What should you look for in a payments platform? Learn five essential questions that you need to ask a potential payment processing provider before making a decision. 

By FINSYNC

Small business payment processing can get complicated, starting with choosing a provider. What exactly should you look for? Should you focus on security? Affordable prices? And what about integration with your existing platforms? 

While there will always be needs specific to your small business, there are some general boxes a good payment platform needs to check to optimize your payments. In this article, we’ll review five essential questions to ask a potential payment processing provider to ensure you’re making the right decision for your business. 

#1: How Is Their Security?

People are still wary of sharing their credit card details online, especially when it comes to a company credit card. Therefore, security is perhaps the most important area where your payment platform needs to shine. There are a few best practices you can look for when researching payment platforms. 

The first one is a double-blind system, where the payment platform withholds financial information from both parties. You will never see your customers’ bank account or credit card data, and they will never see yours; the payment platform alone is responsible for keeping the information safe. 

The second practice is compliance with the official industry standard: the Payment Card Industry Data Security Standard (PCI DSS). “PCI Compliance”, as it is generally referred to, is an important standard for payment platforms, and compliant companies will typically display it visibly on their website. If not, all you need to do is ask.

#2: Do They Accept All Common Payment Methods?

Confirm if the payment platform offers the payment methods your customers are most likely to use. Electronic payments such as credit cards and ACH payments are the two most obvious ones, but don’t forget about checks. According to Goldman Sachs, as many as 80% of all small business invoices are still paid by check.

Accepting checks can be a demanding process for a small business. However, it can be made easier if your payment platform offers a lockbox service, where checks are processed for you and converted into ACH payments.

#3: Does the Payment Platform Offer Robust Customer Support?

If the worst happens — a disruption in your payments — how quickly will your payment platform respond? After all, your payment platform is your livelihood. Any disruption in your payments might have a negative effect on your cash flow. If that happens, you need to be sure the payment platform you use will respond quickly. 

To be sure, you can ask:

  •     Where their customer service is located
  •     If they offer 24/7 support
  •     What other resources are available, such as FAQs and video tutorials

#4: Can the Payment Platform Integrate with Other Software?

Your payment platform will have to be integrated with your other software to make sure your day-to-day operations run smoothly. Depending on what type of small business you run, you may need to integrate with:

  •     e-commerce software
  •     accounting software
  •     analytics provider(s)

For example, an integration with your accounting system can make bookkeeping easier, especially when it comes to accounts payable and accounts receivable. Along the same lines, integration with your analytics services can provide you with valuable customer insights.

#5: What Is the Price Structure?

Some payment platforms charge a flat fee, while others have transaction-based pricing. No pricing structure is necessarily better than another. What is best for your business depends on how many transactions you have per month, how much security you need, and what additional features you want.

However, you can expect to pay all or some of the following fees:

  • Transactional fee – a fee you pay for each payment to the payment provider. Typically this fee is a mix of a percentage of the amount and a set small fee for card payments and flat fee for ACH and check.
  • Interchange fee – this is the fee an issuing bank charges for use of their cards. This fee is typically captured in your transaction fees.
  • Monthly or annual fee – a fee you pay for using the payment platform, on top of the transactional fees.
  • Batch fee – payment platforms will batch payments together and deposit them once a week to your account. Sometimes there is a separate fee for that service.
  • Chargeback fee – if a payment is rejected, you will most likely incur a fee.
  • User seats – some platforms let you have as many users as you need. Others charge per additional user, typically monthly.

Beware of any hidden fees, which usually show up as penalties. Study the fine print and see if there are any restrictions on the number of transactions or the maximum sum per month, for example.

Lastly, it’s important to make sure it’s free for your customers to pay you. You should be able to absorb any fees for your client when you request a payment.

Choose a Platform That Meets the Needs of Both You and Your Clients

Choosing a payment platform can be tough, but ultimately you need to focus on how it can best serve you and your clients. Your clients care about using their preferred payment methods. They also want their payment information to be safe from hackers.

Of course, security is also important for your payment information, as it is equally vulnerable to hacks and accidental leaks. Beyond security, small businesses should look for excellent customer service, reasonable prices, and easy integration with your existing software.