Things to Look for in a Payment Provider

Posted: June 2022

Payment technology is big today thanks to the vast uprising of cashless transactions, but we’re guessing you knew that already, considering you clicked on this article.

It’s not a secret that there are plenty of payment providers to choose from too, which is becoming harder for business owners, since they are offering different rates, packages, and/or other special offers.

Let’s break it down first before we proceed.

What is a payment provider?

As you can probably guess from those two words, a payment provider is a company that facilitates a business or institution’s payment acceptance capabilities, specifically ones that are for credit, debit, and mobile wallet payments.

Over the years, we’ve seen the providers’ offers expand due to the constant changes within the industry, mainly in technological advancements. The one-upping is non-stop, mostly on offers, flexibility, and the overall technology itself.

That, of course, begs the question: what are things that business owners should look for in a payment provider? There’s a couple, and each is just as important as the others.

Digital payment acceptance flexibility

Payment acceptance flexibility refers to a system’s level of availability in digital processing payments, regardless if it’s made through a payment terminal, payment gateway, or mobile phone.

The list of payment methods includes cards (credit, debit, and loyalty) and QR codes. Take note of the accepted card networks and mobile wallets.

You should be able to process and accept a wide portion of the field. It’s best that it has an extensive list beyond VISA and Mastercard for cards, and GCash and GrabPay for QR codes.

Payment terminal leasing/purchasing

Acquiring a payment provider’s services for face-to-face payments usually includes a payment terminal that will have a monthly rental/leasing bill separate to the transaction fees.

As such, the key is to find the best and cost-effective rates, both for the transactions and the terminal, especially if you’re only planning to use the device temporarily.

If the plan, however, is to use it permanently, it’s highly recommended that you purchase a payment terminal outright. You should be able to find a provider that also sell devices, like what we do here in our OnePOS solution, where terminals can be bought after a 12-month installment or a full, one-time payment.

Back-office tool

This is one of the often-overlooked items on the checklist, mainly because it’s payment acceptance that’s at the forefront – as it should. That doesn’t mean it can be forgotten, though.

Back-offices in general are used to store data for various data-managing activities. In the digital payment world, it’s a cloud and browser-based tool where you can manage and monitor transactions in real-time, among others. Think of it as the store owners’ digital assistant.

Our back-office is an expanded version of the norm. Beyond transaction management, businesses can also generate voucher codes, apply for more payment solutions, and perform other related managerial duties.

Settlements

It’s the processing of sales made from the payment terminal, mobile wallet app, or online payment gateway, which leads to the business/store receiving whichever amount.

It may take up to more than a week to complete (five or more business days), but it will likely depend on the quality of the payment provider – leading providers can do it as fast as T+1, or one day after the transaction was made. If they’re that good, they can even facilitate the settlement with your bank of choice.

Overall, however, it’s still best to find the ones who can offer a fast turnaround and safe settlement process.

Security

Everything hinges on security, so it goes without saying that you should look closely at how strong it is. Not doing so will cause a host of problems for your business and your customers – but mostly your business.

There are different ways to apply encryption, and as such, you’ll see the variety within payment providers. While it may come down to which encryption you think is best, it’s recommended that have one that offers complex, end-to-end protection, which is what we use here in VeritasPay. The more ‘walls’ the better because hackers are simply relentless.

Further, always see to it that the provider is in full compliance with the latest guidelines set by the Bangko Sentral ng Pilipinas (BSP) and Payment Card Industry (PCI), the international standard for card security.

Merchant Discount Rate (MDR)

MDR is the percentage-based fee that providers bill to merchants for every card and QR code transactions. It ranges from 2% to 3% percent among most providers.

It’s a competitive area within the industry, so you may find yourself receiving friendly offers. Be sure to go through the terms carefully as it will affect your profit.

Check our pricing table here.

Customer support

Issues can be inevitable at any turn, so it’s always a must to be assured that your provider is giving you the right support you need, both for technical and non-technical stuff. Having such help avoids any trickling down of issues that can lead to huge hassles for your business, sometimes even for your customers.

The level of service for such also varies, and the key thing to keep in mind is it’s not just about around-the-clock availability. You should also consider how widely reachable they are – it’s great if they can be contacted in multiple methods: phone call, email, chat, etc.

IN CONCLUSION: The Venn Diagram

Finding a great fit can be handful since you are dealing with money, information, technology, and business, as well as whatever is born out of its demands.

Ultimately, though, the key is to measure things through a Venn Diagram, where you will be able to find the balance between two aspects. In this case, one side can be rate or time of settlement, etc., while the other is constant: quality.

Simply put: Don’t get too fixated on one area. Regardless of which item above are you looking for, get the best of both worlds.

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As VeritasPay continues to provide high-quality payment solutions and promote cashless transactions, the company is also dedicated in bringing in fresh and informative content. We’ll be continuing to share new articles about our products, services, and varying subjects within the industry as we move forward.

Contact us here to know more.