechanisms. It's especially bad since just about no websites I ever buy anything from use VbV / SecurePay. That means that I don't remember the authentication secrets off the top of my head, so unless I'm at home will likely abort the extremely rare transactions that really require it. I've maybe needed VbV once in the last year, and had to try 3 cards before I found one that I could use on the spot.
annon 14y ago
The "40% higher conversion rates" for not requiring CVV is extremely suspect to me. Looking at the paper, it wasn't an A/B test, but comparing entire sites. There could be any number of variables causing a difference in conversion rates. On top of that, there is no published date, but it does mention May 2007 being in the future. Six years is an eternity in the ecommerce space, and I have a feeling people are more familiar with what the CVV code is and where it is located today.
- brandonb 14y ago
  You're right that it's not proper A/B test, so it may be a case that correlation doesn't imply causation. Unfortunately, there's not a lot of research published with rigorous A/B testing for this kind of thing. If any of you out there would like to run an A/B test (and have us help detect fraud if you're worried about increases there), I'd love to help!
  - boucher 14y ago
    Of course, any increase in conversion also needs to balance the increase in declines you'll see by not providing a security code.
- raverbashing 14y ago
  I think it's suspicious as well. Fine, here's the thing, if the person can't find the CVV in the card, I don't want his business. Period
mrb 14y ago
I have purchased stuff on sites that have greatly simplified their payment process to the point I did not need to type anything at all! I click "Checkout"; the site displays a QR code; I scan it with my smartphone, which decodes it and prompts "Send 0.123 BTC to xxx?"; and I click "OK". Done. This is how the purchasing experience looks like with Bitcoin which, for merchants, solves the fraud problem. Hence buyers do not need to give any billing information.
- pixl97 14y ago
  >Send 0.123 BTC to xxx How is 'xxx' determined? Looks like a great place to install malware that overtops the sites QR with its own and sends the payment off to the wrong place.
  - mrb 14y ago
    'xxx' is read from the QR code. The attack vector you mention is no different than malware that intercepts your credit card number when typing it in.

sawyer 14y ago

Hehe, I have a recent relevant experience with this topic: I just finished a simple gift certificate purchase page[1] for a client where I attempted to cut out all unnecessary details; the client's immediate response? "Looks good, but can we add some more fields like name, address, and security code to make it look more 'official'". Edit: I don't necessarily disagree with their intuition; I think some consumers might actually be suspicious of a sparse payment form but I don't have any hard data. [1] https://motorcycle.ctec.ca/gifts.html https://motorcycle.ctec.ca/gifts.html

jiggy2011 14y ago
How are you billing on that? Every payment gateway I have used requires at least postcode etc.

birken 14y ago

We at Thumbtack use a similarly simple form, and our chargeback rates are very small [although admittedly we aren't a particularly attractive candidate for fraud]. We also did see both conversion increases and frustration decreases when we switched to a simpler payment form. We do have one difference though (which I would call a simplication): For the expiration date, we just have input boxes for the person to enter it instead of a dropdown. Select boxes are great if a) You can pick a sane default and b) you don't have many options. For a CC form, both of these fail. You cannot set the default with anything better than random accuracy, and each box probably has at least 10 options. Additionally, the expiration date box says "2 - February". I have a lot of credit cards, and none of them say the name of the month on it, only the number. Why waste the space? The user just typed in their 16-digit credit card number, just pop them right into the expiration date input boxes for them to type in their month and year free-form. Don't make them put the credit card down, pick up the mouse, then have to navigate select boxes with tiny print.

