8 Factors To Consider When Choosing a Merchant Service Provider

Last updated on April 24th, 2024 at 07:23 am

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Before choosing a merchant account provider, it is important to think about what features it has. If a provider’s fee is the cheapest in the market, you should ask questions, such as: Is it safe and secure? Is it PCI-DSS compliant?

Of course, the pros of using a merchant processor outweigh its cons, but there are features and factors you should consider when choosing a provider for your business.

Factors To Consider When Choosing Merchant Service Provider

Reliability record

Processing uptime of a payment processor plays a key role in the smooth operation of your business. It does to other companies. The processor supporting varying cards is not enough, its uptime is also critical.

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If a processor is known for experiencing downtime, it will affect customer experience, which will also impact your revenue. You need to check the track record of whatever merchant account processor you want to choose.

Even banks do have network issues, meaning card-related issues may be out of your control, you can’t rule such out, but the provider must be reliable, have mechanisms in place to resolve whatever issues that come.

Your priorities

You will need to ask yourself, “What services do I need?” Are you a startup that cannot incur a higher yearly or monthly subscription fee?

If you would like to have a merchant account that will cater for your future needs so that you will not need to switch providers, then the subscription might not be a problem.

Also Read:  Benefits of Having A Merchant Account For Your Business

You might want to consider PayPal, if managing an e-commerce business and popularity, easy-to-use, and auto integration are your priorities, but it comes with high transaction fees. Regardless, it is important to evaluate your priorities from the outset.

Cost and pricing

Merchant accounts are not free, even if it’s your merchant account product of your financial institution, the fee may however vary, depending on the specifications and additional functionalities you are looking out for.

It is important to weigh the cost against the value you would get. For instance, if you don’t have more than five sales per month (on average), choosing a merchant provider with a higher monthly fee might erode your returns. But this depends on the cost of your product or services.

If your business processes a high volume of transactions every month and you want to save more on transaction fees, StaxPayments might not be a bad idea because you will enjoy the flat fee.

There cannot be a consensus answer to, “Which merchant account provider is best for my business?” You have to weigh the cost viz-a-viz your priorities.

Features that support business expansion

Choosing a merchant account that takes care of your business needs makes your work easier and allows you to concentrate on devoting your time to more important things.

Ideally, all in-one platform should encompass:

  • Payment options,
  • Fraud and dispute,
  • Payout options,
  • Customer interface,
  • Payment software support,
  • Third-party integration,
  • Insights of your business activities,
  • Financial reporting,
  • Revenue optimization etc

If you want a merchant provider that has all these features, then you have to check what features they have. Even at that, there are questions you should ask:

  • Do the features come with extra charges?
  • Are the features easy to set up?
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Flexible to your business needs

Choosing the payment processor that has all your present and future needs will save you a lot of trouble switching to a more advanced provider in future. But this also depends on your financial strength.

The one that will best for you should have an option to add premium features as you expand for more functionality. It won’t much sense to subscribe to what you don’t need when your business is at an early stage.

Is the provider flexible? If you’re looking for a long-term relationship with your provider, ask questions if it’s possible to add more features when the need arises.

Customer support system

If technical glitches arise, will your merchant account provider get things back online on time? Because a few seconds of an issue will disrupt payment and would impact your sales.

Support is important to any successful product. It is a good idea to read reviews before choosing a provider. If it takes customer support 24 hours or more to resolve whatever issues you are facing with an account, you will most likely lose customers.

Your provider should have multiple channels such as phone numbers, email, online chat, chat messaging apps, and social media – for issues to be resolved.

You don’t want your prospective customer to have a notion that your payment channel is unreliable

Before choosing a merchant processor, check the average customer support wait time. It is better to choose a merchant account provider that has in-house support than the ones that outsource. The in-house have a higher rate of being familiar with your account and tools than the others that outsource support.

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Choose the one that will give you peace of mind when you need help, even at odd hours.

PCI-DSS compliant

Merchant service providers must be PCI-DSS compliant, so, a provider should support you to be compliant so that you don’t compromise customers’ data.

Payment data is highly sensitive, a compromise will not only have a long-term dent on your business, it may resort to legal suit against your company. Nobody wants to use their payment cards on a compromised platform.

In ensuring that you stay compliant in protecting your customers’ data, you have to install and constantly maintain a firewall configuration to protect cardholder data and also ensure that to encrypt transmission of cardholder data across open, public networks.

Merchant service providers should have a support system that will guide you to scale the complex PCI compliance regulations.

Must support the latest payment methods

Your provider must not only employ secure payment technologies such as encryption and tokenization, it must also support the latest payment methods such as updated terminals and other payment technology that will make the business run smoothly.

For instance, the payment industry is moving from physical cards to virtual cards, contactless and chip cards.

Summary

Your merchant service provider should see you as a financial partner from guiding you to be data security compliant to providing every support you need when the need arises.

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