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Common mistakes to avoid in choosing a payment processor
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 daunting. Check out these common missteps to ensure you make the right choice. (And download the free “7 common mistakes to avoid when selecting a payment processor” whitepaper for even more information.)
Mistake: Failing to read the fine print regarding rates and fees
When comparison shopping for a credit card processor, keep in mind that a low rate doesn't always mean a low overall cost. A lot of processors have high processing fees and even variable rates that can make it hard to tell what you’ll really be paying.
For example, most credit card processors charge higher rates for what they call "non-qualified" cards – such as corporate and rewards cards. These cards earn customers airline miles, loyalty points, or cash-back bonuses. They’re pretty popular, and a lot of your customers probably use them, so finding out that these include a higher rate can be an unpleasant surprise. Look for a processor that charges based on a flat rate to avoid the shock. (For a full breakdown of these types of rates, see “Demystifying payment processor fees.”)
Mistake: 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, including security, technical support, and cost.
In the same vein, look for a provider that won’t unnecessarily block access to the money you’ve earned. The best providers will work with you to quickly approve valid sales that might trigger fraud alerts.
Mistake: Ignoring security and fraud protection
Data breaches have hit retailers large and small, and customers now demand the best protection possible to lower their risks of card fraud. As you evaluate vendors, look for a payment gateway that’s backed by a secure, reliable payment processor.
Also look for vendors that offer services to help you proactively prevent fraud. It can not only help protect both your customers and your business, but also help ensure that you'll be compliant with the Payment Card Industry Data Security Standard (PCI DSS), which sets rules for preventing, detecting, and reacting to security incidents.
Mistake: 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, and if your payment processor imposes limits on what you can accept, you might see an increase in abandoned shopping carts on your site: One study showed that 24 percent of online customers abandoned their transactions because a site didn’t offer their preferred payment option.1 That’s huge! Don’t risk it – choose a provider that gives them plenty of choices.
Mistake: 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 credit card processor that can deliver easy setup along with your account is imperative, and backing that up with technical support is crucial. Every moment of downtime potentially lowers sales. You need a processor that understands those challenges and can deliver round-the-clock support for payment-related problems.
Although searching for the right credit card processor can seem like a big task, thorough research and knowledge of best practices can help you find the solution that fits your business.
Want more? Download “Seven mistakes to avoid when selecting a payment processor” for additional information.
- 1 Listrak, “Cart Abandonment,” 2014.