pixl97 14y ago
>I have a lot of credit cards, and none of them say the name of the month on it, only the number. Why waste the space? Use a lot (more then your sample size) of different credit cards and you'll see some only have 'FEB' or others 'February' and no numerical month at all. Others have the year as '14' or '2014'. It would have been better if the card issuers decided on a standard quite some time ago.
- tikhonj 14y ago
  That strengthens the case for having the user type in the value rather than using a drop-down menu. That way you can do the heavy lifting of normalizing the format rather than forcing the user to do it in their head. This might seem really petty, but I'm always a little annoyed when I have to mentally convert the number on my credit card into a month. It always takes a moment to remember that 04 is March, or whatever. It's much easier just to type the value.
  - jacalata 14y ago

lucb1e 14y ago

Bitcoin's forms are easier :)

mjs 14y ago

I don't understand why, instead of adding extra fields to collect more information, the banks and credit card companies instead just added more digits to the original fields. So instead of a separate field for the security code, why not just append the security code (and the postcode, and the XXX, etc.) to the credit card number field? I always have to enter a bunch of information anyway, so why not let me enter it all in one go? (Better for copy and paste.) The way they're doing things at the moment is driving people to pay via PayPal, because PayPal requires--hey look!--a single string which they call a "password".

thecombjelly 14y ago
> why not just append the security code It may be an extra layer of protection related to getting the credit card number via seeing or taking a picture of the front of the card, having it on the back helps improve security from that aspect.
brandonb 14y ago
What makes the security code (CVV) different from just having more digits is that you (the site/merchant) not allowed to store it permanently in your database. You can keep it in-memory for up to 15 minutes while authorizing the transaction. That means in theory, if the merchant's credit card database gets hacked, the fraudsters will get access to the credit card numbers but not the CVV. In practice, the rules aren't obeyed as strictly as they might, so you can easily find credit cards with CVV on the black market.
- mjs 14y ago
  Even if the different fields have different security requirements, that doesn't seem to be a good reason to require them to be entered separately. I don't really care if someone mandates that digits 1-4 can be sent via email, digits 5-10 can be stored unencrypted, digits 11-16 must be encrypted, and digits 17-20 can never be stored at all. They're still just digits/bits of information, and I have to provide all of them almost all the time anyway. The one exception is when a retailer has saved my credit card number, in which case they might ask me for the CVV only. But I'd rather that they didn't save the card number at all! I have to look up the CVV and copy and paste it into their form every time anyway--so they may as well require the whole thing every time.

VengefulCynic 14y ago

Where companies like Sift interest me is moving from a place where a system determines whether or not it believes a charge is fraudulent to a place where you evaluate the likelihood that an individual transaction is fraudulent. And they're absolutely right that individual components are going to lead to tons of false positives and then eventual end-gaming of their countermeasures. As an example, in the implosion following the dot-com boom, it was almost impossible for denizens of many Eastern European and African countries to buy things online because the incidence of fraud attributed to their country was high enough that the fraud officers at many online retailers wouldn't chance it. I have a friend who lived in Romania who had a credit card that used my address in the US and frequently required me to ship stuff for him because no companies would ship directly to him. He loves the modern era of fraud evaluation, because while his country is weighted negatively, his use of a respected international bank, an IP address in the same area as his billing address and purchase history with many online companies has greatly reduced his level of hassle due to false positives alleging that he's a fraudster.

brandonb 14y ago
Definitely true. A lot of sites just block all transactions from, say, Africa when they start getting hit with fraud. But that's a very broad brush to paint with. It's better to use a machine learning system that looks at many signals so that people like your friend can shop online without being hassled.

raverbashing 14y ago

Here's a tip if you care at all for International payment: DON'T RELY ON ZIP CODE ALONE For one, you don't know the different formats of zip codes around the world Second: not all countries have Zip Codes. Like Ireland, for example. See here: http://www.google.ie/about/jobs/locations/dublin/ http://www.google.ie/about/jobs/locations/dublin/ "Dublin 4" is the "Zip code" About the issue of matching addresses, it seems that the payment processors can't do a fuzzy matching (not sure why), so if your address is "P Sherman 42 Wallaby Way Sydney" and you typed "42 P Sherman Wallaby Way Sydney" you're denied the transaction

deleted 14y ago
[deleted]

