To begin with payments, a merchant should establish a merchant account, which is comparable to a bank account and assists with the management of debit and credit card funds. There are various kinds of merchant accounts based on if a merchant accepts debit and credit cards online, in physical stores, or both.
To begin with payments, a merchant should establish a merchant account, which is comparable to a bank account and assists with the management of debit and credit card funds.
The process to become approved for an account may take a few weeks. It typically requires detailed documentation from the merchant. Not every merchant gets approved. A merchant can bypass this step by working with a payment provider that aggregates multiple merchants into one merchant account. Using this method, the supplier is taking on additional risk, as all merchants using the supplier will be represented by one account. However, it makes the initial setup easier and makes the fee structure easier, based on transaction volume versus merchant account fees. PayPal and Amazon are just two examples of payment providers which use an aggregator merchant account.
Another alternative is for the payment provider to apply for a merchant account on behalf of the merchant. This is a version that Stripe utilizes, for example. This choice makes the initial setup process easier for the merchant.
After a merchant has a merchant account, it should find a payment gateway provider to link the merchant’s shopping cart to the merchant account. Oftentimes, a merchant account supplier will also offer payment gateway services. But that isn’t always the case.
The crucial payment gateway features to evaluate are ease of use, ability to integrate with the trade platform without custom programming, and penalties. Authorize.Net is a major payment gateway. Chase Paymentech and Heartland Payment Systems, as examples, offer both payment gateway and merchant account providers. PayPal and Stripe also include their own gateways.
10 Questions to Ask Potential Payment Providers
These questions help a merchant pick an appropriate payment provider.
- How long has the provider been in business? This is important as a new provider introduces additional risk from the merchant’s environment. The lure of low prices shouldn’t affect the quality of service a merchant intends to provide to its shoppers. If the supplier has been operating for less than 2 decades, be careful.
- Does the provider work with the present commerce infrastructure? Most payment providers provide plugins for several trade platforms, such as Miva Merchant, Shopify, Magento, and lots of more. It’s important to make certain that payments work together with the merchant’s shopping cart and won’t need expensive, customized integration.
- Can the supplier guarantee performance and availability? A payments platform that’s not available means shoppers won’t have the ability to complete the purchase. And a slow payment procedure can raise the cart abandonment rate. Make sure either scenario won’t likely happen with a new payment provider
- Is your payment platform protected and compliant with PCI and other criteria? Without security, both the retailer and its customers could get rid of money. Any payments platform should support security features like authentication, authorization, and SSL. The supplier must also be compliant with PCI and other industry standards, such as HIPAA for healthcare.
- Does the supplier offer built-in fraud direction? Obtaining another supplier for fraud management and integrating with the primary payments provider can be complicated. Built-in fraud management reduces the amount of moving parts.
- Does the supplier’s platform process chargebacks smoothly? Chargebacks are a fact of the retail enterprise. The supplier should process them, typically, for a small fee — versus the merchant doing it manually.
- Does the platform provide reporting for assessing customer activity? Basic activity reports ought to be part of the payment platform to analyze, for instance, frequently purchased products, and products that are bought together. These standard reports must minimize the creation of custom ones.
- Does the supplier operate internationally? If the merchant has operations or customers internationally, the payment provider will have to process debit and credit cards internationally, also.
- Does the supplier offer 24/7 support? This is important for many retailers, in order that payment glitches can be worked out quickly. Some suppliers offer different tiers of service — not necessarily 24/7 support.
- Can the supplier provide references, from real customers? Talk to some existing clients to confirm that the supplier does, in fact, provide the quality of service that it promises.
There are other questions related to choosing a payment provider which I did not tackle. Please provide your suggestions in the comments section below.