When the science fiction writer Arthur C. Clarke said, “Any sufficiently advanced technology is indistinguishable from magic,” he may very well have had payment processing in mind.
To the untrained eye, having a customer who swipes, inserts, or taps a credit card at a terminal and seeing the funds from a transaction land in your bank account can seem magical. It is even more miraculous when a customer enters their credit card information online, and you get a deposit into your account soon.
Behind the scenes, a lot is going on. Several layers of transaction data get transferred between payment gateways, credit card networks, issuing banks, and payment processors in mere seconds. And because most business owners are (rightly) focused on running their companies, they might not put much thought into how payments are being processed and who’s processing them.
As a result, a business owner may opt for the first solution they see without considering whether it’s the best payment processor for their needs. In this brief guide, we’ll shed some light on how to find a trustworthy payment processor that’s best suited to your company.
A payment processor is a key player in facilitating credit card transactions. To be able to accept credit and debit cards from your customers online, over the phone, or at a point of sale (POS) system, you’ll need a payment processor to make transactions happen.
Forward-thinking organizations see the role of the payment processor as similar to that of a partner because payment processors can end up saving businesses money while streamlining finance and operations departments.
In addition to helping to facilitate financial transactions, payment processors may also supply the machines and other necessary equipment to give merchants the ability to accept credit card payments.
Finding a payment processor can be overwhelming if you don’t know what to look for. We recommend evaluating the following seven factors during your research.
Different payment processors will equip you with the ability to accept a variety of payments. The payments that you should prioritize will depend on what your customers’ expectations are. Various options include:
If you have international customers, make sure your payment processor can accept global payments as well.
Cybercrime is on the rise, making a payment processor’s security features more relevant than ever. At a minimum, a trustworthy payment processor should offer data encryption and intelligent rules for detecting fraud.
For example, for every online transaction, there should be checks in place to verify the buyer’s location and IP address, as well as CVV verification. Short for “Card Verification Value,” CVV verification is an added layer of protection to ensure that the customer has a physical copy of the card in their possession when making a purchase.
It’s also a good idea to ensure that any potential payment processor is PCI compliant. Credit card companies set this compliance standard to help protect them from fraud. Though any payment processor with their salt will be able to claim PCI compliance, it’s a critical minimum threshold to verify.
Many payment processors offer their clients tools to make running their business easier. Check for features like generating email invoices and whether payments are linked to your bookkeeping software.
The pace of innovation can make keeping up with technology a challenge. However, it is your payment processor’s responsibility to ensure that they implement the latest innovations to improve your ability to collect payments continuously.
For example, some payment processors have been slow to adapt equipment that provides contactless payment options or digital wallets.
If these features are essential to you or ensure that your payment processing partner is in touch with technological trends, make sure you ask about how they stay up to date.
The price differences between payment processors can vary widely. And, assuming your goal is to keep more money in your pocket, the amount that a payment process charges is probably extremely important.
When comparing the fee structures among payment processors, there are a few things to consider. The first, and perhaps most significant, is the transaction fees.
Typically, you’ll want an interchange-plus fee structure, though this is not always the case. With this pricing model, you pay a transaction cost set by the banks and credit card companies combined with a markup that’s pre-determined by your payment processor. There are, of course, other pricing models, including flat-fee and subscription models.
In addition to transaction fees, there could be charges for signing up, equipment, or ongoing subscriptions. As you evaluate your options, make sure you’re comparing apples to apples. One way to do this is to make a list of your transactions from an average month and ask a payment processor bidding for your business how much you’d pay in fees.
Before signing an agreement or committing, make sure you understand the terms and read any fine print!
If you have a problem or need help, will your payment processor be there for you? Will you be able to reach a human, or will you be stuck in an endless loop of automated messages?
For many merchants, top-tier customer support is non-negotiable. If you fall into this camp, don’t forget to find out how this department will handle any issues you encounter before you commit to a contract.
One of the best ways to determine whether you’re working with a trustworthy payment processor is to read customer reviews. Check the company’s Facebook page, Google My Business profile, and the Better Business Bureau (BBB).
You can also request references and interview other merchants to inquire about their experience.
Ready to learn more about Accredited Interchange? We are a trustworthy payment processing company committed to providing our partners with a solution that fits their needs. We’re happy to answer any questions you have and provide a custom, in-depth savings analysis.