JoshTriplett 14y ago

Even if you do need to collect some of that information (such as the address if you need to ship a product), several of those fields still remain redundant. Notably, you should never ask for "credit card type"; the credit card number already tells you that. I like the forms that just ask for a credit card number and then show the computed card type's logo once you've filled it in. You can also automatically compute the city and state from the zip code, but that requires you to ask for the zip code first, which does break user expectations somewhat. And please, don't ask for "First Name" and "Last Name" unless you specifically need them separated for some reason; just ask for "Name".

jackseviltwin 14y ago
That's funny, we came to the same conclusions and implemented them for our checkout flow. Here's an example: http://crop.to/fW http://crop.to/fW Combining first/last name into a name field and auto-detecting card type were easy wins for the shopper, but in user testing, we found that detecting city/state from a zip code had some potential issues. First, the format of the form without city/state surprised some users. One user said something like "where do I put my city and state?" They ended up appending it to the street name. Then they filled in the zip code and saw that it fetched the city/state and then realized how it worked then went back to delete it from the street name field. Also, in the U.S., some zip codes can return multiple cities and states. Our solution was to populate a pull down of the possible values for both fields. It turns out there are small towns/cities that we didn't return from a zip lookup, so city had to be editable for these users. We added a "Let me type it in" option on the bottom of the city pulldown for those users, who are hopefully the minority.
- signed0 14y ago
  Perhaps having the user enter their location information in the order country, zip, city, state, street would provide a better experience. It's not what they would be used to, but it's at least consistant (information is entered from less precise to more precise). Having to build an additional "let me type it in" option seems like it increases the complexity and confusion. One of the banks I use asks for the zip first and then populates the city and state text fields on the lines below. This also has the benefit of working if Javascript is disabled.

UnoriginalGuy 14y ago

IP based "fraud" detection is fucking annoying. I live in the UK and want to have stuff shipped to family in the US. I've had vendors of all sizes turn away my business because either they didn't like my IP or wouldn't let international addresses order at all. Amazon(.com) has literally earned themselves thousands in additional sales because they happily accepted my UK payment to a US address without fuss or hassle. You might say this is a niche situation but money is money, and I've had lot's of small vendors lose out because they were "US only!" I now also have a "flower guy" because they're the only one in the city who will do international flower orders... PS - Specific example, NewEgg, wanted to buy a several hundred dollar laptop - couldn't. Used Amazon instead.

mrb 14y ago
Why do you think it is "IP based"? It sounds more like traditional fraud checks requiring the billing and shipping address to be located in the same country.
- jacalata 14y ago
  probably because of this quote: On the internet, everything is measurable, and fraudsters leave behind tracks they’re not even aware of. What IP address is the user coming from? edit: oh, you probably mean 'why do you think (random business) refusal is IP based'.
- matt_serelli 14y ago
  His example of NewEgg is a bad one. They straight up say they don't ship international orders on their FAQ page.
rwmj 14y ago
I hope that's not what the article is suggesting. The way I read it, it's more like what Google and Facebook do: very sophisticated tracking of multiple factors (your IP, geolocation, browser identity, second-factor, etc) to find out if it's really "you" logging in, or someone who's just got your password. The problems are: (1) This will never work for a single vendor (unless it's a massive vendor like Amazon, and they're already doing it). It's something the bank has to do so it can tie together all the information about you. (2) Banks have proven to be totally useless at online security in the past, and I don't see that changing any time soon. (3) Google-style security can be a bit annoying when you really are logging in from an internet cafe in a foreign country.

thecombjelly 14y ago

What works for one company may not be acceptable or optimal to other companies. I think the biggest insight is that you should measure these things and see what approach earns you the most money, taking chargebacks into account.

