With seamless payment solutions a must have for businesses the world over, companies need to ask the right questions when selecting a vendor.
Getting the right gateway for the life cycle of your business could be the cornerstone for your success, getting it wrong could cost you.
The one size fits all phenomenon vendors peddled five years ago has since been replaced with adapted solutions at a fraction of the cost. Gateways are now providing region specific solutions creating an improved cardholder experience as standard.
With this in mind, here are the top 3 questions you need to ask when selecting a vendor
1. Show me the money
Payment gateways will sometimes just offer the connectivity and will require you to seek out your own merchant account. Some will provide a single solution where the merchant account is included as part of the sign up.
A merchant account will determine when your money will be in your bank account. When and how often your money will settle can impact your cash flow.
Understanding how the payment gateway and its merchant account will work is key. Some of the global carts will require you to use their merchant account and if you don’t it will hit you with additional fees. It is important to know how chargebacks work, if goods or services are not received the cardholder can raise a dispute.
The key piece of information to understand is ‘how long from when the customer makes that payment do I receive it?’ This can be on a scale from approximately one day up to seven days. Just because the transaction is real time does not mean you will have your funds immediately. There is a lot of back end bank settlement required to be processed and in some cases money is held for monetary gain.
2. What countries do you service - really?
Despite all the talk, there is no single vendor who can serve a global market. This is contrary to the well-executed marketing campaigns of the global giants. In many cases, each country has its own preferred payment method like ACH in the US for bills, Bpay for bills in Australia and Sofort in Germany all being supported by ‘in country’ players.
Often some of the global players may not be providing customer support during your high-volume times. Getting a payment gateway which aligns to your region’s time zone and preferred method of payment is paramount.
Also, knowing which countries are factored into your expansion horizon are key. Processing costs can be lower if you are set up with a player in that country however if your volume is low it may be best for these customers to use your existing gateway in another currency even at slightly higher rate. If your gateway suits 90% of your transactions 90% of the time, you can service the majority of your customers so this could be the best route.
3. What integrations do they offer?
Having a smorgasbord of integrations on tap will enable your business to grow without the need to change suppliers. Working with a payment gateway that integrates with your industry software may be a prudent approach.
Fraud tools vary widely in cost and complexity. Depending on your operation you will be considered high or low risk. Partnering with a gateway who has a solution which meets your business profile is important. There is no point spending a few dollars per transaction preventing fraud if that is swallowing your margin. In contrast, if you are in an industry where fraud is apparent this investment would be essential.
As much as it is important to integrate with your internal practises, this cannot be done at the expense of the customer experience.
Some organisations use different payment vendors for different client experiences. This can be due to usage and size of payment.
If you are starting the process of looking for a payment gateway provider knowing the supplier supports all channels and can fit in with your everyday processing is key.
With PCI compliance and data security a hygiene factor for payment gateway providers, it is time to look deeper at the total experience in the region you operate.
Many merchants choose a single Payment Service Provider (PSP) and then find themselves at a disadvantage if they can’t dynamically keep up with changing customer preferences, e.g. supporting additional currencies and new payment methods.
The reality is that there are many compelling reasons to work with more than one PSP:
1. International sales - to accept local currencies and payment methods in different countries. This may entail going with PSPs the primarily service specific markets.
2. Cost reduction - to route transactions to the lowest cost PSP. Different PSPs charge a range of prices for specific payment methods and transaction types. With two or three PSPs, it is possible to choose the lowest cost PSP for each payment type. This can also be the case for international sales where PSPs in specific markets may have better pricing than a global PSP. Single providers can be convenient by may lead to increased overall costs.
3. Independence - to avoid being locked in and mitigate the risk of fee increases. If the merchant has only one PSP then there is a risk of becoming ‘locked in’ with a potentially high cost to change PSPs (or add another) later. In this situation there is a possibility that the incumbent provider may gradually increase transaction fees over time until the merchant feels some real pain on their margins. Having at least two PSPs mitigates this risk and is likely to keep fees lower over time.
4. Contingency - as a backup if the primary PSP goes down for a period.
5. Customer preference - to ensure a customer’s preferred payment methods can be offered. A merchant may lose sales if it does not accept the preferred payment method of the customer. It may be necessary to work with multiple PSPs to be able to accept all the payment types customers wish to use.
6. Omni-channel - to ensure a set of payment methods can be consistently accepted both online and in-store. It may be necessary to use more than one PSP in order to consistently accept a set of payment methods both online and in-store.
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