Choose the Right Payment Processor: 5 Frugal Strategies
When it comes to making decisions for your business, there’s a fine line to walk between finding cost-friendly solutions and making investments that are built to last. Nowhere is this more true than when choosing a payment processor. Not only does the payment processing partner your company picks need to work well for your needs behind the scenes, but it will also have to serve your customers well.
How to Choose a Payment Processor
If you make the wrong decision, this can spell disaster down the line not just for your customer relations, but also for your operating strategy. Luckily, picking the right payment processor for your business has never been easier.
When your staff understands the essentials of choosing an effective and efficient payment processor, you’ll find the right technology for your needs without having to break your budget.
In this article, we’ll delve into the top frugal strategies your team should understand when choosing a payment processor. You should:
- Know the realities of your business model.
- Decide between an aggregator or dedicated processor.
- Consider the needs of your staff and customers.
- Ask about payment security measures.
- Think about the future of your business plan.
Ready to find the right payment processor for your business? Let’s jump into these effective strategies!
Bonus! Choosing the right payment processor goes hand-in-hand with picking the perfect point-of-sale system for your business. Check out the ways Lavu supports businesses like yours with their tailored POS options for growing companies.
1. Know the realities of your business model.
There is one big challenge when deciding what kind of payment processor they need. And that is an internal misunderstanding of how payment processing fits in with their business model.
Not all businesses have the same transactional needs, and not all companies face the same payment challenges.Before you make an investment in a payment processing system, you’ll need to review the realities of your business model.
Gather together a group of key members of your business and run through some exploratory questions. To get started, try some of these examples:
- What is your day-to-day transaction experience? Your payment processing needs will differ if your company conducts several transactions a day, or hundreds, or only a few a month. Depending on the scale of your business and the size of your customer base, your transactional habits will determine your payment processor needs.
- What are common payment difficulties faced by your customers? If you’re looking for a new payment processor, chances are you’re unhappy with the one you already have in place. This may be due to poor customer experiences with the system. Make a list of common issues your clientele face when interacting with your payment processor.
- How can your behind-the-scenes operations be elevated? Similarly, your current payment processor may not be supporting efficient operations at your business. Choose a solution that easily integrates with your other operational software and your preferred point-of-sale system.
Remember, your new payment processor should make transactions smoother, not throw a wrench in your sales strategy. Be sure to choose a solution that fits in with the realities of how you do business and supports the needs of your customers.
2. Decide between an aggregator or dedicated processor.
Another big conundrum is deciding between a payment aggregator or a dedicated payment processor.
You can ]ask your team some essential questions to determine what right for your needs:
- What kind of initial investment can your business make? Aggregators (like PayPal and Square) require a smaller investment than partnering with a dedicated payment processing system.
- What kind of payment processing features do you need? Dedicated payment processing systems often offer more configurations and more support services than aggregators.
- What kind of relationship do you want with your payment processor? Payment aggregators tend to serve hundreds (or thousands) of other businesses, while dedicated payment processors typically have a limited number of clients.
The bottom line? Payment aggregators generally work best for younger businesses with tighter budgets. Dedicated payment processors are a better fit for more established companies with room to grow.
3. Consider the needs of your staff and customers.
Your new payment processing system needs to work for the people who will be using it the most. And these will be your customers and staff members.
Include both of these groups in discussions as you make your shortlist of payment processors.
Conduct surveys of staff and customers to find out their wants, needs, and pain points when it comes to payment processing. Ask questions like:
- How much freedom do your customers want when making transactions? In this day and age, having only one kind of payment terminal is a huge misstep. Choose a solution that enables a variety of sales: on site, mobile, online, and more.
- How will your staff interact with this payment processing technology? Be sure that your next payment processor is intuitive to use for staff and has the features they need to be successful. The system should be easy to train new staff members on, too.
- Will there be security measures in place to protect customers’ data? The worst mistake your business can make when choosing a payment processor is picking a system that doesn’t put customer security first with practical anti-fraud measures.
Bonus! Looking to learn more about what features your payment processor should have in place? Check out this extensive guide to payment processing by Double the Donation for an in-depth dive into this tricky subject.
4. Ask about payment security measures.
The security of your payment processor should be a huge concern for your business. After all, it’s one of the top consumer concerns when individuals choose where to spend their money. It can play a big role in whether or not your company builds trustworthy relationships.
Take a look at some of these essential data security features your payment processor should have:
- PCI compliance. Payment Card Industry (PCI) compliance refers to a set of payment standards determined in 2007 that are designed to protect consumers as well as businesses. Your payment processor needs to be PCI compliant or you risk facing fines.
- CVV2. Your payment processor should have CVV2 verification in place, meaning that they are able to verify the identity of a card holder by asking them to input the payment card’s CVV2 code found on the back of all credit and debit cards.
- EMV. Especially for businesses that have on-site point-of-sale terminals, adopting EMV chip reading technology is a must. With EMV, your customers can rest assured that their payment data can never be compromised by your business.
Above all, choose a payment processor with robust safety features in place that protect both your business and its customers. By finding the right balance in safety features, you set your business up for customer relationships that will stand the test of time.
5. Think about the future of your business plan.
Finally, one of the defining factors to consider when making your payment processor investment is the future of your business.
You’ll want to choose a solution that your current budget can support. At the same time, you need to consider the more advanced needs your company may have down the line.
This may mean picking a streamlined payment processing partner that is a comfortable investment at this point in your business plan. You can also choose a solution that offers scaled price points and upgrade as you grow.
Whatever the case, think of these key questions when making your selection:
- How are you planning to grow your business? Your company may be in its early stages, but that doesn’t mean you won’t quickly grow over the next few years. Similarly, even for more established businesses, choosing a flexible solution can be a smart choice.
- Do you want to be prepared for future tech advancements? Payment processing is one of the fastest changing technology sectors out there, and your business should pick a partner that understands how advancements in payment and security processes will shape your company.
- How will your relationships with customers evolve? It’s possible your customer base will grow wider over the next few years, or that the needs of your customers will change. Find a payment processor with the features and services to address changing customer relationships.
No matter your business plan, there’s a best-fit payment processing solution out there to suit your needs. Be sure to choose a partner that places adaptability above all else so your team can be confident that the system is built to last.
If you want your business to grow, you’ll need to find a payment processor that can grow with it without hurting your bottom line. Now that you know these top strategies, you’re ready to pick the payment processor that’s right for your team!