nirvdrum 14y ago

Most of these forms are more complicated because of tax codes and such. If I don't know your name or your address, I can't adequately assess whether I should be collecting sales tax. Failing to collect and report sales tax can come with very hefty fines. There's a whole bunch of other valid reasons too. If there's a problem, it's nice being able to actually contact your customer. Most businesses need to be able to produce receipts, with some data needed to even count as a receipt ("you were charged X on Y" via email -- which you may not have anyway -- usually doesn't cut it). And I'd love to see the data on this, but if someone has gotten to the point where they've decided to purchase and are presented with fields that are pretty standard just about everywhere else, I suspect abandonment rate is rather low. The pros just seem to outweigh the cons on this minimalism debate.

dave5104 14y ago
> I suspect abandonment rate is rather low. I'd say it depends on the situation. If you're shopping for something specific, say for a new hard drive or monitor or something, chances are you've been looking around for awhile and once you're in the checkout process, you've made up your mind to commit to that product. A few extra fields for payment data probably won't deter you. But on the opposite side of the spectrum, if someone is going to impulse buy, each field you force them to fill out gives them a few more seconds to decide "Eh, I don't really need this..." and abandon. In those cases, you want payments as frictionless as possible. I know I've done some impulse buys a few times after being drawn in via an email campaign or something--and subsequently decided to just forget about making the purchase.

tzaman 14y ago

Thanks for bringing the topic up, I always wondered why some sites ask me for only my ZIP next to the CC number, but never really got into finding out why.

cynwoody 14y ago
A few years ago, gas stations around here starting asking customers to enter their ZIP at the pump. Not long after they started doing that, many added a clarification: billing address ZIP, not residence ZIP. Apparently, some customers thought they were asking for market-research reasons, as opposed to credit card security.

stopcyring 14y ago

sigh, and where are you going to send your invoices to? or is your plan to issue invoices for the costumers ip's. I am sure the tax authorities will love that.

smiler 14y ago
Yes you're right - this post has no discussion of what governments might require of a business from a legal standpoint

ceautery 14y ago

The interchange fees Visa/MC charge vary with what information is collected. The minimum required info is assumed to be at a higher risk of fraud, so the fee passed to the merchant is more. Sure, some optimization can be done to make online forms easier to use, but collecting more information is necessary to offset the fact that you aren't physically in a store handing someone your card, letting them see the name on your driver's license, etc.

tobyjsullivan 14y ago
This leads to the question: Does the difference in processing fees outweigh the percentage of sales lost due to increased friction? This will have a different answer for every product and business which makes this a perfect example of something every company should be A/B testing.

smackfu 14y ago

This is why I will usually hit the Paypal link if available, because I don't have to enter anything.

nym 14y ago

A: Chargebacks If you don't want chargebacks, accept digital cash in addition to credit cards. Give your customers a discount for digital cash, and charge your price + (estimated cost of chargebacks/sales) for a given period. BitPay / Coinbase are probably your best options for accepting non-reversible digital cash.

mindslight 14y ago
That works for the current ecosystem. As it is non-anonymous, bitcoin will eventually become infected with chargebacks. For this process to begin, it just takes one sizable stolen-from party getting the ear of an exchange.
dminor 14y ago
Chargebacks are usually the result of fraud. Fraudsters don't use BitCoins for obvious reasons.

deleted 14y ago

[deleted]

