OPINION: The hidden payments issue costing local businesses money

WALK down any main street in regional Australia and you’ll find small businesses doing what they do best: serving their communities with pride, hard work, and a personal touch.

Gloucester is no exception.

Businesses in our town thrive on trust, the kind that comes from knowing the people behind the counter.

But there’s a growing issue quietly affecting many small businesses, here and across the country.

It’s not rising costs, staffing shortages, or competition from online giants.

It’s something far less visible yet surprisingly damaging.

Sometimes, customers don’t recognise the business name that appears on their bank statement.

It sounds trivial. It isn’t.

Unclear or unfamiliar billing descriptors (the short line of text that identifies a business on a cardholder’s statement) are one of the biggest drivers of unnecessary disputes.

For small businesses, those disputes translate into lost revenue, wasted time, and strained customer relationships. Industry data shows that 35 percent of all card transaction disputes occur simply because the customer doesn’t recognise the merchant’s name.

Worse still, 85 percent of customers go straight to their bank to complain when they don’t recognise a charge.

What begins as confusion quickly becomes a formal dispute, complete with fees and administrative headaches.

These aren’t fraud cases.

They’re misunderstandings and they’re entirely preventable.

When a customer disputes a charge, the business is hit with more than inconvenience.

Chargebacks come with fees, and even when the business successfully defends the transaction, the time spent gathering evidence and responding to the bank is time taken away from serving customers.

Repeated disputes can also affect a business’s risk rating with its bank or payments provider, leading to higher fees or stricter monitoring.

But perhaps the most damaging consequence is the erosion of trust all because the name on their statement didn’t match the name on the shopfront.

Businesses don’t intentionally choose confusing billing descriptors.

Often the descriptor defaults to a legal entity name, an abbreviation, or a generic label from the payment provider. In a world where customers skim their statements quickly, clarity matters.
The good news is that it’s easy to fix.

A clear descriptor should use the trading name and correct location that customers recognise.

Avoid abbreviations and match what appears on receipts, signage, websites, and booking confirmations.

Since moving to Gloucester, I’ve noticed a handful of local businesses whose billing descriptors don’t match the names customers see on their shopfronts or websites.

It’s a common oversight, but fixing it can reduce disputes, protect revenue, and strengthen customer trust.

If you’re a business owner, take a moment to check how your business name appears on a customer’s bank statement. It’s a five‑minute task that could save you hours of dispute management and fees.

By Steven WHYBROW, FinTech and payments innovation consultant