What Has Changed Recently With Payments?
As we all know, credit card processing companies are primarily engaged in the processing of purchases and payments made through credit cards. They are often responsible for sellers’ acquiring banks. They are basically liaisons between banks, credit card companies and merchants, and may provide small business with extra services, like control of fraudulent activity.
Payment processing companies come in two general types these days: frontend and backend.
For frontend processors, the job often involves credit/debit card authorization. On the other hand, backend processors take care of contacting credit card issuing companies for the final or settlement phase of the process. Sometimes, a company does both frontend and backend processing. And they can also be specific to certain business types, like online shops or mobile vendors.
If you’re a small business owner with so much to think about, you may be tempted to get the first processing company that comes along.
But if you want a company that can actually become an asset to your operations instead of a liability, you will sit down and take time to make a few crucial considerations.
For instance, you’ll want to know how well a certain processor handles customer issues. Good credit card companies are always willing to help small businesses and will practically become their business partners.
If you were considering a processor that turns out to have a negative reputation when it comes to credit card disputes, move on to your next prospect.
Also important is the cost that is associated with using a particular credit card processor. Additionally, on top of the fees that must be paid with each transaction, a merchant may need to pay for putting up a payment processing service, receiving monthly statements or early termination of contract.
If a credit card processing company offers a payment gateway, which is basically a server that hooks up a merchant with different payment applications, banks and card providers, it will most likely come with extra fees as well.
Not to mention you need to compare different companies’ pricing models. An interchange plus pricing model lists down all the fees you have to pay, which is good because predictability helps you cut your costs and manage your budget more effectively.
Before actually going with a certain processor, find out whether it will take all types of payment used by your customers, including mobile payments. You don’t need a processor that will put a cap on how many transactions you can have every month.
If you look around, you can easily see the huge lot of credit card processors nowadays, but of course, they’re not all created equal. It’s worth your while going through all the considerations above before deciding which company to hire.