The Covid-19 pandemic created an increased demand for contactless payment systems. For businesses, this meant accepting Apple Pay and Google Pay. Google Pay absorbed Android Pay and Google Wallet in 2018 making it the preferred contactless payment method for many Android users.
Users fund Google Pay transactions with their debit and credit cards. While this makes the setup and usage easier, it also means transactions are subject to regular chargeback rules.Â
Merchants can leverage the demand for touchless payments to attract and retain customers. But this should be with the understanding of how Google Pay systems prevent fraud and handle disputes and chargebacks.
Here's a breakdown of what to expect.
Google Pay is a digital wallet tied to Google accounts. Users can send and receive money using their debit or credit card details and make online or physical transactions.
For the latter, Google Pay uses near-field communication (NFC) technology to complete transactions. Buyers hold their phones close to NFC-enabled merchant terminals, and the transaction is completed wirelessly.
When a transaction is initiated, Google Pay generates and transmits a virtual account number to the merchant’s terminal to process and complete the payment.
When making an online purchase, Google Pay is available as a checkout option like PayPal and debit or credit cards. The customer logs in to authorize payment, and checkout proceeds normally.
Google Pay uses state-of-the-art security protocols that keep customer data safe from hackers, fraudsters, and unethical merchants.
When a user attempts to add a debit/credit card to their Google Pay account, Google initiates an identity and verification (ID&V) process that verifies their identity using a one-time password sent through an SMS or email.
Moreover, it stores encrypted payment details on Google servers. Though they cannot guarantee safety and protection from a breach, Google spares no resources to uphold Google Pay’s integrity.
To authorize transactions users must log into their phone and then into Google Pay app. This makes it difficult for fraudsters to authorize transactions from stolen phones or by accident.
Finally, since merchant terminals receive one-time virtual account numbers, customer payment details are protected from cloning and fraud.
For the most part, Google Pay plays a role similar to a merchant’s payment service provider when it comes to handling chargebacks.
When a customer files a dispute claim with their issuing bank, the bank contacts the card network, which gets in touch with Google Pay. Google Pay informs the merchant of the chargeback and requests supporting documentation deliverable within a specified deadline.
After receiving the documentation, Google Pay reviews it. If they believe the merchant’s claim holds water, they’ll present the evidence to the issuer, who’ll issue the final verdict.
If Google Pay doesn’t think the merchant claim has merit, they’ll pay the customer and debit the merchant's account. Google Pay will also take from the merchant a chargeback fee.
Fighting chargebacks on Google Pay payments is a little harder because little customer information is gathered. Most banks interpret the lack of CVV information or address verification in evidence submission as a sign that the customer’s fraud claim is true.
Google Pay’s chargeback process isn't proprietary and hence simple to follow. Merchants can avoid chargebacks through Google Pay by obtaining delivery confirmation and tracking numbers, documenting communication with their customers, and clearly stipulating their terms of purchase before finalizing the sale.
Moreover, fast response to Google Pay’s chargeback notification helps as it provides them with more time to review and represent you. Unfortunately, keeping tabs on all Google Pay notifications is easier said than done.
For more information on handling your Google Pay chargebacks, contact us at Justt.
