Choosing The Right Online Payment Processor

Want to start accepting payments through your website? You’ll need to choose an online payment processor. This is a payment service that connects your website to a merchant account so that you can accept debit and credit card payments (as well as potentially other forms of electronic payment). There are many different payment processors to choose from. Some of the most popular include:

• Stripe
• PayPal
• Square
• Shopify
• Revolut
• Worldpay
• Adyen
• net

Some people assume that all payment processors are alike. But in fact, there can be major differences including fees, support payment methods and integration options. This post delves into some of the important things to consider to help you choose the right payment processor.

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Compare fees

Online payment processors come with different costs that are worth comparing. This can include transaction fees and in some cases added monthly fees.

Most payment processors charge around 1.5% to 3.5% on every transaction. Others charge a flat fee (usually only a few cents) on each transaction. The latter can be better if most of the payments you accept are large payments, but could harm your profits if you’re used to accepting smaller payments of a dollar or less.

Some payment processors charge very low transaction fees, but make up for this by charging a monthly flat fee on top. Others have no monthly fee, but high transaction fees. This Merchant Savvy guide helps to compare fees.

Check supported payment methods

Different payment processors may also support different forms of payment. Almost all payment processors support both debit cards and credit cards. However, some don’t accept certain cards, or charge extra fees on transactions used with certain cards.

Mobile payments are now commonly supported by most payment processors. There are however some payment processors that charge more for mobile payments or require you to upgrade your plan to accept them.

When it comes to accepting different currencies, it’s also worth noting that different processors accept different currencies. Some are purely designed to accept one currency and can be ideal if you’re only accepting domestic customers. Others are able to accept almost every currency – including some cryptocurrencies like Bitcoin.

Look into integration

There is certain other software that your payment processor may need to integrate with. It’s worth considering what software you’re currently using and which payment processors are supported.

If you’re using an eCommerce platform, you’ll need to make sure that the payment processor can be used with this platform. Some ecommerce platforms like Shopify have their own payment processor in-built.

Linking your payment processor up with accounting software could also be important for automatically tracking each incoming payment. Some payment processors do not naturally integrate with certain accounting programs, however there are services such as this Stripe accounting integration service that can help the two programs integrate.

Consider scalability

Some simple online payment processors are only designed to handle a certain amount of transactions per day. If you’re likely to expand your company one day and you’re likely to take in a lot more payments in a shorter amount of time, it could be essential that you choose a payment processor that is scalable.

Some payment processors have options to upgrade to a more robust service if needed. Having the option to upgrade could be more efficient than having to replace your payment processor at a later date.

Assess PCI compliance

It’s important that a payment processor is PCI compliant. This is a compliance scheme to ensure that all payment processors are secure. All major payment processors are PCI compliant, but there are some smaller dodgy payment processors out there that aren’t.

Payment processors with level 1 PCI compliance offer the greatest level of security. Such payment gateways typically use advanced fraud prevention methods to help protect customer payments.

Read reviews

It’s worth reading reviews to see what other users think of each payment platform. A good quality payment processor should have mostly good reviews. Payment processors with lots of negative reviews should be avoided.

Make sure that you’re not just checking the star rating and that you’re actually reading the content of reviews. This will help you determine what it is that each user likes and dislikes about each payment processor.

Conclusion

Selecting an online payment processor is something you should put some careful thought into. There are many comparison guides online that can help you compare aspects such as fees, supported payment methods and security. Take your time to read these guides and work out exactly which processor is best suited to your business.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies