Your payment solution has the power to make or break your business, despite the fact that it may appear like a fundamental service. Regardless of the effort and financial investment you make in your products, website, and branding, a subpar checkout process might result in a low conversion rate.

Payment service providers enable your company to take payments through a range of payment options, such as bank transfers, digital wallets, debit cards, and credit cards. Payment service providers are sometimes also called merchant service providers.

You will require a complete payment infrastructure, comprising a merchant account, payment gateway, and payment processing services, in order to receive payments. All of these components are delivered and managed by a payment service provider, allowing you to immediately begin collecting payments. There’s no need to register for each of these services individually.

To put it simply, a payment service provider ensures that transactions may be completed. They are involved from the time a customer decides to start a sale and enter their card information until you get the money.

What Are the Benefits of Working with a Payment Service Provider?

Accepting several payment methods is made simple for you by payment service providers. You are free to select the ways you wish to accept from the provider. The supplier then incorporates those payment options—such as digital wallets, debit cards, and credit cards—with your company. None of the technical work requires you to perform it alone.

Collaborating with a payment service provider also provides you with the guarantee of safe transactions. Although every business is unique, some providers tokenize credit card information while it’s being transmitted, ensuring that private payment information is never stored by the system.

They adhere to industry standards to guarantee secure transactions and enable additional security features like two-factor authentication. Payment processors won’t start transferring money until they’ve confirmed a customer’s card information and made sure there are enough funds in their account. This might help your firm avoid any fraud.

You can bill your consumers with the help of payment service providers. You can set up a checkout page on your website or send invoices directly to your clients via your payment solution. Depending on your supplier, you might be able to charge them in person by accepting a physical payment method like cash or a card, or you might be able to manually enter payment information into the system.

How to Choose the Right Payment Solution for Your Business

1. Ease of Set Up

Your business already operates by using a variety of technology and tools, like a web host and content management system. Your payment solution should easily integrate with your existing setup. 

If you’re just starting out, you’ll want a strong payment solution with a prebuilt checkout page you can customize without coding experience. If you already have a website, the payment solution should offer the option to use code to embed hosted payment fields into your site or app via robust APIs. 

Regardless of which option you choose, the payment solution should make getting set up simple and straightforward.

2. A Variety of Payment Methods

Customers want to have options in terms of payment methods. While credit and debit cards still account for close to half of all payments, many people now use alternative payment methods, like digital wallets, buy-now, pay-later options, and bank transfers. If you don’t offer enough payment methods, you could lose sales.

Your payment service provider should make it easy to accept all kinds of payment methods. The provider should offer a wide selection of payment methods and allow you to easily add them to your checkout process, whether through your website or through payment links. 

3. Security Features

Fraudulent transactions can impact both the customer and your business. As a business owner, it’s your job to put systems in place to protect private information. You’ve likely already taken steps to accomplish this, like putting a firewall in place.

Your payment service provider can also offer some protections, so you don’t have to take care of payment security yourself. A strong solution should have security measures in place, including PCI DSS (Payment Card Industry Data Security Standard) compliance. 

Additionally, it should tokenize or encrypt payment details so that if a hacker did get in, they couldn’t access payment details. 

A solution with strong security measures will also support 3DS2 (3D Secure 2.0). This adds another layer of authentication. If a customer makes a purchase that meets certain criteria set by the credit card companies, like transaction size or location, the system will ask them to confirm their identity via a code sent to their phone or email. 

4. Global Network and Currencies

One of the many benefits of selling your products or services online is that you can connect with customers all around the world. That means unlimited sales potential. However, you’ll need to make sure your payment solution allows you to sell worldwide.

Your payment solution must enable cross-border transactions with a global payment network. Plus, it will need to allow you to settle transactions with multiple currencies and handle foreign exchange rates. Some payment solutions can even help you minimize conversion costs and currency realization costs.

5. Transparent Fee Structure

Payment service providers usually have a tiered pricing structure or flat-rate, per-transaction fees. Flat-rate structures are typically best, as tiered pricing can often have hidden fees that arise when you go over your allotted transactions. With flat-rate fees, you know exactly what you’ll pay each month. 

Read Also: The Future of Payment Solutions: Emerging Trends and Technologies

Your solution provider should allow you to easily track your usage. They should be transparent so that you never have a nasty surprise bill.

How to Determine the Right Payment Solutions for Your Business

Below, we’ll give you step-by-step instructions to determine the right payment solutions for your business.

Step 1: Determine What Types of Payments You Want to Accept

As you’ve probably gathered, there are more payment options available than ever before. You can help figure out which ones you want to accept based on your business model and your customer base.

