The past few days have been particularly difficult for membership platform Patreon as it battled two payment issues that have subsequently cancelled subscriptions and halted payouts to its creators.
Last week, creators started posting about their difficulties in receiving their payouts via the platform. Simultaneously, Patreon subscribers began receiving notices from their banks, indicating that their payments were being flagged as fraudulent. One creator reported losing hundreds of subscribers because of the issue.
Patreon has been addressing both issues. A required update with their payment processing partners had changed the billing location to Dublin, changing the bank statement descriptors. The company told Engadget that it does not anticipate the flagged payments problem to be a prolonged issue.
Excessive Payment Friction Will Drive Customers Away
Businesses looking to thrive in this ultra-competitive environment must find ways to streamline their payment processes by investing in solutions that would make payments faster, more secure, and reliable.
Excessive friction in payments can drive even the most patient customer away, but that said, some friction is necessary. The right type of friction can still prevent fraud, while still facilitating faster payments. The key is striking the right balance between mitigating fraud and delivering an exceptional customer experience.
According to a recent PaymentsJournal article, strong authentication can help mitigate fraud by making it increasingly difficult for hackers to steal sensitive data. Companies can use multifactor authentication where a customer provides a password and a one-time code is sent to their phone. Businesses must also ensure their payment system solutions are up to date, in addition to being secure.
