How to Choose the Best Payment Processor

Choosing a payment processor is a financially critical business decision, whether you are in the B2B or the retail space. This decision determines how you are paid for the goods and services you offer and the cost of processing these payments. At first it may seem all payment processors are created equal, and each would likely provide well-priced and efficient services. But just like in every industry, there are differences among the various payment processors competing for your business.

We’ve prepared an overview of the issues and questions you should keep in mind as you select, or decide to change, your payment processor.

1. First Things First: Determine Your Needs

The first thing you need to do is understand how you are accepting payments:

• In person (retail) via swiped, tap-and-pay and chip-and-pin
• Card not present, meaning over the phone, on file or keyed in
• eCommerce via online

Most payment processors present themselves as offering the best advantages and features. They often say things like, “We know what you need in a processor!” or “We offer the best prices!” They also say, “We offer the best services to you and your customers!” or “Pick us!” Despite best price or service, you still have to determine what sort of gateway integration you’re looking for, what variety of payment options you want to provide, and the type and level of security your business requires. Don’t be fooled by low advertised rates or one-off promotions, because every payment processor offers similar tactics.

2. Assess These Things Before You Decide On Your Processor.

It may seem like a long list, but it’s better to consider these things before — not after you choose:

Your Hardware

Depending on the size of your business, you may be able to get by with Mobile Point of Sale technology (mPOS). As you grow, or if you make a considerable number of B2B transactions, you will likely want to explore the need for traditional card readers, different types of terminals, receipt printers, and many other things. Assess your current needs, but don’t forget your potential future needs.

Although pricing is not the only thing to consider, you should be comfortable with the fees you are being charged for processing payments. If the information is confusing, if the numbers and charges are hard to navigate, or if you find any hidden fees after thoroughly reading of your contract, you should certainly pause before choosing a particular payment processor, and ask the appropriate questions. If your concerns are not addressed in a direct, concise way, keep looking for a payment processor until you receive clear and honest answers everyone deserves.

PCI Compliance
Is your payment processor PCI-compliant? If you’ve read our other posts, you know making sure both your business and payment processor are PCI-compliant is step one. It’s as simple as that. Start there.

Your Inventory
Do you sell products? If you do, your inventory must be constantly monitored. Make sure you implement a system that helps you manage this data – each and every transaction. If you need adaptable tracking and analytics, make sure they are part of your package.

Your Customers
You’ll likely need to track and monitor the activities of your customers, especially if you have loyalty plans, subscriptions or gift cards.
Once again, pick a system that helps you track this data.

Exchanges and Returns
Make sure the system helps you manage returns, exchanges and chargebacks. These can take up a lot of your staff’s time, and can cause you problems if your system — or your payment processor — doesn’t handle them efficiently.

3. Price Should Not Be Your Only Consideration

Price per service offered is very important, but the overall price presented by your payment processor should not be your deciding factor. If you are like most businesses, you will likely need to get up and running quickly. Yet, it’s important you make sure your processor can handle your anticipated needs, as well as your future needs: in six months, in one year, etc. Pick a payment processor who is willing to talk with you, so they understand your business and its unique needs.

They should listen carefully and answers your questions. You may be the expert in your chosen field, but it’s likely you’re not the expert in processing payments made to your company. No question you ask of a potential payment processor is silly—it’s your money and your future you are asking about, so do not accept short or canned answers, sophisticated language, or anyone who does not take you and your specific needs seriously.

To find a great payment processor, ask them to take a look at your current statements, and determine how and where they can offer you better value. Trust us; other questions will emerge out of this step.

4. Does the Payment Processor Understand Your Business?

Make sure any processor you interview or research has an understanding of what it is you do. Check any reviews the payment processor may have received online. Are they negative? Positive? Make sure you understand the processor you choose, and they understand you and your business.

5. Read the Fine Print

After you’ve been dazzled by the bright lights and smiling faces offering you special deals, special rates and special security features, it is essential you read the fine print. The best way to start is to make a list of what you are looking for, even if it’s not a complete list. Do you offer a loyalty program, gift cards, subscription services or shopping carts? If so, make sure your payment processor can service those elements of your business.

If you already accept payment by credit card, you may be examining the fine print in your current monthly statements to see if you’re getting the best price for service, the most up-to-date safety and security technology, and the best services you will be needing as you expand your business. The problem is, the fine print often appears on your monthly statements, and the fine print relating to “special” offers is often extremely detailed and complex.

Read every phrase. Be clear on exactly what is being offered and how long the “special” price will last, and verify whether hidden fees may be lurking behind all the financial jargon.
Feeling overwhelmed by these complex documents? Merchant Broker can help you navigate them.

6. Are They Serving You Well?

Does the payment processor you are considering have a single point of contact who can answer all your questions and concerns, and all your payment processing needs? Make sure they have a live attendant and not just a call-in number to lead you to these types of recordings: “If you are a business, press 7. If you are calling about chargebacks, press 9.” Also, ask them if you can you reach them 24/7. When you do reach them, make sure they are efficient, courteous and willing to understand what your concern is, even if you may not be familiar with the industry jargon they use. If you need a bilingual service, are they able to provide that? These are very important considerations. Your payment processor is essentially the lifeline to your business, so it’s crucial that you are able to get problems resolved quickly.

7. What Is the Contract Duration, and Is There a Cancellation or Early Termination Fee?

Most payment processors insist on contracts with predetermined lengths.
If you’re just starting out, and not quite sure what the future holds for your business, a shorter contract may be best for you. If you are switching processors, or are comfortable with a longer term, make sure you understand the duration of the contract. And don’t forget: the duration of the contract is a point you can negotiate on. The payment processor wants your business; use that to your advantage. Some processors penalize businesses for cancelling contracts before the stated term has expired. This is standard practice, which is quite reasonable; but the cancellation fee should not be significant (no more than a few hundred dollars).

Next Steps

Now that you know what should be considered before choosing a payment processor, should you need some more support, we are here to help.

Remember: It’s your money they’re processing, so make sure they do so to your satisfaction, consistent with your requirements. No matter whose payment processing services you are currently using, or who you are thinking of working with, we can improve the relationship.

At Merchant Broker, if we cannot increase your bottom line, you pay nothing.


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