Payment Processing: How to Choose the Best Option for Your Business

payment processing

Approximately 26% of Americans think credit cards are dangerous. These individuals avoid using them in favor of cash or debit cards.

However, that means nearly 75% of Americans have no issue with using credit cards. Which is why businesses should accommodate this form of payment when possible.

Working with the right payment processing service provider is crucial to making checkout convenient, but not everyone knows how to find the right option.

We’ve created a comprehensive guide on payment processing services and how to make the best choice for your business. Let’s get started.

Check Their Past Reputation

What have other clients had to say about their experiences? Did they get the results they wanted?

Taking time to research past reviews goes a long way toward making the best decision. Keep in mind that not all reviews you encounter will be legitimate. Shady service providers sometimes plant fake reviews to boost their reputation.

These are relatively easy to recognize under most circumstances, though. A major red flag is when multiple positive reviews are posted minutes apart.

Another is when a batch of reviews contains similar phrasing or keywords. These scenarios could indicate the reviews are illegitimate.

They should have plenty of experience in the industry. Keep in mind that new companies won’t always fall short of your goals.

However, they’ll be less likely to meet them. With enough due diligence, you’ll find the ideal candidate for your needs.

What Transaction Types Do They Support?

Transaction types include online, in-person, keyed, mobile-entry, or invoice payments. Assess which are most common at your business and find a provider who can accommodate them.

If you plan on scaling your business, it’s best to overestimate the number of transaction types you’ll need. As your company grows, you may need to accept more payment types than you used to. The last thing you want is for your customers to have difficulty paying.

What Is Their Pricing Structure?

The provider you choose should be fully transparent about their pricing. This makes it easy to compare different services and save money.

You shouldn’t have trouble finding pricing information on their website. Sometimes, you may need to reach out to them.

Ask for a pricing breakdown to gain insight into what you’ll pay. If they attempt to deflect this concern, continue your search elsewhere.

Ask about the fees they impose, as well. It’s best to work with a company that doesn’t charge miscellaneous fees. These often don’t go toward the services they provide.

Look at a handful of different providers and compare their prices. You often get for what you pay, though. The lowest-priced option isn’t always the best choice.

Do They Emphasize Security?

Data breaches are common in virtually every industry. In fact, the average data breach costs over $4 million. Situations like these can be impossible for many businesses to accommodate.

The service provider you choose should place a large emphasis on security. This means using the appropriate safeguards and keeping their software up to date.

Active monitoring is also important. This can help them identify issues and resolve them before they get out of hand.

Check their security architecture before you hire them. Reputable providers will be proud to showcase the methods they use.

What Is Their Deposit Timing?

It’s best to minimize the time it takes your company to receive funds after a credit card transaction. Receiving them the next day is standard in many industries.

Some companies need the same-day deposits, however. Keep in mind that providers often charge an additional fee for same-day deposits.

This is typically a small percentage of the transaction amount. Use these sparingly, as fee amounts can quickly add up. Same-day fees are added to your monthly bill to make them more convenient.

Do They Focus on Companies Like Yours?

Don’t choose a professional that doesn’t frequently work with businesses like yours. It’s crucial for them to understand the different nuances of your industry. Otherwise, they won’t provide the best level of service.

Check their website for examples of their past projects and clients. This will help you quickly discern if they’re a good fit. The main attribute to look out for is the size of businesses they work with.

If you own a large business and they frequently work with small companies, they might have trouble meeting your needs.

Point-of-Sale (POS) Hardware

Some people make the mistake of assuming payment processing and point-of-sale systems are identical. POS systems record cash payments, facilitate card transactions, and generate sales reports.

They also integrate with accounting software and manage inventory. Don’t assume that your provider offers these by default.

Ask them what you can expect to pay for POS hardware. You should also ask them about their policy for replacements/upgrades.

Don’t work with a provider that doesn’t have a comprehensive plan in place. Extensive downtime can cost a substantial amount of money.

Mobile/Online Features

Not every business needs only POS hardware. Some companies operate entirely online.

Others need support for a combination of online, POS, and mobile payments. Make sure your provider offers the level of support you need. This will maximize customer satisfaction.

Software Integration

No matter how effective their software is, it won’t do much good if you can’t integrate it. The payment processing software should easily run alongside existing applications. There shouldn’t be bugs, glitches, or crashes once you install it.

To streamline this process, reputable providers help their clients integrate their solutions. They do so by having a professional technician provide assistance. They might also give businesses access to comprehensive guides.

If you’ve never dealt with this scenario before, find a provider that offers human assistance. Collaboration is much easier when you can speak to another person. It’s especially important to integrate your payment processing software with your accounting software.

This allows you to import and sync data. You won’t have to manually enter information, which saves time and improves accuracy. The faster you integrate, the faster you can improve your company’s revenue.

Contract Periods

Stay away from extensive contracts unless you’re sure the provider can meet your needs. There’s nothing worse than being locked into a 24-month agreement and realizing you’ve made a mistake.

