With more and more businesses going digital, online payment systems are becoming an essential part of doing business. Even if you operate a bricks-and-mortar store or sell services rather than products, being able to accept digital payments makes it easier for your customers to pay you, so will only boost sales and increase your revenues.
Modern online payment systems are capable of not only processing debit and credit cards, but also accepting other forms of digital payments such as platforms like PayPal. The online payment system you choose will determine the currencies you can accept, how fast money will be deposited into your account, the transaction fees, and the payment methods you’ll be able to accept.
All of this means that the payment system you choose can make or break your business, so it’s crucial to choose the right online payment system.
Cost
Your budget is an essential factor to consider when choosing an online payment system. It’s important to keep both set up costs as well as recurring fees in mind when comparing costs of different systems. These services typically involve installation fees and monthly service fees.
Some systems charge a fixed rate per transaction, while others have variable fees based on a percentage. Neither of these models is inherently better than the other – the right choice will depend on your business, the products you sell, and your customer profile.
Security
Intentional or unintentional data compromise can expose your business to serious legal problems. Most countries now have strict laws in place to ensure the protection of customers’ private information. Therefore, when choosing an online payment system, it is important to consider the level of security it offers.
Your customers have to enter their personal financial information when making online payments. If your payment system fails to meet the recommended gateway standards, or at very least the minimum protections set by law, your business could run the risk of a serious data breach.
It’s important to understand all relevant data privacy regulations, such as screening tools and security protocols, before you offer online payments to your customers. It can be a good idea to consult an expert to make sure you’re across everything.
Features and Payment Methods
Another factor to look for is whether or not the online payment system you’re considering accepts your customers’ preferred payment methods that your customers prefer. