How To Choose The Right Payment Processor For An Ecommerce Business

• By Aaron Smith
• 31-08-2022
• E-commerce

A payment processor authorizes payments and transfers them from a payment gateway to a business bank account. Business owners have several responsibilities and priorities, especially when it comes to financial transactions. With an abundance of payment processing services available on the market, choosing the right one may seem like a daunting task.

There are a few things to consider when choosing a payment processor that suits the needs of a company and its audience. Read on to find out what they are.

Security
The most important factor to consider when choosing a payment processing service is the security that it provides. What kind of fraud protection services do they offer? Do they encrypt customers’ payment details?

Opting for a payment processor that has a rigorous fraud screening system in place is ideal to maintain privacy for the business and consumer. People are more inclined to buy when they feel like their money and information will be safe-guarded.

Costs
Keeping overhead costs at a minimum is a priority for any business in order to maximize profit, but the cheapest option isn’t always the most useful. Wherever payment processing is concerned, keep in mind these inevitable fees: monthly, processing, markup, interchange, and assessment.

There is typically a monthly fee to use the payment processing service. Additionally, there is a processing fee charged by the processor, a markup fee charged by the merchant bank, an interchange fee charged by the buyer’s bank, and an assessment fee charged by the credit card issuer. Consider these fees when deciding on an affordable yet effective payment processor.

Options
Different buyers have different preferences when it comes to making payments, which are often influenced by how they carry currency and what feels most secure for them. Meeting customers where they’re at by offering them an array of payment options can help increase sales.

Some may prefer to use credit or debit cards, while others may appreciate an eCheck option being available to them. A business that sells high-value products or services may choose to offer a Buy Now, Pay Later (BNPL) option to make items more affordable to potential customers. Research options that suit a large demographic and also the needs of the business.

Type of Business
The nature of the business may influence the type of payment processor chosen. For example, a business that offers mostly services may choose to bill clients by using invoices. Depending on the invoice provider used, it may act as both a payment processor and a payment gateway. PayPal is an example of this.

Businesses can use PayPal directly to send invoices, or they may use another bookkeeping service that acts as an invoice provider and payment gateway, but links to another payment processor. An example of this is using Freshbooks to send invoices, and using PayPal or a credit card acceptor to receive the client’s payment.

For new businesses just starting out, a service that acts as both a payment gateway and payment processor may be the easiest option. In addition to PayPal, Stripe and Square are other examples of these. Square is especially popular for businesses that accept in-person payments with a card reader.

Customer Support
Technology, although extremely useful, is not perfect. Thus, something is bound to go awry every now and then. Choosing a payment processor with excellent customer service can save a lot of time and reduce frustrations for both businesses and customers.

The hours of the business can help determine the extent of the customer service needed. 24/7 customer service is generally the most ideal, but if a business only operates between set hours on set days and never beyond that, it may not be completely necessary.

However, technical difficulties arising without someone to step in and offer solutions may result in the loss of a sale. So reliable customer service is something to consider when weighing options.

Wrapping up…
Payment processors are not one-size-fits-all. It takes some thorough research to determine which best matches a company’s needs and the needs of its customers. Security, costs, support, options, and the nature of a business all influence which payment processor will be the most efficient for a business. Keep in mind these factors and weigh all options before choosing which processor makes the most sense economically, practically, and safety-wise.