Have you ever wondered if your business has the right payment service provider? You may think you are paying fees that are too high. Perhaps you worry that not enough people trust the company you have chosen and it is losing you customers. Even if you have had the same provider for some time, looking around can be beneficial. Below, we discuss choosing the right payment provider for your business. 

What is a payment service provider?

A payment service provider is a company that allows businesses to take electronic payments. These are usually through credit and debit cards. They can provide the service through a point-of-sale terminal in a store, or they may have online payment gateways. The choice of payment providers is vast. It is estimated that there are over 600 worldwide and over 300 in Europe alone.

What do payment service providers do?

Payment service providers have several functions. These can include processing, currency exchange and security against fraudulent transactions. The main jobs of a provider are listed below.

Gateways and processing

This is the most important service they provide. They will supply a gateway with which customers can pay. This is connected to a website, app or inventory. Once the secure transmission of this financial information is made, a sale is complete.

However, the processor will work behind the scenes to clear and authorise transactions. This will begin when they contact a bank or card issuer to verify the information. When authorised, it will switch the funds from a customer account to that of the business. They must also be able to deal with a range of payment situations. For example, the processing of online gift cards is now growing in popularity. These could include anything from free visa gift card prizes to ones bought for gaming networks.  

Security

The payment processor's reputation will hang on its security measures. Its processes and internal systems must comply with global security standards. This reduces data leaks and hacks of personal information. It must also play an active part in monitoring fraudulent transactions. Thus, not only does it have to have a secure system but it must actively look for threats in real-time.

Currency Conversion

In the global online economy, converting currency is vital. Customers may wish to pay in their currency, which the processor must convert. This allows businesses to trade in different currencies while using their preferred ones. 

Customer Service

Like any business, payment processors must have great customer service. When dealing with payments and sensitive information this becomes even more important. Downtime on payments can mean a loss of income, so payment processors must be able to deal with any issues quickly. 

What to look at when finding a provider

When finding a provider, there are several factors to consider. What may be right for one business may not be ideal for another. Therefore, consider the impact and value of each area on your company.

Scalability

As your business grows, you need to know the provider can grow with you. Check they can deal with the increased volumes of traffic you are aiming for. Some providers may even have added features for customers who scale up to certain levels. 
 
You should also check the payment provider accepts a wide range of payment methods. For example, you may need specialist ways to take cryptocurrencies and have to look for methods of accepting them. 

Fees

These are often the make-and-break factor for many companies. Fees can include transaction fees, set-up costs, monthly fees and chargeback fees for transactions. These can quickly total up. Some fees will impact businesses more than others, for instance, if you are selling large quantities of low-priced items transaction costs can soon make an impact. 

Customer Support 

A customer support team that gets issues resolved quickly, almost immediately, is vital. You will be able to check the reviews online. Customer service needs to be highly rated for both merchants and customers alike. 

Security

There are several security measures you should look for in a payment provider. These include tokenization, encryption, data security and fraud prevention. You should check they adhere to the Payment Card Industry Data Security Standard (PCI DSS)

What is a merchant account?

A merchant account is similar to a payment provider. However, instead of being run by a third party, it is operated by a bank or financial institution. They generally involve a more stringent acceptance process which goes into the business's credit history and risk levels. The payoff is that they often have lower transaction fees.
 
Another consideration to make is that some businesses are considered high-risk and may not be accepted by many payment processors. While these can include businesses you would expect, some may surprise you. It is usually based on the level of returns the company gets, so even some furniture sales companies may find themselves penalized. 
 
Using the information above you should be able to find the right processor. Check your business needs and cross-reference them against the information provided by the processor.