A new business may only operate in one market now, but with growth opportunities in markets around the world, it makes sense to think long-term when selecting a Payment Service Provider (PSP).
Many payment service providers only operate within their home countries. When their client merchants are ready to expand into offshore markets, they may find it difficult or impossible to add international payment services without scrapping their original PSP setup.
A better solution is to lay the groundwork for offshore expansion now, by choosing a PSP that offers multi-currency payment processing, has established relationships with offshore acquiring banks, and is able to operate in multiple international markets. Then when the merchant is ready to move into new markets, the payments infrastructure is already in place.
Ensuring international coverage is just one of many issues merchants should considering when selecting a PSP. There are also plenty of issues to consider regarding technology.
Ensuring that a merchant's shopping cart software and PSP software can work together is critical. Before choosing a PSP, a merchant must decide whether it wants to host the payment pages or let the PSP handle it. If the merchant's online shop is already set up, it must also ensure that the PSP is compatible with your current software.
Some PSPs offer free integration services for hosted payments pages, which can enable your business to ramp up more quickly and without the need for additional technical help.
Also, should a merchant choose a customized or standard solution. Off-the-shelf solutions may be the simplest option and can be appealing to new merchants who have many other start-up details to manage. But tailored solutions can help position you for success by offering the right services for your business, such as recurring payments for subscription-based businesses, and by giving you options that may not be available with a one-size-fits-all plan, such as easily customizable payment pages to give your checkout process a seamless look.
Customised PSP services may also save money. For example, a PSP that evaluates your business based on its performance record rather than relying on industry standards may be willing to charge you a lower rate per transaction than a PSP that determines fees based on industry alone.
Additionally, all PSPs handle credit card transactions, but not all providers work with all credit card companies. For example, virtually all providers work with MasterCard and Visa, but some dont support American Express or Discover.
Ask every prospective PSP which cards they support, and ask about these items as well: Does the PSP support ACH/e-check payments from US customers? What about direct debit and MOTO (mail order/telephone order) payments? Does the PSP support currencies in the markets your business sells into or may sell into in the future? Can the PSP support the recurring payments necessary for subscription-based business models and lay-by (lay-away) purchase options? Does the PSP integrate the latest fraud-detection tools to protect your business and your customers? Other services offered by PSPs may include live support for merchants and their customers, detailed transaction reports, access to real-time transaction data, and personalized account management.
Payment service fees vary from one provider to the next. They also depend on the type of business you operate and your transaction volume. Make sure that you have clear answers to these questions before you decide on a PSP: Is there an application or setup fee? Will the processing fees be a flat rate per transaction, a percentage of each transaction, or a combination?Based on industry and expected transaction volume, what will the fee rate be? Can that rate change over time? For example, as transaction volume rises, will there be a lower rate or are you locked into your initial rate?Are there other fees you may incur? Will the merchant be required to sign a contract, or are month-to-month services available?
Use the answers to these questions to compare the fees and flexibility in choosing the PSP that best fits the business model and budget. And take your time in deciding. Ideally, a merchant will work with the PSP for many years to come.
Ultimately, the best PSP is one that works to aid success over the long term. That means offering high-quality, secure, customized services that are PCI compliant, compatible with offshore expansion plans, and priced within a merchant's budget. You may have to talk to several providers before you find one with the right combination of services, security and support, but the time you invest now will pay off.
Daria Rippingale is CEO of BillPro.com.
