How To Select The Perfect Payment Processor For Your Company

Choosing the right payment processor can be make-or-break for ensuring smooth operations, increasing revenue, and delivering exceptional customer experiences.

Yet with so many options on the market promising fast payments, robust platforms, and competitive rates, narrowing down the best fit for your specific business needs is tricky.

This comprehensive guide breaks down the key nuts and bolts criteria you should walk through when objectively evaluating payment processing solutions. Follow along for tangible, actionable advice tailored to your organization’s payment volume, growth forecasts, compliance needs, and more.

With the ideal payments processor properly vetted, you’ll be empowered to provide the secure, seamless experience that today’s customers expect while future-proofing your systems.

Table of Contents

Consider Your Industry and Business Model

Payment processing requirements can vary a ton depending on your specific business model. An eCommerce retailer will have very different needs than a local dentistry practice, for example.

Before evaluating any vendor solutions, take a step back and objectively examine your organizational needs:

What industry are you operating in? SaaS subscriptions? QSR and restaurants?
What commerce channels or revenue streams do you use? Online payments, in-store POS, recurring invoices, international?
What purchase volume and order sizes are typical? High frequency, low ticket? Large enterprise contracts?

Getting crystal clear on these basics will help you determine must-have features when comparing providers and narrow down the best fits.

Assess Your Processing Volume and Sales Forecasts

This one trips up a lot of businesses. Make sure to accurately forecast both your current monthly payment volume, as well as how rapidly you expect that volume to grow over the next 3-5 years. Having concrete numbers here is key.

Take the time to thoroughly analyze any seasonal fluctuations or sales cycles as well. Processing too little or too much volume can result in a payment partner that doesn’t scale well or fully meet your needs. You want to land on a processor purpose-built and tailored to precisely where you are now and where you’ll be in the coming years.

Overestimating your volume isn’t ideal either, as you may get locked into higher rates than truly required. Do your homework here, and it’ll pay dividends down the road through cost savings or negotiated concessions. Plan thoroughly and forecast smartly.

Compare Fee Structures and Rates

When comparing potential payment processors, one of the most important aspects to analyze is their fee structures and rates. There are typically two primary pricing models offered:

Flat-rate pricing: Charges a single bundled fee per transaction, regardless of the card type. This is simpler for forecasting fees.
Interchange-plus pricing: Passes along the underlying interchange fees set by the card networks plus an additional per-transaction fee. More complex, but can offer cost savings at scale.

You also need full visibility into all other fees – authorization, funding, chargeback and PCI non-compliance fees can really add up. Thoroughly comb through pricing statements for any hidden ‘gotchas’.

And if you drive significant payment volume, negotiate for custom rates. Every basis point of savings counts towards your bottom line. Lock in the most competitive and transparent rates possible.

Review Platform Compatibility

In addition to costs, you also need to evaluate how seamlessly a prospective payment processor will integrate with your existing software stack. Assess factors like:

Accounting software: Will the payment system sync transaction data directly into your accounting platform? What level of automation is supported?
CRM, support systems: Can customer payment histories and profiles integrate across systems?
Ecommerce platforms: If running an online store, does the processor easily plug into your existing checkout flows?
Customization and APIs: Is an API available for any custom development needs? How open and developer-friendly is their platform overall? Can it grow with your tech roadmap?

The goal is to land on a processor that plugs seamlessly into your workflows, keeping a steady pulse on key payment data across platforms while minimizing manual work for your teams.

Verify Security and Compliance Standards

Security should be top of mind when searching for a payment system. After all, customer payment data is highly sensitive. As such, you need to vigorously vet prospective vendors to ensure they meet key protocols like:

PCI DSS Compliance: The Payment Card Industry Data Security Standard (PCI DSS) provides a framework of best practices for securely handling cardholder data. An ideal processor should have up-to-date certification.
Encryption and Tokenization: End-to-end encryption protects payment data in transit while tokenization safeguards data at rest. Verify what standards a processor adheres to.
SOC Audits: System and Organization Control audits demonstrate effective safeguards are in place internally at a provider as well. Request audit reports from vendors for additional assurance.

By proactively confirming regulatory and security qualifications, you remove significant risk in outsourcing payment operations. Keep standards high – new threats emerge daily.

Research Customer Support and Reputation

When evaluating payment processors, you need to look beyond just technical qualifications – the provider’s reputation and customer service track record also matters hugely.

How responsive are their support teams based on reviews and your own tests? If you suddenly experience payment issues, will they have knowledgeable agents ready to swiftly resolve inquiries? Years in business and financial stability should be reviewed too – you want confidence they can meet your needs for the long haul.

Just as importantly, see what current and past clients say. Customer testimonials and case studies from organizations similar to yours give invaluable perspective into real-world performance specifically for your business model.

If other retailers or SaaS companies are raving about strategic guidance received, that suggests genuine expertise versus generic at-scale support.

Closing Words

Of course nothing beats hands-on testing, but hopefully this high-level guide has given you a good framework to thoughtfully evaluate payment processors. Finding the right fit will help ensure smooth sailing as you navigate the ups and downs of running a business.

With your new partner in payments by your side, you can feel good knowing you’ve optimized for growth in both the short and long-term.

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