How to Choose the Right Payment Processor

Ecommerce: How to Choose the Right Payment Processor

When it comes to ecommerce, one of the most important aspects of it is payment. Once a customer has decided to buy something, you need to provide a convenient way of making payments. This is why choosing the right payment processor is very important. Some of the most popular ecommerce payment processors include Google Wallet, PayPal, Dwolla, WePay, Stripe and 2CheckOut.

Here are some of the factors you should consider when choosing a payment processor for your ecommerce site:

1. The Costs Involved

Using different payment processors has different implications in regards to cost. You need to choose a service which fits within your budget. Here are some of the costs you need to look out for when choosing a payment processor:

  • Setup/registration charges – These charges will vary depending on whether you opt for an all-in-one or a payment processing only solution. If you don’t have much money to spend, it would be advisable to choose a service that has minimal setup costs. You can then upgrade to a higher plan once your business picks up. However, paying low setup costs usually means paying higher transaction fees
  • Recurring fee – Generally, there are two kinds of recurring fees; the monthly fee and the transaction fees. The latter includes sections such as the gateway fee, AVS (address verification) fee and the authorization fee.
  • Hidden charges – Most payment processors have hidden fees which could appear under disguises such as bounce payment fees or order cancellation fees. Therefore, you need to be very careful especially when a prospective provider offers very low-priced plans. You might just find yourself incurring a wide range of hidden fees later. Take time to read the fine print before signing on the dotted line.

2. Compatibility

Find a payment processor that accepts not less than four credit and debit card brands. This will offer your customers a wide range of options to choose from. In addition, you need to find a provider that supports payments via PayPal. This will allow you to accommodate the many people who carry out online transactions via PayPal. Using a payment processor which is not compatible with PayPal can be detrimental for your ecommerce business.

3. Multicurrency Processing

If your ecommerce store is targeting people from all over the world, then you need to ensure that the provider selected supports multicurrency processing. However, take time to check their fees carefully. Some payment processors charge hidden fees in form of cross-border fees or currency conversion fees for processing such overseas transactions. In addition, you need to ensure that the provider offers good international support.

4. Onsite Processing

Find out if the payment processor has onsite processing features. Onsite service providers allow customers to carry out transactions directly from your ecommerce site. When it comes to offsite processors, someone will have to go to a different site to make payments. It would not be advisable to use offsite payment processors since they take customers away from your site. They might even rethink their buying decision before reaching the processor’s site.

5. Security

Security is a very important aspect when selecting a payment processor. Be sure to choose a provider that offers data encryption features. In addition, you need to look out for security related features such as PCI (Payment Card Industry) compliance, CVV2 verification, billing address confirmation and VeriSign SSL certificates. Don’t hesitate to go beyond your budget to ensure the security of your customers.

See Also: Awesome Platforms for Selling Your Digital Products

The guidelines above will help you make a more informed decision when choosing payment processors. Feel free to share your thoughts and opinions in the comments section below.