Small business payment processing
What is payment processing for small businesses?
If you’re running a small business, you’ve probably thought about integrating a payment processing solution to accept multiple payment methods. Cash and paper checks are gradually losing their relevance and being replaced by digital payment methods, including e-wallets, NFC-based solutions, and cryptocurrency. The rapidly changed customer needs force businesses to quickly adapt to new ones. Proven fact: сompanies that accept online payment methods are significantly increasing their competitive strength in the e-commerce market. This is especially true for small businesses where competition can be extremely high.
Payment processing for small businesses represents a set of tools and services that allow business owners to accept, process and manage different types of payments from their customers. Usually, to receive these services, a merchant enters into a contract with a third-party provider that supplies the merchant with software and hardware to process online transactions. In addition to the POS terminal, PSPs provide their clients with a secure payment gateway for transferring data between all processing participants, and a merchant account.
Who is involved in payment processing
Payment processing can be described as the path that each transaction takes from point A to point B. At first glance, this process seems easy and fast, but the technical side is much more complicated than we think. Let’s take a look at how an online credit card transaction is processed from start to finish.
- A customer enters their credit card details on a checkout page.
- A payment gateway sends an authorisation request to the acquiring bank. It also sends another request to the card network serving the cardholder (Visa, Mastercard, or other).
- The card network authorises the payment and sends a confirmation to the acquirer, informing it of the amount to be debited from the customer's account.
- The issuer checks the customer’s balance and sends the confirmation back to the network.
- The network sends the approval to the acquirer and gateway.
- The funds are debited from the customer's account and credited to the merchant's account.
Small business payment processing software features
Whether you’re selling products, delivering food, or offering on-site services, you don’t want to miss any sales opportunities as a small merchant. To deal effectively and grow your business faster, you need a feature-rich processing platform that supports multiple methods and provides maximum flexibility. While the feature set of the processing platform is tailored to the particular needs of your business, there are several universally applicable features that are almost guaranteed to improve small businesses’ productivity and attract more customers.
A well-known fact is that e-commerce is exceptionally vulnerable to fraud. In the case of a small business, the loss of even one customer can negatively impact sales and income. With this in mind, businesses only integrate platforms that have the highest level of data protection. PCI DSS compliance, fraud monitoring, and data encryption are essential for a secure processing system.
Every small business knows how important it is to create a simple and easy user interface for their clients. To accept payments on-site, avoiding the risk of shopping cart abandonment, you need to integrate a solution that supports checkout customisation. The customisable checkout page allows buyers to pay for a purchase without being redirected to third-party sites, ensuring a smooth and intuitive customer journey.
Running a small business is a continuous and laborious process that requires constant analysis and quick decisions. Things become much easier with management tools, allowing you to manage day-to-day operations, monitor the transactions flow, and track your customers’ payment preferences from one place. Plus, you’ll get reports and forecasts to track KPIs and analyse the competition.
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How to choose a small business payment processing company
There are three ways to accept online payments: directly through a bank, with a payment aggregator, or a payment service provider. While many businesses believe that working with a bank is more reliable, it is not always true. If third-party PSPs are focused on the quality of service, then the bank is physically unable to pay due attention to every client. This is why the vast majority of small businesses prefer third-party intermediaries to get a processing solution. Here are some criteria for choosing a small business payment provider.
Security & compliance.
Despite the robust security tools that providers have, there’s always a risk of data breaches and fraud. Such incidents can harm your reputation and lead to loss of revenue. Regardless of the type and size of your business, the security of online transactions is essential. In addition to PCI DSS compliance, pay attention to the security tools that a particular processing company uses in daily work. Among them are encryption, tokenisation, SSL, penetration testing, and others.
Multiple payment methods.
An equally important factor when choosing a processing platform is the availability of those payment methods that are most popular in your location. The more options you integrate, the more likely customers are to make a purchase. For instance, at Corefy, we support more than 400 methods of payment, enabling merchants to scale their businesses faster.
Pricing and fees.
Before you conclude a contract with a PSP, check and evaluate the pricing plans available and fees for the services offered. For small businesses with low transaction flow, Corefy’s Starter plan is a great solution. Here’s what we offer:
- Tools for optimised checkout flows
- Global payment capabilities with a single integration
- Comprehensive security and rigorous compliance
- Payouts using cards and alternative methods
- Financial reconciliations and reporting
Get a ready-made platform for accepting all types of online payments. Schedule a demo to see how it works!
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