COMMENTARY: Cut-Rate Processing Can Mean Diluted Services

By Dave Yohe

Selecting the right partner to process payments is essential for organizations taking payments directly from consumers. While it might be tempting to choose the provider offering the lowest rate, the short-term gains from saving a little money can risk longer term business revenue. In the following paragraphs are the key questions to ask when selecting a payment partner.

When it comes to payments, data security is key. Ratings and certifications matter. It there’s no sign of them, it’s likely they don’t have them. Or, at best, it isn’t meeting a very good standard. The ones you want to check for are Payment Card Industry data-security standard certification, compliance with the Statement on Standards for Attestation Engagements and the Health Insurance Portability and Accountability Act, and a Better Business Bureau rating

Meeting Consumer Financial Protection Bureau requirements is becoming more demanding each year . Partnering with a processor with a chief compliance officer who oversees a compliance and risk team demonstrates a commitment to meet requirements across all industries.

What to ask:

–Does the processor offer its clients compliant merchant services and payment technology to help them navigate regulatory change?

–How has the partner dealt with increasingly demanding compliance requirements? Can the processor’s technology provide the full level of reporting required?

–Does the processor have experience of compliance challenges in your industry?

Reliable service is crucial. Not only will customers be frustrated if they try to make a payment and can’t, but your business will suffer from the lack of payments. A partner with an in-house gateway or relationships with multiple payment gateways gives that partner more control and means it isn’t reliant on a single third party.

Knowing which banks the partner has relationships with can give you a better understanding of how important and reliable its banking network is likely to be. A partner with a wide network means if one bank goes down, you won’t be left unbanked.

What to ask:

–Does the partner have multiple options when it comes to payment technology to ensure your stability?

–How many sponsor banks does the partner use?

You’ve signed a contract and everything appears to be going great. Then, the bill arrives at double the expected cost. Having a full breakdown of the services included in the fee can stop you from getting hit like this somewhere down the line. It also allows you to work out the real value of the rate.

What to ask:

–What exactly do the fees cover (authorization fees, gateway fees, PCI compliance fees, return/refund fees, monthly minimums)?

–Can the partner tailor fees so the coverage meets the needs of your organization?

As your business grows, your payment needs are likely to change. A payment partner with the ability to meet your evolving needs can save you a lot of time and hassle in the long run if you later decide to integrate additional payment options.

As technology develops, customer preferences change. Industry research can help payment partners benchmark trends, pain points, and operations, giving them valuable insights into payment preferences across different industries. Having a partner that uses research to inform development of its payment technology is a huge value-add.

What to ask:

–How is the partner investing in future technology? Does it have the capabilities to meet your changing needs?

–Can the technology help manage your business (for example, developing reports that can answer key performance indicator queries and generate customer-payment history)?

A payment-technology partner that is invested in your needs will help improve current client relationships while preparing you to accept new business. Great value comes when full-service payment partners go above and beyond to ensure you get the processing, compliance, reliability, and technology you need for success.

—Dave Yohe is vice president of marketing at Phoenix-based BillingTree .