Growing your business is important to you. However, along with the growth of the business, comes added responsibilities in ensuring your payment methods are as smooth as possible.
An instance would be when you are looking into the services of AnswerFirst’s pricing to figure out the best calling rates you can use for your business and helping it to expand operations in the long term.
However, it may seem simple in theory, but difficult to implement. You will need to upgrade your payment systems, and this begins through the addition of merchant accounts – lines of credit that assist in processing of transactions and deposits of funds in the business accounts. The truth is though, not all these accounts are equal in their scope and footing, and you can easily become confused with all the various providers offering the service.
So, the next question would be, what are some of the factors you need to consider? After all, the last thing you want is investing your money in a service, only to find it is not working for you, and losing your money in the process due to unethical practices. Read on for some of these factors.
How to Choose a Best Payment Provider?
1. Providers of merchant accounts vs. Payment facilitators
This is among the first steps to take when you are presented with a list of providers and want to narrow them down – you need to know if you are going to settle with a merchant account provider or payment facilitator. The ultimate choice will depend on your business, and its maturity level.
The good thing about payment facilitators is that they will always offer you a shared merchant account, as long as you have expressed your interest in signing up with them. They also have lower barriers to entry, and therefore, the time you use to setup your account is fast. However, they have certain drawbacks to them – your funds are always at a higher risk of loss, because the facilitator will not underwrite you properly before they register you on the service.
The merchant account provider is the complete opposite of this, as each member that signs up gets their own account. That also means they will underwrite you before they sign you up on the platform, and they will need to know your bank statements, existing merchant statements, as well as financials.
If you have a newer business, you might not be able to use merchant account providers because of the lack of these documents, and you might decide to turn to payment facilitators instead. The advantages of merchant accounts are many though – for instance, you have the chance to benefit from extra plan options, according to your business revenue and size.
These providers also give you the chance to streamline your electronic billing payment systems through operating like payment gateways, and connect you with support teams in case of anything.
2. What are the rates offered?
It is common to find payment facilitators offering you pricing at flat rates. This can be beneficial when you have a low volume of trade and income, but it is not helpful for a high processing business. This is because you have to pay more for any medium- and low-cost transactions because there is a high transaction rate attached to everything, as it must account for reward levels and risks.
There is a difference with the approach of merchant account providers, as they give interchange-plus pricing. This charges you less when you have a lower cost transaction, which allows for cost-effective approach. The method is more suitable for a medium or large-scale business, because it will help in sparing profits more often.
3. The technology available to you
The changes that are occurring in the technology sphere are very fast-paced, and this forces you to continuously upgrade your technology use. Certain providers will tend to refuse the use of EMV-ready devices, which might force you to change your provider or bear the risk of needless chargebacks.
Some providers additionally might tell you they have EMV terminals, but they do not have the required certification that allows them to authorize chip card slots. You cannot afford to shoulder the risk burden from such providers in case something goes wrong, especially if you have a high-volume business.
In addition, you also need to consider the rising adoption of mobile payment solutions, especially if you are planning to expand to certain regions of the world – making NFC a useful consideration for increased security. Technology such as this points to a paperless future, which is a good opportunity for your business to reduce its overall costs of storing paper receipts.
4. How well does the provider adhere to ethical billing practices?
This might be more difficult to know, but you still need to be careful about it because of the rife unethical practices. In many cases, merchant statements will confuse you, as they will not offer you the information you need in a clear way, and there are no calculations that show you a clear breakdown of each payment.
These unethical practices might come in the form of items such as tax report fees, inflated fees, hidden refunds, downgrades, bank services, and so on. If you know how to spot these payments, you can easily pick them out – unfortunately, this is not always the case. If the provider is not willing to answer these questions, then this is a clear sign of dishonesty and unfair charging.
5. What kind of support is there?
Payment facilitators will often fail to give great support, and if they do, it is only through emails. It is therefore important to consider the level of customer support you are getting when selecting a provider – in case you may encounter problems with customers due to payment methods. The best providers will always give you ways to reach them through live chat, telephone, and email.
It is important to carefully consider the payment support option you provide for your customers, but it is not as easy because there are multiple factors you must consider.
- Mass Payments 101: Its Benefits to Small Businesses
- How to Pick the Right Payment Processor for Your Business
- The Dangers of Using Net 30 Payment Terms
Author: Shrutika Potwar