5 common mistakes to avoid when choosing a payment provider

Aug 29 2019 | PayPal editorial staff | 4 min read

One of the most crucial steps for getting paid online is selecting a payment processor. But comparing solutions for accepting credit cards and other payment options can be a daunting task
To help you when you’re compiling your research, we’ve uncovered the most common mistakes businesses make when choosing who to process their payments with.
 

1. Failing to read the fine print regarding rates and fees

When comparison shopping for a payment processor, keep in mind that a low rate doesn’t always mean a low overall cost. Processors can have high processing fees or variable rates that can make it hard to tell what you’ll really be paying.

For example, some credit card processors charge higher rates for what they call “non-qualified” cards – such as corporate and rewards cards. These cards earn customers reward points or cashback bonuses so they’re popular and a lot of your customers will be using them. Finding after the fact that they come with a higher rate can be an unpleasant surprise so look for a payment processor with transparent fees to avoid the shock.
 

2. Choosing based on rates alone

While those low processing rates might seem great, you shouldn’t choose a credit card processor based on rates alone. There are many factors that can dramatically affect how your business runs and the profit you make, including security, technical support, ease of integration and cost.
 

3. Ignoring security and fraud protection

Data breaches have hit retailers large and small, and customers now demand the best protection possible to help lower their risk of card fraud. As you evaluate vendors, look for a payment gateway that’s backed by a secure, reliable payment processing company. Also look for providers that offer services to help you proactively prevent fraud. It doesn’t just help protect your customers and your business, it also helps ensure you’re compliant with the Payment Card Industry Data Security Standard (PCI DSS), which sets rules for preventing, detecting and reacting to security incidents.
 

4. Limiting customers’ payment options

Today’s customers expect more options than ever, and not just in products and services. They expect to be able to pay online with a range of options. If your payment processor doesn’t allow for the flexibility customers demand, you might see an increase in abandoned shopping carts on your site. Choose a provider that can offer your customers plenty of payment options.
 

5. Going DIY with setup and support

Setting up multiple payment options can take a lot of time and effort if you’re not well versed in payment gateways and online checkout details. Finding a payment processor that can deliver easy setup on your site is imperative and backing that up with technical support is crucial. Every moment of downtime can impact your sales. You need a processor that understands those challenges and has a dedicated team to help support you on payment-related problems.
 

Choose wisely

Although searching for the right payment processing provider can seem like a big task, thorough research and knowledge of best practices can help you find the solution that fits your business.
 
Want to learn more? Discover The 3 Ps of payment processing before you kick-off your research.

 
The contents of this site are provided for informational purposes only. The information in this article does not constitute legal, financial, IT, business or investment advice of any kind and is not a substitute for any professional advice. You should always obtain independent, professional accounting, financial, IT and legal advice before making any business decision.
The contents of this site are provided for informational purposes only. The information in this article does not constitute legal, financial, IT, business or investment advice of any kind and is not a substitute for any professional advice. You should always obtain independent, professional accounting, financial, IT and legal advice before making any business decision.