How can you handle EFT payment exceptions?
EFT, or electronic funds transfer, is a convenient and fast way to send and receive money electronically. However, sometimes things can go wrong and you may encounter payment exceptions, such as errors, delays, rejections, or returns. How can you handle these situations effectively and avoid unnecessary costs and risks? Here are some tips and best practices to follow.
To handle EFT payment exceptions, it is important to understand the different types and causes of them. Examples include invalid account numbers or routing numbers, insufficient funds or overdrafts, duplicate or incorrect amounts, unauthorized or fraudulent transactions, technical or system failures, and regulatory or compliance issues. Each type of exception may have its own fees, penalties, chargebacks, disputes, or legal actions associated with it. It is essential to be able to identify and categorize them correctly.
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When we say exceptions in EFT payments, it usually means anything causing a dispute to begin with, and also transaction declines. Disputes arise due to card or account is debited (charged) for transaction and fulfillment either did not happen at all or partly happened. Simplest is ATM cash withdrawal for which many times the card/account gets debited (money deducted) but cash did not come out or it came out short compared to transaction amount. Another easy example is merchant informed cardholder that transaction did not get through, but it actually got through and approval response did not reach to merchant; result in goods / services were not provided but card/account was debited (money deducted). Declines are narrated in main article.
The second step to handle EFT payment exceptions is to monitor and track your transactions regularly and proactively. To do this, you can use online banking or payment platforms, EFT reports and statements, reconciliation software or services, and alerts and notifications. By keeping an eye on your transactions, you can catch any exceptions quickly and take the necessary steps to address them. Furthermore, you can spot any patterns or trends that may be causing issues and take preventative measures to reduce the likelihood of future exceptions.
The third step to handle EFT payment exceptions is to ensure compliance and maintain good relationships with customers, vendors, and partners by following the rules and procedures established by your bank, payment provider, and industry standards. These may include deadlines and timeframes for submitting, correcting, or canceling transactions; formats and requirements for data and documents; processes and channels for communication and escalation; as well as policies and guidelines for dispute resolution and liability. By adhering to these regulations, you can avoid any violations or fines.
The fourth step to handle EFT payment exceptions is to educate and communicate with your stakeholders, such as customers, employees, and vendors. To do this effectively, provide clear and accurate information and instructions on how to use EFT services, as well as best practices and tips on how to prevent or minimize exceptions. Additionally, inform them of any changes or updates in the EFT rules or systems, and respond promptly and professionally to any inquiries or complaints. Ultimately, by educating and communicating with your stakeholders, you can improve customer satisfaction and loyalty, operational efficiency and quality, while also reducing errors and disputes.
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This is an extremely important aspect. A common mistake in EFT business is that business units think this is a technical expertise, and technology people only focus on system part without feeling the 'heat' of money. Educating, regularly communicating, and keeping motivated to Finance department is utmost important. Also keeping aware and enough motivated to other business units using value proposition importance of EFT monitoring and tracking for their area.
The fifth step to handle EFT payment exceptions is to review and improve your EFT processes periodically and continuously. To do this, you can analyze your EFT data and metrics to measure performance and identify gaps or opportunities. Additionally, it is beneficial to seek feedback and suggestions from stakeholders on how to improve your EFT services. Implementing changes or enhancements to your EFT systems, workflows, or controls, as well as testing and evaluating the results and impacts of them, can also be useful. By reviewing and improving your EFT processes, you can optimize operations and outcomes, and reduce the frequency and severity of exceptions. In conclusion, EFT payment exceptions can be challenging and costly, but they can also be managed and mitigated by following these steps.
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(a) Establishing strong lines of communication and collaboration with banking institutions has been crucial in efficiently resolving EFT exceptions. In my experience, working closely with banks on EFT processing error codes has expedited the resolution process. For a major retail client, regular alignment meetings with their banking partners led a streamlined workflow for addressing EFT exceptions, cutting down resolution times over 50% (b) Application of predictive analytics to monitor EFT transactions has improved the preemptive identification of potential exceptions. By analysing transaction patterns and historical exception data, predictive models can flag transactions that deviate from the norm, allowing for early intervention