npcomplete 14y ago

You can save a bunch of fields in the form (and has nothing to do with fraud): 1. Given postal code, asking for city and state is pretty much useless. There is a unique mapping from postal code -> city, state. Maxmind used to have free db, but you can download it from geonames here: http://download.geonames.org/export/zip/ http://download.geonames.org/export/zip/ 2. You don't need to ask for card type given card number. Again, simple regex. Reference: http://stackoverflow.com/questions/72768/how-do-you-detect-credit-card-type-based-on-number http://stackoverflow.com/questions/72768/how-do-you-detect-c... 3. Only American Express supports name verification. Most other banks don't. So, asking name is pretty much useless. If you already have the customer name in you database, use that to fill them in. 4. Things like 'Company' are just not needed. 5. Phone verification is again something supported by very few banks. That just cut down 7 fields with no compromise on fraud. Also, any good payment processor will let you store card information (in a secure manner adhering to standards set by Visa, a.k.a being PCI complaint). So, you could just display the last four of the card along with card type and charge them at a later point of time (think Amazon checkout). So, payment forms need not be nearly as bad as the one pointed out in OP. But, sometime bad design choices and legacy thinking comes in way. I work for Balanced Payments. When we were PoundPay (previous avatar of our product), we used to serve the payment frame via iframe. Our form looked like this: http://imgur.com/wF2Z2qZ http://imgur.com/wF2Z2qZ It encapsulates lot of points I discussed earlier.

rietta 14y ago
It's not true that zip codes are unique to a particular city and state in the United States. Where I live, for instance, several couple of cities share the same post office - and thus zip code. It does cause confusion in some instances, especially with address verification. There have been times when I have had to put the wrong city in my address because of zip code enforcement. Fortunately, the post office does a pretty good job delivering anyway.
- npcomplete 14y ago
  Good to know and thanks for the input. I would assume this is a corner case and does not represent a typical situation. In this case, one could just send in the zip code for avs match. AVS will return specific codes related to postal code match. Here gain there's a tradeoff, I don't see the point of compromising the UX for 99% to cover the 1% case.

theallan 14y ago

There is another reason as well - at least in the UK if you are VAT registered. You need to know if your customer is in the UK, EU or outside of the EU, and if they are a business or not (their own VAT registration number), so you know if you need to charge them VAT or not. When the tax man comes calling, you need accountability to ensure that you have been charging the correct amount to the correct people. Extremely frustrating for purchasers and sellers to need to provide and collect all of that information simply to accept a payment. Far too much friction.

objclxt 14y ago
Although you do need to know whether your customer is in the UK or not, you can collect that through the address. You don't need to know whether the customer is a business - if you're providing VAT receipts then the business in question can claim the VAT back anyway. Often people will deduct VAT at the point of sale for businesses as a convenience, but it's not mandatory or required.

tobyjsullivan 14y ago

Fraud is a huge motivation but one thing the article doesn't mention is sales tax. When I sell a product online, I need to charge sales tax if the customer lives in Canada, a different tax if the customer lives in my province, or no tax if the customer lives in another country. Therefore, I'm forced to ask for the customer's address just for this. That said, I can probably still avoid asking for a lot of the info but this requirement still increases the minimum set.

sib 14y ago
In the US, at least, there are many thousands of different geographically-based taxing jurisdictions, so you really do need to know the address, not just the ZIP code, in order to get it right.

knodi 14y ago

They're not complicated if done with little bit of common sense.

shurcooL 14y ago

My payment form[1] is relatively simple. [1] https://dl.dropbox.com/u/8554242/dmitri/pay.html https://dl.dropbox.com/u/8554242/dmitri/pay.html

Osiris 14y ago

I had a relatively simple payment form for a while, but I found I was being hit with a huge amount of fraud transactions and had to manually review each transaction at the end of each day to see if any looked suspicious and issue a refund. I switched to using MinFraud automatic fraud detection. Unfortunately, their system requires that the customer provide their country, city, and postal code. They run over a dozen different checks from IP address, proxy detection, distance from IP to provided ZIP code, etc. I haven't had a single chargeback since I started using it. For me, my product sells for $8 and a charge back is $15. For me it ended up worth while to implement the larger payment form in exchange for eliminating chargebacks. I really wish that payments could be made simpler, but that would require that processors do much more vigorous fraud checks and they don't have a financial incentive to do so (they make their normal fees from fraudulent transactions that aren't caught).

toomim 14y ago

Bitcoin.

