Avoid These 5 Mistakes When Selecting a Payment Processor
Choosing a payment processor (or payment gateway) is one of the most important decisions you can make for your company.
It’s a potentially overwhelming one. Dozens of legitimate payment processors operate in the United States. Most adequately perform their core function: effectively, accurately and securely processing card present and card not present transactions for businesses of all sizes. How do you know which one is right for your business?
For starters, you need to know what to avoid when selecting a payment processor. As you narrow down your choices and finally make your selection, be sure to avoid these five mistakes.
- Failing to Look Past Headline Rates and Fees
Not all payment processing fee structures are created equal. Many gateways entice new clients with low headline rates and fees, only to tack on hidden charges or variable rates on the back end. By the time you realize you’re paying too much, you’re locked into a multi-year contract.
Before choosing a gateway, spend time with the user agreement’s fine print. Better yet, look to gateways with minimal fine print (or none at all). If you’re not sure you’re the best person to evaluate dense, legalistic language, rope in an associate or consultant familiar with the payment processing world.
- Going the DIY Route Before You’re Ready
If you have a competent technical team at your disposal, by all means choose a processor that expects its clients to DIY their way through bugs and disruptions.
Most small businesses don’t have the internal resources to manage and troubleshoot their own payment gateways, though. If you’re in that boat, choose a processor with a comprehensive customer support infrastructure and a reputation for rapid issue resolution.
- Ignoring Less Common Payment Types
Just about every payment gateway is capable of processing EMV credit card transactions. Those that don’t are rapidly adapting — or exiting the space altogether.
But many payment processors cut out ascendant (though still less common) payment types like ACH debits, e-checks and mobile wallets. It’s particularly important for e-commerce platforms to accept these types of payments. If you’re strictly brick-and-mortar, make sure your processor can handle gift card transactions too.
- Skimping on Security and Fraud Protection
If you’re not familiar with PCI compliance standards, you need to be. All payment processors are required to meet PCI Data Security Standards (PCI DSS) — if you come across a gateway provider that can’t clearly articulate its PCI DSS adherence, stay far away.
PCI compliance is just one piece of the security puzzle though. Top-tier payment processors have robust fraud detection, mitigation and resolution solutions for clients and end-users threatened or affected by identity theft and credit card fraud. Working with one could mean the difference between a catastrophic, reputation-destroying breach and a manageable setback that doesn’t ruin your customers’ trust.
- Refusing to Admit You’ve Made the Wrong Choice
Mistakes happen. If it becomes clear down the line that you’ve chosen the wrong payment processor, be big enough to admit it and bold enough to right the wrong, even if it involves temporary financial pain. Simply hoping that a poor-fit processor won’t do lasting damage to your company’s bottom line or reputation with its customers is not a sustainable strategy. Sooner or later, the bill will come due — and you’re going to be the one footing it.
Are you in the hunt for a payment processor? What’s your top concern? Please share your thoughts with our readers below.