If you are a merchant running an online store, one of the first things to consider is to how you want your customers to pay for the products that they buy online. In short, what you need is a secure payment processor. Let us understand what a payment processor is and what its role in accepting payments online is.
A payment processor executes the transaction between the customer, the merchant, the issuing bank and the acquiring bank. In other words, it is responsible for transferring the money from the customer’s bank account to merchant’s bank account. Choosing the best payment processor is vital for any ecommerce website, hence it is recommended to select the right one for your online business.
Here are the things to consider when looking for the right payment processor.
- PCI Compliance- A payment gateway stores the credit card information of the customer temporarily during the transaction process. A payment processor should adhere to and comply with the PCI DSS standards to ensure that the customer’s information is secure. As an e-commerce business owner, you should determine if the payment processor is accredited before opting for one.
- Security and Fraud Prevention- In today’s time when there is an increase in fraud and data breaches, one should place high importance on customer’s sensitive payment information and confidential data. To fight against any such fraudulent activity, payment processor should have automated tools to prevent suspicious transactions. Payment processors use tokenization technology, which is the process of substituting the customer’s PAN using a token. Merchant will store the sensitive information of the customer in the form of a token, which is useless for a hacker. Another secure way is P2PE in which the credit card details are encrypted from the time it is swiped till authorization. This prevents the merchant from seeing the PAN data of the customer.
- Integration- Does the payment processor offer plugins or APIs to integrate the payment processing into the merchant’s software? Does your payment processor provide software that is compatible with your existing website? There are some payment processors which are not compatible with all online shopping carts. So, ensure that you check this before you sign up.
- Customer Support- Is any customer support available if in case of any malfunction? Look for a payment processor that can offer customer support 24/7.
- Transaction Fees-Check what fees you will be charged with apart from the cost of each of the transaction. Do they charge annual or monthly fees?
As you can see, these are some of the factors to consider when choosing a payment processor. Different payment processors offer unique features, but you need to do the right amount of research and select the most secure payment processor that meets your requirements and business needs at an affordable rate. It is recommended to consider multiple payment processors and then narrow down the choices before making the final decision. It may seem to be time consuming but it will be worth it!
Wikipedia lists over 70 payment gateways, each having different terms, fees, and features.
Some handle a hundred transactions per month while others process the same amount each hour. Some of them have transparent pricing, some of them are full of “hidden fees”.
Let’s be real: there are a lot of pitfalls you can easily fall into if you’ve never dealt with payment gateways.
To make your life easier, I’ve made a list of 13 simple questions that will help you avoid them and make a better informed decision.