pfredrich 14y ago

CSC is only one of many options to improve checkout conversion. There are many other ones that don't result in increased fraud exposure like: - Eliminate the concept of a shopping cart if you just sell one product - Don't force buyers to create an account - Don't ask for the same information twice like shipping and billing address (if you collect billing address, you shouldn't) - Combine first and last name into one field: name - Auto-complete address based on ZIP - Trust messaging Baymard has great recommendations based on their extensive studies: http://baymard.com/checkout-usability http://baymard.com/checkout-usability

bradgessler 14y ago

Don't forget, the amount of fraud that you need to worry about depends highly on the service or product you're selling. My company has only dealt with one fraudulent charge for $65 over the past 5 years of selling our product across a huge number of transactions. No thief in their right mind would want to steel a Software as a Service product like ours since you can't really resell it. If they were reselling it we'd quickly find out about it and disable the account. If we were selling hardware or an item that a thief could turn around and resell without any trace, we'd have to worry quite a bit more about fraud. I'd hate for somebody who is running a SaaS company to read this and implement some insane IP/Tor/blah fraud detection scheme when the nature of their product/transactions doesn't necessitate it.

maccman 14y ago

At Stripe, we've had to take a lot of these considerations into account when designing the Checkout. One particular bug-bear of mine is people disabling autocomplete on their credit-card forms. Turns out that modern browsers (e.g. Safari/Chrome) encrypt CC data on disk, and that it's entirely PCI compliant to turn on autocomplete. The only field we don't do so (and that the browser doesn't store) is the CVC field. Another tip is adding 'pattern="\d*"' to number/cvc/expiry inputs. That'll bring up a numeric keyboard in mobile browsers. Lastly we've open sourced a library that'll do a lot of the client side validation and credit card number formatting for you: https://github.com/stripe/jquery.payment https://github.com/stripe/jquery.payment

j-m-o 14y ago
I just implemented Stripe payments on my first side project [1], but the jquery payment plugin wasn't on the radar when I was building it. Are there any advantages to using it over the jquery validator as seen in one of Stripe's payment examples? [2]. By the way, getting everything up and running with Stripe was a dream, it's an amazing product. Great work. [1] http://www.tryringo.com http://www.tryringo.com [2] https://gist.github.com/boucher/1750368 https://gist.github.com/boucher/1750368
- maccman 14y ago
  For validations there's not much point in using jQuery.payment over Stripe.js - they're practically the same. However, where the jQuery plugin really shines is with formatting the expiry and card inputs. Inputting a cc number in groups of 4 digits is much easier than a whole number munged together.
nickpresta 14y ago
Full disclosure: I work on the team that implemented this feature. On Wave Invoices [1] we try to make it ridiculously easy for people to get paid. As such, we have a very select number of fields that are mandatory and don't require things like address, country, province, phone number, etc. Here is an example: http://i.imgur.com/yqSUMNb.png http://i.imgur.com/yqSUMNb.png The payment amount is already filled in - set to the full amount of the invoice in question. The rest is relatively easy to fill out. We use the awesome jquery.payment [2] and Stripe.js [3] on this form so you get formatted input - like on the credit card number and expiry date - and inline validation. [1] https://www.waveapps.com/invoicing/ https://www.waveapps.com/invoicing/ [2] https://github.com/stripe/jquery.payment https://github.com/stripe/jquery.payment [3] https://stripe.com/docs/stripe.js https://stripe.com/docs/stripe.js

nawitus 14y ago

I don't understand why the merchant should pay the chargeback on fraud. Online payment works best by making electronic wire transfers. This is how payment normally works in Finland: you buy something, and at checkout click the logo of your bank. You're redirected to the bank's website where you login and accept the payment. Then you're redirected back to the website. That's quite similar to 'Verified by Visa' model, where the client has to accept the payment on Visa's website. Recurring billing (e.g. monthly payments) could be authorized once. If a customer's computer gets hacked and the access to the online bank gets compromised, then that situation should be dealth completely by the bank (in the same way it's being dealth even now). Merchants and online stores shouldn't have to worry about preventing fraud, that should be centralized and dealt by banks

