Businesses have several options for processing credit card payments, including:
Point of sale (POS) systems: Ideal for brick-and-mortar businesses such as retail stores, restaurants and cafes, POS systems—including advanced payment devices—offer a comprehensive solution that integrates sales, inventory management and customer relationship management. They deliver a seamless checkout experience and are particularly suited to businesses that require detailed sales reporting and analytics.
Mobile credit card readers and tap to pay devices: Suitable for businesses that operate on the go and service providers who visit clients at home, these easy-to-use portable devices allow businesses to accept card payments anywhere with a smartphone or tablet. They are cost-effective and provide flexibility for businesses that do not have a fixed location.
Online payment gateways: Essential for any business that sells products or services online, online gateways are highly secure, enable businesses to accept payments from customers worldwide and often support multiple payment methods.
Virtual terminals: Useful for businesses that need to process card payments by phone, virtual terminals allow businesses to manually enter card details to process payments without the need for a physical card reader.
Merchant services: Suitable for businesses of all sizes that need a comprehensive payment processing solution, these comprehensive sets of payment processing resources benefit businesses seeking a one-stop solution to manage all aspects of payment processing.
Choosing a payment processor
Selecting the right payment processor involves considering factors like fees, contract terms, customer support, data and insights, security, and integration capabilities. Your payment processor should also have a deep understanding of network rules and regulations, as well as foresight to help you manage the ever-evolving payments landscape.
Payment processing fees
Low transaction rates may seem attractive, but don’t be blinded by them. Instead, familiarize yourself with the different types of fees, including transaction fees, monthly fees, chargeback fees and any additional service fees. Determine the effective rate by dividing the total fees by the total sales volume. (This will give you a clearer picture of the overall cost.) Pay particular attention to hidden fees such as setup fees and early termination fees. Choose a pricing model that aligns with your transaction volume and average ticket size.
International and cross-border payments
You should also consider your business’s needs when choosing a processor. If your business does international or cross-border transactions—or you plan to soon—you need to carefully consider the abilities of you processor. Major considerations when choosing an international payments processor include:
- Ability to handle and process multiple currencies
- Foreign transaction fees and exchange rates
- Robust security with international standards, as international transactions can be more susceptible to fraud
- A range of accepted payment methods that are popular in your target markets, as well as local payment options
Data, insights, platform and customer support
A payment processing partner should assist businesses in continuously monitoring, benchmarking and optimizing revenue, cost and risk associated with payments. The payment platform should enable quick detection of issues related to payment methods, approval rates, payment costs and dispute resolution. The payment processor’s support team should be able to advise businesses on how to measure and compare their payment performance against industry standards.
This platform support allows businesses to take action to improve their payment processes. The platform and customer support teams should offer measurable long-term results through proprietary data insights, provide proactive consultation with payment advisors and data scientists, and share industry innovations, ensuring that technology solutions are aligned with business needs.
Security and compliance
Different payment processors offer varying levels of security support and Payment Card Industry Data Security Standard (PCI DSS) compliance assistance. The PCI DSS requires all organizations handling cardholder data to maintain specific security protocols—from encryption standards to employee training.
A processor’s approach to security affects both implementation costs and ongoing operations, particularly in how they handle fraud monitoring, chargeback management and compliance documentation. Some processors include these security features in base fees, while others treat them as premium features.
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