How small businesses handle their payment processing was once a simple process: checks, cash or card and they were good to go. But while the digital age and mobile payments have offered consumers more flexibility in how they can pay, it also left merchants to do the heavy lifting and exceed ever-changing customer expectations.
Here’s where a payment service provider steps in to take part of the load off merchants, as they can help bridge the gap between modern businesses and the plethora of new payment methods available. Whether you’re running an online or physical small business, in this article we take the guesswork out of your research and help you figure out the right payment service provider for you.
What is a payment service provider?
A payment service provider (PSP) is a company supporting merchants with capabilities such as acquiring, payment gateway and merchant accounts which allow acceptance of different payment solutions (e.g. card payments, MOTO and alternative payment methods, etc.) across various channels. It is a PSP’s responsibility to ensure a transaction is securely and seamlessly completed from the moment a customer pays to the point when the funds reach your merchant account. In short, a PSP ensures the behind-the-scenes payment processes of your (small) business are taken care of by capturing and verifying transaction data before safely sending it via the payment gateway to your acquirer. This way, you have more time to focus on powering your business growth.
Choosing the right PSP could equate to more efficient and straightforward payment processing, thereby enabling you to reach a broader range of customers and boost your revenue while keeping abreast of payment innovations and evolving regulatory requirements. However, your business success isn’t just about delivering a smooth and secure checkout journey for your customers. It’s also about working with a PSP that “gets” your business model, has a growth mindset, and stands out with their one-on-one advisory that can help scale your small business.
What to look for when selecting a PSP
Sure, PSPs with an extensive payment options coverage and years of experience in the industry can give the merchant peace of mind knowing they have a trusted payments partner, but that’s not everything. What sets a good PSP apart is their values, proactive consultations, connection with their customers, in-depth analysis of payment data to identify optimisation areas, and many more.
Let’s explore some of the must-haves your shortlisted PSPs can’t make without (you’ll be surprised, as we won’t be touching just on their necessary expertise and knowledge).
Support
Accessing the substantial support you need should be a top priority when picking a PSP. A great PSP will deliver tech support that is available 24/7. Since a speedy and frictionless payment experience may result in customer satisfaction, it’s vital to get onboard someone who always has your back.
This kind of support could even go a step further and come in the form of consultancy on payment processing. From software and hardware infrastructure to being informed about key updates in regulation and compliance, and tapping into the latest anti-fraud capabilities, a good PSP should provide the resources tailored to your strategy and business goals that can accelerate your business growth.
Personable approach
PSPs that are in line with your vision are an asset for a business, let alone a small one. This may lead to lasting business relationships that can only be built when both parties work synergistically and passionately towards a common aim. For this reason, a personable, one-on-one approach should pervade every aspect of your partnership with a PSP, while communication is key in your in-between relationship. And despite the benefits of the technological evolution, it’s not ideal to only be met by a virtual assistant or generic support tickets over email.
The smaller the business, the greater the need for human interaction. A good PSP should be willing to understand the ins and outs of your business by picking up the phone and trying to get to the core of your query to help you solve it. One-on-one correspondence over a call with a real person that you know and trust is perhaps the most effective way to establish rapport and receive tailored customer service.
Price transparency
Processing costs play a pivotal role in your decision to partner up with a PSP. Transparency is critical and therefore a good PSP should be able to offer you a solution based on transparency. Pricing is critical, so choosing between two pricing options – interchange++ or blended – offers you more solutions to opt for the one that’s the most beneficial for your business.
The billing model of interchange fees is normally the most transparent one, as it breaks down all credit card processing expenses into three components: the interchange fees, the card scheme fees and the processing fees. By contrast, with blended pricing, merchants incur a collective cost without delving into the particulars of these charges. (Find out more about interchange fees in our article).
Reliability and trust
Trust in business, especially when payments are involved, is paramount; as hard as it is to earn it, so much easier it is to lose it. Who wants a PSP that over-promises better performance and a smooth partnership that yields more profit but underperforms?
An indicator of a trusted PSP is when they give you facts rather than assumptions – one that has a proven track record of customer success stories and counts many years in the industry. The reliability of a PSP is equally shown in how the provider treasures their business relations by investing time in customising their offering to the merchant's specific needs. Having a robust payments system in place is not enough. A good PSP will closely align with your business requirements and customer preferences in ways that support your growth and expansion.
Flexibility and security
Customer loyalty isn’t just about offering your customers’ preferred payment methods. With a good PSP, you’ll also have a range of flexible integration options for your eCommerce website at your disposal, ranging from a hosted payment page to a server to server integration and a client-side encryption. (This video will give you better insight into the different integration options so you can figure out the one that best suits your business).
All three integration options arrive with their own benefits. For instance, while a hosted payment page is suitable for businesses that have limited development resources and wish to save on PCI costs, the other two will better serve a business that works on more advanced coding and prefers to assume more control over their checkout page. Despite their differences, all of them are customisable to a large extent, so feel free to adjust your route to purchase – namely, the payment page – based on your brand's aesthetic for increased customer trust. (Find more about the different integration methods available in this article).
Partnering up with a trustworthy PSP is also about ensuring that the chances of them falling prey to fraudsters are slim. While security and PCI compliance requirements can be complex to wade through, PSPs can help you safeguard your small business and customers against fraud while removing a large part of the PCI liability from you.
It’s important to know what payment security resources your PSP provides that can guide you through the payment compliance process. Do they offer security monitoring and advanced anti-fraud tools to help mitigate threats? Do they leverage tried-and-tested techniques such as encryption and tokenisation? Chargebacks are another factor to take into account when working with a PSP. Whether they occur from fraud, merchant error, customer disputes or any other reason, chargebacks can be threatening to a merchant's bottom line and business longevity. It's significant to know the means that your PSP will adopt, such as data-driven insights, to help you manage chargebacks at their source and protect your revenue more effectively. (Learn more about chargebacks in our comprehensive guide here).
The bottom line is that with a trusted PSP delivering the right security measures, your small business can be better prepared to tackle and minimise security risks.
Why choose emerchantpay as your payments partner
There’s a lot to consider when vetting out a PSP that best fits your physical or digital small business. At first glance, all PSPs seem to provide the same service: enabling businesses to collect payments from their customers whether that’s in store, online and/or in-app. Well, that’s only the tip of the iceberg. If we scratch beneath the surface, it soon becomes evident that no two PSPs are the same. A trusted payments partner that supports true business growth is what Dough Boys Pizza saw in emerchantpay and chose us as their payment service provider. What started off as a card terminal for in-store transactions soon escalated into several mobile terminals to support upon-delivery payments, including a simple integration with the restaurant’s EPOS till system via emerchantpay’s Virtual Terminal for over-the-phone payments (MOTO).
At emerchantpay, we take pride in our one-stop-shop strategy and rich suite of features – from point of sale (POS) options and alternative payment methods to global acquiring and fraud management. Not only is our payments platform more easily scalable for deeper data analysis, but it also helps you understand customer behaviour and make more informed business decisions. With our transparency in services and customer-first attitude, we can complement your vision and be an extension of your small business as your trusted payments partner, so you can focus on doing more of what you love the most.
Get in touch with our team of payment experts and discover our end-to-end payment solutions that will allow your business to grow better.