For example, if you collect payments outside of your office (at a tradeshow, convention, health screening, etc.), then you’ll need a mobile payment solution. Being able to collect payments over the phone or via text helps streamline the collections process and take the headache out of chasing debt.

Similarly, if you have a younger clientele, mobile payments can help set you apart. 65% of millennials have used mobile payments, compared to just 42% of the general population. As a reminder, mobile payments are when your customers pay you using their mobile phones, not a physical credit card.

As smartphones reach near 100% penetration and people are increasingly wary of carrying cash and cards, mobile payments are going to see ever-increasing adoption rates.

The bottom line here is that you should strongly consider mobile payments and evaluate whether they’re a good fit for your business.

Step 2: Consider Your Long-Term Needs

Often, small business owners fall into the trap of fulfilling their immediate needs without considering how their needs will evolve in the future.

Will you be adding a subscription service that requires recurring payments? Do you plan on having field employees that can accept payments on the road? Will you be unveiling a product at a tradeshow that you’d also like to sell on-site?

Think about where your business will be three to five years from now and tailor your payment solutions to fit the future needs of your organization.

Step 3: Look for a Payment Provider with Advanced Security

Hackers are getting smarter, bolder, and more ambitious. It seems like as soon as one type of security is developed, criminals find a vulnerability and exploit it. Even if you’re not ultra-technical, you can still ask the right questions. This step is extremely important because choosing a payment provider without the proper security protocols can be destructive to your business.

Your payment provider should be PCI-compliant. Short for Payment Card Industry, PCI compliance outlines a set of procedures that a company must meet to ensure that they’re protecting customer data. Specifically, your payment provider should use the following technologies:

•  Tokenization: This process converts credit card numbers and other sensitive information into a token, which substitutes the original data and uses this instead, almost like a secret code.
• Point-to-point encryption: Abbreviated as P2PE, point-to-point encryption requires that customer data is immediately encrypted at your business’s POS (point-of-sale) terminal and must remain encrypted until it reaches the payment processor. This security measure protects data while it’s in transit.
• Fraud management tools: In addition to proactively protecting your data, your payment processor should also help detect fraud and alert you when it occurs. Examples include flagging a transaction where the credit card swipe occurred far from the billing address, a transaction that’s larger than normal, comparing CVVs (card verification values), blocking multiple attempts to make payments in rapid-fire sequence.

Step 4: Compare Payment Processing Fees

You have a lot of choices when it comes to payment solutions, and many companies are likely to compete for your business.

While you shouldn’t make a decision based on cost alone, you should have an idea of what your total bill will be and what factors can cause it to rise.

We encourage you to look at a few payment providers and evaluate the following:

• Transaction fees: What percentage of each transaction do you have to pay? Is there also a flat fee per transaction in addition to the rate? Are the fees refunded if you refund a payment?
• Upfront and leased cost for equipment: Do you have to purchase or lease equipment to get started? How much is it, and how often does it need to be replaced? Who is responsible for repairs?
• Penalties for exceeding daily or monthly quotas for the volume of transactions: Do you have a monthly limit on either the number or total dollar volume of your transactions before you get locked out of your system? What are the fees associated with these penalties?
• Penalties for not meeting a monthly quota: Conversely, do you get charged if you don’t have a minimum number of transactions?

Step 5: Ensure Access to Five-Star Customer Support

If you need support after hours, is it available? If your business operates outside of the traditional nine-to-five culture, then having access to 24/7 support is vital. We also recommend inquiring about support communication channels. Will you be able to speak to a customer support representative on the phone, or is all communication conducted via email or online chat?

There’s not a right or wrong answer here, but you should ensure that the support hours and channels are compatible with your schedule and communication preferences.

Step 6: Look for Systems that Offer Payment Integration

Ideally, you’ll be able to sync incoming transactions with the tools your business already uses. As you compare payment providers and processors, visit their website or contact their customer support team to find out which companies their platform integrates with.

When your payment solution integrates with other parts of your business, you’ll be better equipped to customize the user experience while helping to increase the efficiency of your team.

If there are no current integrations or the integrations don’t match your suite of tools, consider inquiring about whether they have a flexible or open API (application programming interface). If so, then you can work with a developer to program the integrations you need.

Step 7: Consider Recurring Billing

If you bill clients at regular intervals, then you should be able to receive payments automatically from customers on a subscription plan or an auto-debit program. Ideally, your system should also do some level of automated follow-up to attempt to collect failed payments.

Bottom Line

The list above can help you make sure that your chosen payment solution has all the essential elements to support the expansion of your business. To put it briefly, your payment service provider should be easy to integrate with your current website, offer a variety of payment methods, facilitate secure transactions, enable cross-border sales, and ensure that there is never any confusion regarding your bill. Selecting the correct payment solution can make all the difference in your business.