It’s rare to find a one-size-fits-all solution for anything in business, let alone payment processing.
Each business has its own unique business model, pain points and selling proposition. So why would you consider a one-size-fits-all solution for payment processing?
The answer is because there are plenty of cookie cutter payment processors out there, all boasting low rates. Low rates can be great, but that shouldn’t be the only criterion against which you choose a payment processor. The payment processor you choose is one of the most important aspects of your business, because it will be tightly coupled with user experience for your online business. A poor user experience can have a detrimental impact on conversions and subsequently, on your bottom line.
Choosing a payment processor should be about finding a customized payment processing solution for the unique needs of your business.
This is particularly important if your business follows a recurring payments or subscription business model. Businesses will have differing billing cycles and cancellation policies, so you’ll need a higher degree of automation. Plus, unlike one-off purchases type businesses, you’ll have to keep your customer’s sensitive data on file. This creates additional challenges when it comes to fraud prevention and data security.
5 Questions for Customized Payment Processing
Here are the 5 questions you should be asking yourself before selecting a payment processor.
#1: What is the payment gateway like?
Are there multiple connectivity options? Can you log in via a secure payment page, virtual terminal or API? Is the gateway compatible with multiple currency settings? Is the interface clunky or easy to navigate?
These are all important questions to ask and consider before making a decision. Additionally, you should find out of the processor offers customer support for any issues you may run into during integration or throughout your lifetime. Overall, you should be able to integrate, test and even customize your payment environment with minimal fuss.
#2: What is the fraud-detection system like?
Card-not-present (CNP) fraud is no joke. CNP fraud losses account for over half of total fraud losses in the U.S. and those losses are growing globally – exceeding $5.65 billion in 2015 worldwide.
Different businesses have different fraud protection needs. Find a payment processor that can offer a variety of fraud protection tools and help you tailor them to the unique requirements of your business. Effective fraud prevention requires finding the right balance – a tall order that most merchants have a hard time filling on their own. Too little fraud control and fraudsters will poke holes in your revenue streams; too much control and you will see revenue evaporate into thin air. Other fraud prevention ponts you may want to talk to payment processors about include:
- Point-to-point encryption
- EMV processing capabilities
- Velocity filters.
#3: What tracking tools and reporting features do they offer?
At the most basic level, your payment processor helps you process payments securely and efficiently. But there is no reason to settle for that. The ideal payment processor will have tools that will give you total visibility over all the metrics you need to better manage and plan for your business.
Will the metrics provided be able to help you project cash flow or track sales by geographical region? These reporting tools should also be flexible and be able to quickly provide you with specific information for a specific business decision, with as little extraneous information as possible.
#4: Are the total amount of fees presented upfront?
Sure, that payment processor might have the lowest rates you’ve ever seen. Here’s the thing though; payment processors typically charge different rates based on different factors such as type of credit cards, or online transactions versus physical card swiping. The lowest rate you see advertised is referred to as the ‘qualified’ rate; make sure that it actually applies to you before signing up.
You also have to watch out for hidden fees, which can include fees for exceeding maximum monthly quotes, not meeting minimum monthly quotas, or early termination penalties. Take all of these into account and don’t be lured in by the first low fee number you see.
#5: Can they accommodate your business’ future growth?
Your payment processor may be able to cater to your business needs now, but what about in the future? Your payment processor’s API should already be able to integrate a wide range of payment processing capabilities into its platform and maybe even alternative payment methods such as BitCoin. Remember, you want to choose a payment processor that you can stick with for the long haul.
You don’t run a cookie cutter business, so why should you settle for cookie cutter payment processing? Choosing the right customized payment processing solution that’s right for your business will do more than just process your payments. Fraud protection, data security, tracking and reporting tools, and payment methods are all factors that need to be customized specifically for your business. Not only will it help protect your bottom line, it will also set you up for future success.