When choosing a payment processor, many businesses automatically pick the lowest bidder. They assume that they're saving a ton of cash and that the profits will just roll in like high tide. It could happen, but it is extremely unlicly. Choosing the lowest bidder may be a mistake – the first in a series of mistakes that can cost your company both time and money.
Here are a few things to consider:
They are not unnecessarily hidden, just not boldly represented. Companies typically advertise their lowest “qualified” rate. These generally apply to certain types of cards and most likely only if they're physically swiped through a card terminal. Online transactions are a different animal absolutely. They're generally “non-qualified” rates.
The catch? Your eye. It catches the advertised “qualified” rate. You sign without asking all the right questions. Companies are not obliged to go out of their way to highlight these “non-qualified” rates, nor are they obliged to highlight in glaringly bold text that there are special fees related to cancellations, withdrawals, or batch processing. It's up to you as the consumer to know to ask and to read all related documents thoroughly before you sign-up.
Back in the day, if there was suspected suspicious activity online requiring investigation, you may not have been able to touch your money for up to several weeks. Yikes! These days, payment processors need a very good reason to freeze your cash. Check into a payment processor's anti-fraud response protocol. Anti-fraud investigation should be a simple process that does not lock you out of your account. Always look for a provider that gives you fast secure access to your money.
Fraud and data breaches are not just striking the huge online merchants. It's a real concern for anyone doing business online. Installing and monitoring your own fraud protection system may sound like the way to go, but it is extremely expensive and time-consuming. Your payment processor should bear that burden. Choose the most secure and reliable payment processor you can find. When evaluating potential payment processors, be sure to review their fraud-protection services. A couple “must ask” questions those services should answer are:
- Do they flag or deny potentially risky transactions?
- Is data securely stored and encrypted?
Be sure to choose a secure provider. The alternative could cost you.
Yes, we're still talking fraud here. Most consumers are law-abiding citizens who play by the rules. There are a few sketchy characters out there however, who will try to pay you with money from a hacked credit card account. Some may repeatedly complain that they never received their product or service when they did. Find a processor that will work with you in alleviating the fraudulent activity burden.
Setup & Support
Nothing scares most business owners more than setting up a payment processing system. Some are more complex than others. Look for one that simplifies the setup process and requires little to no technical expertise. Also, make sure they have support from real live people should you encounter any problems with setup, processing, or individual sales transactions.
The PCI Data Security Standard is a US industry standard governing how customers credit card data is secured. There are rules touching on how you process and store card holder data.
Instead of recreating the wheel, spending time and money to build a system in compliance with the ever-increasing rules laid out by the PCI Standard, partner with a payment processor that is already in compliance. It will help reduce your work and give you peace of mind.
All payment processors offer its own unique features. Companies should compare each offer including its fees.