PeterisP 14y ago
The answer to "I don't understand why the merchant should pay the chargeback on fraud." is very simple - [non-huge] merchants are presented with an offer they can't refuse: accept the rules as-is, or don't accept credit cards. For most global businesses accepting credit cards is better, since a significant portion of customers prefer cards for various reasons, including the ability to chargeback if they have a disagreement with the merchant. And wire transfers aren't a good option in many countries due to their cost - while they should cost a few cents or less (an order of magnitude less than CC processors charge), in many countries, including USA, wire transfers are rather expensive.
devdas 14y ago
Unless you are buying at a shop in a different country, in which case your bank isn't in the list of valid banks.

mduvall 14y ago

I'm not sure '40% higher conversion rates' means anything pertinent. If it directly correlates to a company's revenue, this is fantastic. However, if it also contributes to a higher fraudulent payment rate (say we are funding loans, or performing a transaction where payment fraud tends to be higher), it must be taken into consideration and weigh how much the company will pay for each individual customer support case versus revenue accrued from each conversion. That aside, customer data here is not only used for simply 'making the payment' as the writer says. This is a huge over-simplification of the problem, the payment gateway for the transaction to detect AVS and CVV is a /last ditch effort/ to catch fraud. The other fields could be used for other services that detect fraud such as ID Analytics, Experian, etc. and ultimately help mitigate credit and fraud risk for the company.

readme 14y ago

Um, the billing address you enter is often used to compare against the billing address on file with the CC company for security purposes. So you need the billing address, too. The security code wouldn't hurt, either.

pfredrich 14y ago
You don't need it. AVS checks numerical part only anyhow. Billing ZIP is more than enough.
- robryan 14y ago
  Don't think that is true. Our gateway will report zip match or full address match.
  - pfredrich 14y ago
    http://en.wikipedia.org/wiki/Address_Verification_System http://en.wikipedia.org/wiki/Address_Verification_System "AVS verifies the numeric portions of a cardholder's billing address. For example, if the address is 101 Main Street, Highland, CA 92346, in the United States, AVS will check 101 and 92346. Sometimes AVS checks additional digits such as an apartment number, other times it does not..." They might call it 'full address', still it's just the numeric part.
    - robryan 14y ago
      Ah thanks. Thought it was doing more but for most cases that would be enough. Most fraud isn't very sophisticated so just the number and zip would be enough.
- PeterisP 14y ago
  [edited] Apparently it does check only the numbers.
  - pfredrich 14y ago

Xymak1y 14y ago

I've never had to fill out 14 fields for payment. Ever. While I agree this might be too many fields, I very much doubt it's the standard practice.

EGreg 14y ago

This is all silly and retarded in my opinion. Consumer credit authentication is in the stone age. What happened to two factor authentication? If someone steals your social security number they can open accounts in your name. To stop it you have to call one of the credit bureaus and they will put an "alert" on your account together with a phone number. What most creditors do when they see this alert is call that phone number and make sure it's really you opening the account. Really? Why isn't that just the default? Are you opening credit accounts so often you are majorly inconvenienced to make sure someone verifies it's you by calling the number you selected? Similarly with credit cards. They could just text your phone to confirm that you really are about to purchase something. You could turn this off EXPLICITLY, and turn it back on when you lose your credit card. If everyone used "Verified By Visa" or PayPal oauth-type portals for payment, this wouldn't happen. When your bank password is compromised, you can just change it. To do this, you simply ask them to send you an authentication code at a previously supplied email address -- two factor authentication. But now it's too late, because anyone who accepts your credit card can steal it, and use it a year later. For that matter, why do we use Social Security Numbers and Credit Card Numbers for such important things? It's a relic of terrible one-factor authentication. That signature stripe was probably supposed to be used to match your signature that you sign the receipt with. Well, no one does that. All you have to do is go on the site, purchase something using two lines, and they text you on your phone. You can turn it off explicitly. Then the law and the liabilities can change with such merchants. Of course, this will take years.

