7 Tips on How to Choose the Right Payment Service Provider
October 2nd, 2017
7 Tips on How to Choose the Right Payment Service Provider
Online businesses are experiencing their best days yet, as e-commerce is rapidly turning into an ever more valuable industry – to date, consumers make 51% of their purchases online. This fact leaves traditional retailers no choice but to try and keep pace with new tech while improving their online presence.
Despite a wide range of possibilities, the goal of every online business remains the same: to persuade as many customers as possible to successfully purchase their product or service. For this reason, convenience and ease of use while paying are essential to customer satisfaction, and thus, retention.
Choosing a payment solution that matches each and every one of your requirements is not an easy task. This article may serve as a helpful guideline if you wish to find a new Payment Service Provider (PSP) to get the most out of your online business.
1. Understand the Image of Your Customer
It’s an unwritten rule in the world of business that the customer is king. For that reason, the first things to consider before diving into the PSP selection process are the needs of your customers. The customers’ payment preferences vary depending on a wide range of factors, including industry and location.
That being said, get acquainted with the various payment methods in your target regions, as well as how widely spread they are, and if they are applicable to your target demographics. Doing this grants you a chance to create a win-win situation: your customer is satisfied with the ability to conveniently make payments, which in turn rises up your conversion rates.
2. Be Strategic, Plan for the Future
It’s quite likely that you have already thought about which steps are necessary for your online business to develop and expand. If so, bear in mind that such changes may also require expanding the payment portfolio you offer to customers.
As a business evolves, the payment service provider might not be able to fit the exact nature of the business and its customers any longer. To solve this, consider both the payment methods that are currently applicable to your business and the future prospects of your expanding or developing business. That will save you from additional charges and efforts associated with changing or adding a PSP in the future and allow you to scale easily.
3. Mind the Additional Costs
There is no single perfect PSP for every online business and there is no fixed price range for the multitude of services they provide. Therefore, there are different kinds of fees PSPs might charge you. In addition to the integration fees, their pricing schemes typically include:
- monthly fees – fees charged every month for services provided
- transaction and processing fees – the majority of PSPs charge fees per transaction as well as commissions based on fixed forms or as a percentage
- additional fees – these fees are tacked on for certain extra features, for example fraud prevention and analytical tools.
4. Get the Most out of Your Future PSP
As an online business, you need to know how much effort is required to implement a certain payment gateway to your online platform. The amount of time and technical skills required for the integration process of a PSP vary in complexity and effort on a provider-to-provider basis.
Pay attention on how easily your PSP lets you implement new payment methods and add new features as well. Besides, good technical documentation will provide you with an idea of the additional technical features the PSP offers so that you can decide if they are applicable to your online business model.
5. Plan for Unexpected Risk and Fraud
If you choose to be careless with respect to fighting fraud, the next case may already be a threat to your e-business. Therefore, utilizing an anti-fraud system that matches your security needs is crucial and you should always check that a provided solution from your PSP meets your requirements.
As an online business, you are probably aware of PCI (Payment Card Industry) requirements. PCI is an association between major credit card schemes which sets the rules and regulations that preside over the sensitive data of credit card holders and the use and storage thereof. The requirements differ depending on the size and activity of your business. Thus, consider to what extent PCI requirements are applicable to your business, which in turn greatly impacts the implementation scenario of your future PSP.
6. Master the Analytics to Become Efficient
Knowing in which direction to develop your business is key. Analytical tools will allow you to better understand the various aspects of your business and customer base, such as: conversion rates, gross and net sales, payouts, and many more.
For example, some PSPs offer custom reports which can be tailored to your requirements to help you track your business stats: where do your customers come from, what are their shopping preferences, and at what time they make purchases.
7. Learn More About Your Potential PSP
Last but not least: find out if the PSP you’re interested in is safe and reliable. Before making a final decision, research how reputable your chosen PSP actually is.
Ask other online business you know if they have faced an issue with the PSP and if they can give you feedback regarding the payment service provider that you are considering. At the end of the day, the reliability and dependability of a payment service provider is the feature which really matters.
With these seven points, you will be able to choose the payment service provider which will help your online business to evolve and scale. To summarize, the most crucial thing is that you, as an online business, are not plagued with headaches due to payment issues and that your customer has a frictionless online payment experience.