Finding a payment processor is an important step in allowing customers to pay for products and services they buy from your company. At this step, it can be tempting to pick the lowest bidder. However, this can present many problems later. Here, we will explain how to choose a payment processor, starting with what a payment processor does, and then working through various factors to consider, to help you make the best decision.
What Does a Payment Processor Do?
A payment processor does the work of authorizing and processing payments you receive from customers. A multi-phased process involves verifying the customer’s billing information, ensuring enough funds are available to make the purchase, and approving each transaction. Funds are transferred to your merchant account and then to your bank. An encrypted server is used to complete these steps, securing sensitive bank account or credit card details.
How to Choose the Right Payment Processor
Whether you want to offer in-store customers more payment options or run an e-commerce website, establishing a relationship with a payment processor is a critical step. Some of the strategic considerations you need to think about include:
Some vendors charge higher fees for the most current features, so it’s important to shop around. Expect to pay a set-up fee and monthly fees thereafter; equipment fees may also apply. Transaction and credit card processor fees recur over time. Every time someone pays with a card, you can be charged an interchange fee from the customer’s bank, an assessment from a credit card company (as a pre-negotiated percentage), and a markup or fee that the payment processor charges.
Including data analytics may sound like upselling, but this is an important feature that helps you understand your business. It lets you track every transaction and visualize information in graphs and charts. You can track revenue and even the performance of certain products, as well as loyalty programs and customer activity throughout the year. The insights you get on your target audience can help make better business decisions.
More and more people are looking to pay with their mobile devices, whether remotely or in stores. Smartphones allow tap-to-pay systems, while customers can scan QR codes at cash registers. Point-of-sale terminals are quickly being replaced by wireless equipment. It’s therefore beneficial for any retailer, even a brick-and-mortar store, to support mobile payments.
A secure system protects against fraudulent transactions, further enhancing customers’ trust in your company. Your business is protected against fraud with the latest security technologies. This doesn’t require investing in security infrastructure; the merchant services provider handles this for you, as their platform must comply with the Payment Card Industry Data Security Standard (PCI DSS).
Customers should have the option to pay with cash, a credit or debit card, and other electronic payment options such as PayPal Credit, Google Pay, or Amazon Pay. This allows you to serve a broader consumer base and gives your customers convenient options, so they feel like your business is taking steps to accommodate them.
Knowing what to look for in a payment processor can take the fear out of finding one. That is why you should look for a provider that offers all of the above plus setup and support assistance for any sales transaction issues that occur. The company should also be transparent about its per-transaction rate and all fees charged.
Other considerations you want to think about include:
- The types of currencies that you want to support, so you can reach customers in other countries.
- Convenience, such as whether phone payments, recurring payments, and subscriptions are supported.
- A simple user interface, so customers aren’t confused about the checkout process; for example, if you accept Amazon Payments, you should use an interface that mimics the Amazon shopping experience.
- A cross-platform mobile commerce solution to avoid development issues that can impact functionality.
Do You Need a Payment Processor for In-Store or Online Transactions?
You’ll run into fewer headaches if you know the types of transactions the payment processor supports. Do your research ahead of time and ask whether the provider offers POS systems that support credit or debit cards, contactless payments, mobile wallets, etc. If you have an e-commerce store, see that it accepts credit/debit transactions quickly and has all the safety protocols in place.
What Type of Business Are You Running?
Depending on the payment processor, its services may be more suited for a B2B company, in which invoices are sent directly to clients. For this, the provider must support the wiring of money over the internet. However, most processors accommodate B2C companies. They are more known for their monthly and transaction fees. Consider sales volume as well; transaction fees tend to be less with higher transaction rates.
Is your business considered a high-risk merchant? Payment processors run credit checks and view tax information to assess the risk of their clients. Businesses in some industries are more prone to chargebacks and fraud, so they’re charged higher fees and must agree to longer contract terms. Business owners with a limited time in operation, a history of chargebacks, and/or poor credit are also likely to be assigned to a higher risk category.
What Payment Processing Solution Do You Need?
Adept Payments provides small businesses with credit card payment processing services and solutions. We offer payment options supporting credit cards and all types of electronic transactions. Taking the uncertainty out of how to choose a payment processor, our team is committed to making payment processing simple. Several options are available to accommodate your business, capture your desired customer, and ensure things run smoothly, at the best rates in the industry. Request a free rate quote or call 888-732-3838 today.