When it comes to choosing a payment service provider you’ve certainly got quite a few to choose from. However before you make that all important choice, it is worthwhile to look into how much the service will cost you. There are a number of costs associated with using a provider like this, so it makes sense to understand the ins and outs upfront.
Aside from the possibility of paying set up fees to get your PSP account up and running, you then have to consider the monthly costs associated with each provider.
Typically speaking you will be charged a flat monthly fee for using the service. This can vary by a few pounds depending on which provider you choose. Check the small print too so you know whether the price given includes VAT or not. Often you’ll have to add this on top. Many payment service providers will include a specific number of transactions every month free of charge within this payment. If you go over this number you’ll pay an additional fee per transaction. This will usually be a few pence, and while it doesn’t sound like a lot, it does add up when you make plenty of sales on a monthly basis.
This means you need to weigh up the pros and cons of using a particular provider that offers a certain number of free transactions in their monthly fee. If you already know roughly how many sales you make each month, this should be easier.
All businesses are vulnerable to fraud to some extent, which is why you must take every logical step you can to protect your business against fraud. Choose a PSP that has an excellent record in combating fraud. You should also make sure you take all necessary steps, such as implementing the Verified by Visa and Mastercard SecureCode systems on your website. This makes it harder for someone to use someone else’s credit card fraudulently.
If someone does do this when ordering from your business, you may be held liable for the transaction – and that means you’ll have to pay for it. This will damage your reputation and your income, so you can see how important it is to minimise fraud risks as much as you can.
Charge backs take place when the money for a customer order is taken back out of your bank account. This can occur if a customer cancels an order or obtains a refund. However it can also occur if a customer has paid through fraudulent means.
The payment service provider typically assesses your turnover and retains a proportion of it to cover these situations. The percentage kept back varies depending on the individual provider, but it isn’t normally much more than about 5%. It is in your best interests to avoid charge backs, although of course you will need to refund a percentage of your customers who wish to return goods. This cannot be helped, but you don’t want your charge back percentage to go too high as it can damage your business and reputation.
All businesses are required to comply with the PCI Security Standards. PCI stands for Payment Card Industry. This basically means you must ensure all information relating to credit and debit cards used to pay for goods or services you provide is kept safe. There are different rules for different businesses; a small independent online store would not have to follow all the same rules as a large multinational corporation.
When choosing a payment service provider it is extremely important to consider the services they provide in helping prevent fraud and non-compliance. Top quality security measures and support in ensuring all payments processed are compliant with PCI measures are more important than cheap rates. Bear this in mind and always check the small print when comparing one provider against another.
You can see it is wise to spend more to get an outstanding service than to try and save some cash by going with an average one. Your business reputation is dependent on it, and people will only order from your business if they feel their card information is 100% safe and secure.