If you want to accept electronic payments via debit card or credit card on your site, you need to use a payment processor service. There are many different payment processor services that you can choose from – the most famous include Paypal, Stripe, Square, Worldpay and Braintree.
Just how do you choose the right online payment processor? This post offers a few questions to consider to help you make the right choice.
How much money in fees are you willing to pay?
One of the most important things to compare is payment processing fees. Many payment processors charge a fee per purchase – usually a flat fee and a percentage fee ranging from 1.3% to 3.5%. Other payment processors charge a monthly flat fee instead. This may be based on the size of your business and the amount of transactions you get each month.
It is worth thinking about how much you are willing to pay and what is the best option. Percentage fees adjust to the level of business you receive, whereas a monthly fee may work out more profitable during high-earning months but more expensive during low-sale periods.
Are you a high-risk merchant?
Some companies are classed as ‘high-risk merchants’. These are companies belonging to industries that receive a high level of chargebacks or refunds, or that are more likely to experience financial instability. Examples of high-risk industries include subscription services, gambling, adult entertainment, pharmaceuticals, CBD and cannabis and travel agencies.
Seeking out specialist payment processors is recommended if you are a high-risk merchant as some regular payment processors may charge very high fees or refuse to provide you with a service. You can find all kinds of niche payment processing services online for such companies such as online payment processing for CBD stores.
Do you want to accept foreign payments?
Not all payment processors accept foreign currencies. If you want to sell products or services to customers in other countries, it could be important to seek out a multi-currency payment processor.
Compare exchange fees for these payment processors and look at exactly which currencies are covered (currencies for smaller and less influential countries may not always be accepted).
Do you want to accept crypto payments?
Some payment processors have started to accept payments for cryptocurrencies like Bitcoin. This can be useful for some online products and services.
It’s important to understand the risks that come with accepting cryptocurrencies and to make sure that you have an exchange account set up already to receive these cryptocurrencies.
Do you need a scalable option?
It’s worth looking into how many transactions a payment processor is built to deal with. Some companies like ticket selling companies often need to be able to handle thousands of transactions in a short time period, while others may only receive a few individual payments week.
If there’s a chance that you might deal with a high level of transactions in the future, consider whether it’s worth looking into a scalable payment processor. Such payment processors have different plans that you can upgrade to if you need to be able to take an increasing number of payments in a shorter period.
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