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Essential Questions to Evaluate Online Payment Processors

Posted on Mon, July 27,2015 @ 9:46 AM

online_shopping_cart_w_-1You’ve decided to launch online payment processing for your organization, or maybe you’re not satisfied with your current provider and want to research alternatives.

Either way, when it comes to evaluating an online payment processor, your choice should offer the best combination of experience, service and value. There are over 5,000 payment processors in the U.S, so to help make your research go faster, start with these key questions:

Is there a difference in the type of payments that providers process?
Yes. Providers can process a variety of payment types, including retail purchases, service purchases, memberships, donations, event registrations, tuition and more. Make sure they process all the items your organization needs.

Are there niche providers?
Yes. Some work with particular groups like doctors’ offices, schools or churches, while others service a particular geographic area. Some may process payments for retail stores, contributions to nonprofit organizations, or donations to museums. That only begins to scratch the surface—however you choose to segment the market, there’s likely a payment processor servicing that niche.

Is there a wide diversity in online payment features?
At minimum, ask if the provider’s online capabilities include the ability to:

  • Accept one-time and recurring payments?
  • Accept payments by credit card, debit card and eCheck?
  • Deposit funds into different accounts—or even into different financial institutions?
  • Generate easy-to-post payment files and easy-to-read reports?
  • Offer the option to quickly change the message, funds, graphic scheme and more at no charge?

What are the qualities of a good customer interface?
The basic necessities for a customer interface are to make it simple, easy and user-friendly. Customers should be able to easily make online payments and set up email alerts. Additionally, they should be able to:

  • Choose their method of payment
  • Make one-time or recurring payments without setting up an online account
  • Receive a confirmation after their payment is received
  • Also receive an email confirming their payment

Your interface for a mobile device should be similar in design, but friendly for a smaller screen. And while paying by text requires extra steps for entering payment instructions, future payments should be as simple as texting the dollar figure to your number.

After payment is received, a confirmation screen should say “thank you,” and it should also:

  • Confirm the amount of the payment
  • Offer a link where your customer can create an account, allowing easier access for recurring payments

Is pricing straightforward and the contract flexible?
Pricing and contract length are important considerations in selecting an online payment processor. Look carefully at fees and compare. Among providers, you’ll see a per transaction fee, start-up fees, monthly fees and even some hidden fees (i.e., compliance fees, convenience fees and statement fees). Does the provider charge flat-rate pricing, tiered pricing or interchange rates? Also, pay close attention to contract length. While some providers require a long-term contract, others simply offer a month-to-month contract with no cancellation fees—allowing you to cancel without penalty.

What other integrations should I expect from a payment processor? Is software integration easy?
Choose an online payment processor that integrates seamlessly with your software systems for seamless front-end user experiences.

Other considerations include whether the service pre-authorizes and automatically accepts or declines payments, securely encrypts and stores credit card information, print receipts, sends email notifications to customers, and posts back to accounting, CRM or an order fulfillment system.

Are fund options versatile?
Businesses typically maintain different funds for different purposes. Operating funds, capital funds and more must be accounted for separately, and in some cases must be deposited into accounts at different banks. If all electronic payments were deposited into a single account, you wouldn’t be able to correctly assign them to the appropriate account. Providers should offer the tools to make it easy to properly account for every dollar.

Does money move securely?
When selecting a processor, there should be no compromise on security standards. Your short list should include providers who are compliant with Payment Card Industry Level 1 requirements. To meet PCI Level 1 requirements, providers undergo regular independent on-site audits and critical assessments to assure that credit and debit card transactions are being processed with maximum security.

Does money move quickly?
There should be no unnecessary delay in transferring funds. All eCheck transactions should be debited from the customer’s account and credited to your account within three business days. Credit and debit card transactions should be deposited into your account within 2-4 business days after processing. Some companies retain funds for several days or weeks before delivery.

Is money segregated at all times?
Funds should never be deposited into the operating account of a payment processor, commingled with its operation funds, held in an interest-bearing account for its benefit, or mailed to you by check to create float.

What kinds of support services are offered?
Choose an online payment processor that offers complimentary training and support for staff members. Support should be available for the life of the relationship, not just the first few weeks.

What are the reporting capabilities?
When it comes to reporting and analysis needs, an online payment processor should make your job easier, not more difficult. Flexibility is essential. Check that the providers you are evaluating offer a number of reporting capabilities. For example, can you generate reports based on date range, payment type and by customer? Don’t hesitate to request sample reports.

Does the provider offer additional launch and management resources?
To assist you in making your online payment program a success, look for a provider that offers a variety of tips, tools and resources for promoting online payments to your customers. For example, your processor should provide a guide with simple ideas for introducing electronic payments, and offer continued support through a blog and other assets that highlight success strategies.

Kevin Lee, the CEO of Vanco Payment Solutions, is responsible for the organization’s vision and ensuring Vanco’s clients and partners are able to electronify payments securely, seamlessly and simply. The Vanco-Logo-1company’s experienced team helps more than 30,000 clients across the U.S. conveniently, securely and efficiently accept a broad range of electronic payments, and more effectively manage their operations. Click here to learn more or to contact Vanco.



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