How to choose a payment provider: a comprehensive 10-step checklist
February 28, 2024
9 min
Whether you're scaling up, venturing into new markets, or refining your payment processing, choosing the right payment provider is crucial for your business success. With many options available, evaluating and choosing the one that perfectly aligns with your business goals might be an intricate mission.
Aiming to facilitate it for you, we compiled a detailed roadmap with tips on how to choose the best payment provider for your online business.
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We’ve prepared a brief PDF version of the checklist that you can download for future reference.
Continue reading for more in-depth information!
1. Outline your business needs
First things first, clarify your business goals and how you plan to achieve them. It's like drawing a roadmap for your journey ahead. Once you've sorted that, you have the basis to see if a payment provider fits you.
Here's what to consider:
- Omnichannel support. Ensure the payment provider supports various payment options relevant to your audience across different channels. Define whether you'll need mobile payment solutions, subscription billing services, or digital wallet integration.
- Payment provider fees. Analyse if the payment processing fees align with your financial strategy. High credit card processing fees can substantially decrease your profits, so finding a balance between cost and quality of service is crucial.
Payment processing fees are the costs that merchants bear as they process customer payments. The cost of your payment provider's services includes acquiring, processing, and gateway fees. Typically, the first two make up the majority of what you pay. These are generally fixed and cannot be negotiated. However, you can still try negotiating the gateway fees to save.
2. Global сoverage
Now think big! If you plan to reach customers worldwide, ensure your payment options can keep up.
Evaluate the payment options and currencies popular with clients in your target geography. Then, ensure the payment provider complies with local regulations and is flexible in supporting localisations of different languages and currencies. It's essential for cross-border payment processing.
Relying on a single payment partner in one region could be risky, primarily because of possible outages and downtimes. Consider having at least one failover option to save your sales and protect your business from financial and reputational losses.
Interested in global expansion?🌎
Explore our comprehensive guide with the payment overview spanning all continents, delving into the unique regional nuances of each payment landscape. Gain valuable insights on accelerating the international growth of your business.
3. Integration options
Now check if the chosen PSP fits in your existing business infrastructure. This step will help you maintain operational efficiency and minimise disruptions.
Most PSPs offer plugins, extensions, or APIs for popular platforms like WordPress, Magento, Shopify, WooCommerce, etc. Check the provider's API documentation to gauge how to integrate it into your existing setup.
An experienced developer or a payment team as a service can help you streamline the integration process. Also, by opting for a payment orchestration platform, you can access a considerable list of ready-made integrations with payment service providers and save your time and expenses.
4. Payment provider's health
Now, focus on ensuring that the selected payment provider offers the reliability and flexibility necessary for your business's smooth functioning and growth.
Here's what you need to consider:
- System stability assessment. Evaluate the provider's historical system stability and uptime records to ensure it maintains uninterrupted service.
- Flexibility and scalability. As your business expands, you'll need a payment provider to keep up. Look for flexibility in accommodating rapid development and scaling. Also, check the provider's ability to handle peak transaction volumes without compromising performance. This is essential in case of sudden spikes in transaction activity during high-demand periods.
- Commitment to innovation. Regular feature updates and enhancements show the provider's dedication to keeping up with technological advancements and evolving customer preferences.
5. Payment processing
Evaluate the provider's capabilities in handling various authorisations and capture scenarios, including incremental authorisations, extended windows, and over-captures.
For instance, high-risk businesses with Know Your Customer checks in place may find two-step charges helpful, for they allow the check to be performed before the actual payment is made.
Confirm the speed of transaction processing and settlement. Fast and secure online transactions enhance the customer experience and optimise cash flow management for your business.
6. Risk management
Protecting your business and your customers' sensitive information is paramount. Here's what you need to consider:
- Fraud management tools. Check if the payment provider offers any built-in fraud management tools for detecting and preventing fraudulent transactions and safeguarding your business from potential losses.
- Dispute and chargeback management. Assess the provider's approach to handling disputes and chargebacks. A robust system for managing these issues is crucial for resolving conflicts efficiently and maintaining customer trust. Also, take a look at the fees associated with processing chargebacks and refunds.
The fees for processing a refund with certain providers are lower than those of a payout. Thus, forex brokers often use this trick to make payouts and save costs on transaction processing.
Daria
Lead Customer Success Manager at Corefy
- Rolling reserve conditions. Check the provider's policy regarding rolling reserves, especially if your business operates in a high-risk sector. Understanding these conditions ensures transparency and helps you make informed budgeting and risk management decisions.
Typically, a rolling reserve is required for high-risk merchants. This is because businesses operating in such industries face higher financial risks, and providers want to protect themselves from possible losses by retaining a portion of the merchant's funds. The risk level of your business determines the percentage of each transaction that will be withheld, as well as how long your reserve account will be active.
7. Reporting and analytics
Pay attention to the tools that will help you gain valuable insights into your payment processes: reporting and analytics. Here's what you need to check:
- Real-time transaction reporting. This will help you keep a finger on your business pulse: track sales, monitor performance, and identify trends as they happen. Look for a provider that offers this feature, allowing you to stay updated and react swiftly to any changes.
- Custom reporting capabilities. No two businesses are alike, so finding a payment provider with custom reporting capabilities is crucial. Whether you run a small online casino or a leading forex platform, having the flexibility to tailor reports to your unique needs is a game-changer.
- Data analysis and visualisation tools. From spotting trends to identifying growth opportunities, these tools help you make sense of the numbers in a way that's easy on the eyes and the brain. So, look for providers that offer robust analytics and reporting dashboards with intuitive visualisations.
8. Reconciliation
The payment reconciliation process is a crucial aspect of financial management that lays the foundation for the financial stability of your business.
Post-settlement reconciliation involves matching up transactions after they've been settled, including chargebacks, refunds, and other adjustments. This process resembles assembling a complex puzzle, requiring efficiency and attention to detail. Opt for a provider that offers efficient reconciliation tools, streamlining the process and minimising discrepancies.
Check how reconciliation works at Corefy 👇
9. Privacy and security
Upholding regulatory standards, such as PCI DSS compliance, is non-negotiable when it comes to protecting sensitive data during card payments. Evaluate the provider's data security measures, including encryption protocols and access controls, to mitigate the risk of unauthorised access or data breaches. maintaining PCI compliance for merchants is pivotal in fortifying overall payment security and trustworthiness.
10. Additional services and support
Now, explore the extra perks and support services that can elevate your clients’ payment experience and streamline your operations. Here's what you should consider:
- Customer and technical support. Look for a PSP that offers timely and reliable support channels, such as live chat, phone support, or dedicated account managers, to promptly address any concerns or queries.
- Additional services. Consider the availability of supplementary services that can enhance your business operations. These may include subscription management, invoicing solutions, or support for in-person payments if your business requires it.
- Certification and hardware support. If you require EMV certification for card-present transactions or support for specialised hardware, ensure that the payment provider offers the necessary resources and assistance.
Finalising the decision
Now that you've done your homework and thoroughly evaluated relevant payment providers for your project, it's time to make some final steps before integration.
- Contact the provider and request references or case studies from their existing clients. Hearing about other businesses' experiences can provide valuable insights into the provider's reliability, performance, and level of customer satisfaction.
- Schedule a demo to see their service in action, test out key features, and ask any additional questions you may have.
- Request sandbox access to test their service in a simulated environment, giving you a firsthand experience of how it would work for your business.
After completing all the steps above, you can determine if the payment service provider meets your business needs and proceed with the integration process.