It’s common for a payment processor to offer short-term agreements to their clients. Some even allow you to forego a contract to see if they’re a good fit.

This is meant to serve as a trial period that you can use to determine how effective they are. Avoid providers who pressure you into signing a contract.

The agreement should be in conventional terms and free of industry jargon. If something doesn’t feel right, don’t be afraid to explore other options.

Customer Support

Look for companies that offer live 24/7 support. This is the best form of assistance you can receive if issues arise. Some companies might not have a need for this, though.

This is especially true for businesses that are only open for a few hours each week. In contrast, it’s recommended for companies that have extended business hours.

The same is true for those who accept payments from across the country. This type of support is also ideal for accepting mobile payments, such as at events. Unresolved issues with mobile payments can lead to a substantial loss in revenue.

Third-Party vs Merchant Accounts

Third-party processors will handle transactions outside of your store. They charge slightly higher transaction fees, but you don’t have to worry about payment card industry (PCI) compliance.

These are a set of standards businesses must follow to keep transaction information safe. Common third-party processors include PayPal and Square.

Businesses that use these often have low transaction volume and few to no employees. Entrepreneurs with poor or no credit also use third-party processors.

Merchant accounts allow businesses to handle credit card payments within their own network. These provide much greater control and have lower transaction fees.

To elucidate, a third-party processor would be best for someone who sells custom t-shirts at music festivals. They simply need a way to facilitate miscellaneous payments. Conventional businesses should always choose merchant accounts.

Understanding Transaction Fees

Transaction fees can quickly add up, and it’s crucial to understand them. There’s a variety you may encounter depending on who you work with. Let’s explore the most notable.

Markup Fees

These are dependent on the processor you choose. Payment processing services add their own fees to transactions to generate revenue.

Many processors keep these amounts fair, but some overcharge. Thoroughly research these numbers when choosing a provider.

Interchange Rates

The credit card network determines interchange rates, and these are the same for every merchant. They vary depending on if you use Visa, Mastercard, Discover, or American Express.

It’s important to note that these fees are non-negotiable. Educate yourself on them so you can budget appropriately.

Assessment Fees

Assessment fees are paired with the interchange rate of the card payment network. They’re non-negotiable and consistent across merchant service providers.

In general, these are a fraction of a percent. Combined with other fees on this list, they can quickly add up. Don’t neglect them when assessing how much you’ll pay.

Keyed Transaction Fees

You can sometimes pay more when a card number is manually entered instead of inserted or swiped. If you don’t plan on manually entering card numbers, you can disregard this amount. Some businesses avoid these fees by refusing to manually enter payments.

Monthly Fees

These are also known as flat fees. Payment processing companies charge a fee every month to use their software.

You have a bit of flexibility here, though. You might be able to pay a higher monthly fee in exchange for lower transaction rates. Some providers require transaction minimums each month.

If you don’t reach these thresholds, you could have to pay an additional monthly fee. Read the terms of your agreement so you can prepare for this scenario.

Online Transaction Fees

The fees to process online transactions are typically slightly higher than those for swiped/inserted cards. This service pays for itself, though.

Imagine if customers couldn’t purchase anything from your website. There’s a chance you’d miss out on thousands of dollars in revenue.

PCI Compliance Fees

Credit card processors occasionally charge PCI compliance fees. This will vary substantially between services.

Some credit card processors charge you if you are not PCI compliant. When looking at their fees, be sure to ask about this one.

Equipment Fees

Businesses don’t always purchase equipment outright. Many choose to rent instead. This can help save money on integrating POS systems, mobile card readers, and credit card terminals.

Depending on the equipment fees, it may be cheaper to eventually purchase your own hardware. Companies on a tight budget might have to limit how much hardware they rent at first.

Chargeback Fees

Chargebacks occur if a customer requests a refund or disputes a charge. The good news is that you can minimize chargebacks by clearly describing the product or service you sell. The bad news is that people sometimes fraudulently use chargebacks.

This allows them to get something for free. They might even use stolen information for the transaction. Credit card processors impose fees for each chargeback your company experiences.

Batch Fees

Some processors charge batch fees, which occur when you resolve your transactions. Many payment processing companies offer free daily batching and only charge if you settle your transactions more than once. If you don’t plan on batching twice or more per day, you have nothing to worry about.

Choose the Right Payment Processing Provider

The right payment processing provider could help you take your customer experience to the next level. They’ll facilitate fast, consistent, and secure card payments at your business. With enough due diligence, you’ll find the best option for your company.

Our professional team strives to exceed the needs of every client regardless of their business type or size. We have more than 50 years of combined experience in the industry, allowing us to help your company get paid in more ways in less time.

Ready to take the next step? Get in touch with a representative at Trinity Payments today.

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If you’re in the market for a new payments partner, want to upgrade your systems, or just need to ask a few questions, our dedicated team is here to help. Try us on for size.