Selecting The Best Payment Processor
With the global pandemic, people have changed their outlook about paying for products and services. A lot of payments, even those offline and brick, and mortar businesses, have been happening with the use of credit cards and other non-contact payments. If you’ve just started a recurring business online, the payment processor selection is probably one of the biggest concerns to think about.
But with so many services available in the market, which one will you choose for your payment processing company that's best for your business and your customer's experience?
What is a Payment Processor anyway?
Imagine having a service and a website where you offer your services. So then you would need an efficient collection of payments where clients can self serve. It would take so long to accept checks or bank transfers. So a payment processor is a company that handles your payments from your clients. It handles transactions between two parties, such as you, the merchant, and a customer. It gathers the payment information from a non-contact form of payment, such as the customer’s credit card, and transfers them to the merchant’s preferred bank account.
For most transactions, even though it is quick by today’s standards, it takes a lot of steps before the money ends up in the business’s bank account. From the customer, the customer’s bank/credit card company goes through the business website, then handled by the payment processor and payment gateway, then ultimately your bank.
Things to consider when choosing a Payment Processor
As a digital entrepreneur, you’ll have to understand that choosing a payment processor is not solely a decision for the finance department. Payment significantly impacts the user experience, and choosing the wrong option could negatively affect your conversions.
Apart from the overall user experience, as a business owner, you will also need to consider the types of payments a processor accepts. The fees should be acceptable, and the platforms available for customers’ payment. Check if it’s available on a mobile app and, most importantly, the type of support they have for clients.
What about security?
With the upsurge of online payment card transactions, every year around the world—which The Nilson Report estimates will expand to 515.42 billion by 2024—getting a secure, flexible payment gateway is very important for online entrepreneurs.
But as transactions increase, more hacking, phishing, and various scams make a daily presence known in the news worldwide. Hackers are having a field day with small e-commerce sites and even attacks major brick-and-mortar businesses. The stakes are high for both the entrepreneurs and payment processors if they get hacked, resulting in data exposure and loss of money. Fortunately, there are cost-effective solutions for e-commerce businesses wanting to offer the convenience of debit and credit card payments without putting their customers’ banking info at risk and losing their trust.
Not all card payment gateways are created equal when it comes to the security, convenience, and flexibility that your company needs to support e-commerce activity. What works best for your company depends on your customers and your platform; whether you want to offer buyers security, a no-fee experience, or you want to be able to instantly convert currency will influence your gateway decisions.
However, since there are hundreds of payment processing options, here are 5 of the most common Payment Processor that most Gravy users have.
There isn’t such a thing as a “one-size-fits-all” payment processor for online retailers. However, Stripe gets awfully close, thanks to being a customizable payment solution.
Stripe was designed for developers who can then tinker with its APIs to create the product that best suits their needs. Stripe allows you to accept credit cards, debit cards, and bitcoin payments from more than 130 different currencies. There’s also flexible billing and a modest 2.9 percent + 30¢ per successful card charge.
For businesses looking for a low-volume payment processor, PayPal has proven to be an excellent entry solution and a solid choice since it debuted in 1998. On top of having budget-friendly prices, PayPal operates in more than 200 countries and 26 currencies and allows users to integrate PayPal checkout on their websites, process payments through a browser, app, or reader, and extend credit to customers.
Due offers an end-to-end service that encompasses the entire billing and payment process for freelancers, small business owners, and companies. Besides offering time tracking, project management, and customized online invoicing options, the company recognizes that your business may cross the globe.
The invoicing and payment processing features include more than 100 languages, currencies, tax systems, and international credit card processing.
Square gives you the power to accept payments wherever you are, thanks to innovative products like its magstripe reader, contactless + chip reader, and stand that converts your mobile device into a one-of-a-kind payment processor.
Square is also customizable, which means that it has solutions for many businesses, including everything from restaurants to beauty professionals to transportation companies to professional services.
Tracking Your transactions
Whether you accept payments through one channel or many, having robust, detailed reporting in one centralized location is essential to your business. Only a select group of payment processors allow you to track your transactions from inception to settlement because they are the gateway provider and processor all in one.
A payment gateway sends credit card transactions to the credit card payment networks for processing. Processors that offer reporting application programming interfaces (APIs) will allow you to see whatever information is passed through on any transaction and customized for your specific needs.
Do you use a specific accounting, ERP, or CRM software system to manage your practice? Payment processors may offer plugins or APIs to integrate payment processing into your software seamlessly. By processing from one single interface, you will save time and money, reduce double-data entry errors, and simplify the reconciliation process.
How Gravy can help
Sometimes as it happens, these APIs go beyond our technical know-how. As a beginning digital entrepreneur, it can be a little intimidating, especially when you’re still building a team to monitor payments. After performing triage on 5.3M failed payments, we have found that most payment processors rarely present a good, coherent, and understandable quick view of your current payments. How much revenue is your stripe account losing without you knowing it? If you are wondering how your business is doing with churn and lost revenue, you can learn about your churn on our free Lost Revenue Analysis based on your Stripe data.
As you can see, there are several factors to consider when choosing a payment processor for a merchant account. Be sure to research each of the above items before entering into a relationship with a new processor or renewing your current provider’s agreement.
Doing your homework will ensure that you receive the lowest rates, the most secure, reliable system, and the integrated, robust reporting needed to keep your practice on track and make your life easier.
This article is part of a series of articles for entrepreneurs wanting to start a recurring revenue business. Check the links below to check the series!
- How To Start Your Recurring Revenue Business
- Building Your Website and Pricing Your Product
- Marketing Techniques For A Gravylicious Brand
- Selecting The Best Payment Processor