EGreg 14y ago
In fact, why doesn't one of the credit card companies simply implement their Verified By Visa thing with two factor authentication, which you can turn off for merchants at whom you recently made physical purchases and previously used shipping addresses?

aoetr 14y ago

How about introducing "credit cards" implemented as smartcards with an USB plug (and maybe a microUSB one too for smartphones), an LCD display to show the charge amount, payee and a "pay" button? That would instantly make fraud impossible short of physical theft of the device.

ezioamf 14y ago

Credit card numbers are not something that you keep secret (you give it every time you use it). This is why you need that much "fraud" detection. So we need a better alternative to pay like PayWithMyBank (http://www.paywithmybank.com http://www.paywithmybank.com). You can try how it works at http://try.paywithmybank.com http://try.paywithmybank.com

knowaveragejoe 14y ago

While I largely agree with what is said here, the author highlights 131 characters like it's an absurd amount. That's not even a tweet.

hcarvalhoalves 14y ago
The problem is the number of fields. Usability shows the relation between number of fields x conversions follows a power law [1]. Aiming at 80% conversion, the threshold is between 3-7 fields. [1] http://en.wikipedia.org/wiki/Power_law http://en.wikipedia.org/wiki/Power_law

jules 14y ago

The reason why payment forms are so complicated is because the credit card model is completely broken. Instead of transferring money from your account to their account, you give the other person unlimited and irrevocable access to your account, and then that person takes the money. This is a hilariously stupid way to transfer money. Once they have your credit card number, they can continue to take as much money as they want. Even worse, if they lose the number to some attack, the attacker can take money. A much better system would be if you could get a temporary number where the merchant can withdraw exactly the amount you need to pay and no more. No charge-backs possible. That's not a problem since the reason we need charge-backs is to patch up the fact that people can randomly take money from you just by knowing the credit card number, which you need to send around to make payments. Even better is this. At checkout the merchant's site would redirect you to yourbank.com/makepayment?amount=X&target=themerchantsaccount. There you would log in (if you were not already logged in) and click confirm, and the bank would send the money to the merchant. Very user friendly and secure, and no chargebacks. In the Netherlands we have such a system, it's called iDEAL and pretty much all dutch e-commerce uses this. The nice thing is that if your bank is secure, it's secure. You are not relying on thousands of individual merchants implementing security correctly, and you are not relying on the merchant not being evil. Or bitcoin of course.

deleted 14y ago
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unclebucknasty 14y ago
You nailed it. Some time ago, my Amex business card had a feature called Private Payments. Basically, whenever you wanted to make a purchase, you would generate a one-time use number that could be used in place of your actual number. Not sure why they did away with it, but I figured it either became a hassle for them to support it or someone figured out how to defraud it. The latter would be insanely ironic, of course. But, your point in general regarding the fact that divulging your info for one simple payment can expose you so horrendously is very true. Same with other info, like your SSN. Too much of our current approach to "security" is based on protecting access to informarion, which is the core problem. In my business, we work with a number of retailers, large and small. It is breath-taking how exposed and naive some of these guys are. And, they are handling personal info for millions of people. In general, we should have learned long ago that it is impossible to secure the data in all cases, so we need systems and processes that assume the data will fall into the wrong hands.

overshard 14y ago

So I recently went from one of these simple forms to a more complex one due to a client's request. I did this because his customers were complaining that they didn't understand why they didn't have to fill out all this information. Everyone else makes them fill it out and they thought it was an problem or scam of some sort. I implemented a full form asking for all their information and toss out everything during processing. It's a very silly thing but it makes customers feel better about the checkout process for some unknown reason to me...