Choosing a online payments supplier? The best advice is to do your research, but what exactly should you be looking for? Read on for some sage advice.
By Masha Cilliers of Payment Options Ltd
1. Local or International: In which markets will you sell? If it’s UK only, there are local UK Payment Service Providers who can be very cost effective, but they may not have the international coverage and bank connections which you would need in order to sell cross border
2. Projected Volumes: Identify your expected turnover, average transaction value and any foreign currency business. Those will be the first questions a payment service provider will ask, and most of them have a set criteria of size of merchants with whom they will work.
Thus if you don’t predict very high volumes in initial years, don’t waste your time on PSPs who focus on enterprise or large business only
3. Banking Relationships: What are your existing banking relationships? Some banks offer PSP gateway service via ‘whitelabelled’ partnerships some have their own services. Also, when speaking to a PSP you need to make sure that they are connected to your bank if you intend on keeping the acquiring relationship with the bank
4. Gateway or Acquiring: Majority of PSPs offer Gateway services, which means a technical processing solution where your funding relationship is still with your acquiring bank. However, some offer what is called Full Service/Master Merchant/ISO.
In this case the PSP acts on behalf of the Acquirer and you get your merchant account directly with them. The latter option can give more flexibility in terms of acquirers and also cross border connections as you don’t need to have your own relationships with all the banks
5. Payment Types: Have you considered whether you want to accept just debit and credit cards or also alternative payment methods such as Direct Debits, Faster Payments, PayPal and other wallets, Bank transfers and so on. Different PSPs have varying portfolios of payment types they can offer their clients.
If you feel that you need alternatives it’s better to go with the one that already have the payment types you need, as adding them to the portfolio can take time and need a strong business case or finance
6. Fraud Screen: Are you also looking to get a fraud management system from your PSP or do you have one already in place? Whilst most PSPs have some kind of fraud management offering, some are much more in-depth than others and also some may not work with other payment providers.
Include fraud management in your RFP process to find out more about how it works and with which PSPs it is compatible
7. Vertical: Does your business fit into a particular sector: Travel, Digital Goods, Retail other? There are payment service providers specialising in particular verticals and you may get much better understanding of your issues and requirements by selecting a PSP with experience in your sector
8. Chargebacks: Do you have a chargeback and dispute resolution system in place? Some PSPs will offer this service, there are also standalone packages you can purchase and manage this in house. Chargebacks can be very expensive especially in the online sales if you don’t plan for managing the process upfront
9. WebPlatform and Shopping Cart: Are you using a web building platforms such as Magento, Oracle, Demandware etc or a shopping cart? If so, find out which PSPs are connected to them as this will limit your choice of PSPs.
If you can get integrated to a PSP via your chosen webplatform or shopping cart, it means a lot less technical work for you, but the payment types could be limited to those that are pre-integrated, while direct connection to the PSP could give you all the options.
10. Integrator: Will you be integrating with the PSP and/or WebPlatform yourself or using an integrator/technology company? In the latter case they may also have experience in working with particular Payment Service Providers, so make sure you have the conversation with them before committing yourself to a PSP
And if you have more questions, please contact Masha through Payment Options Ltd
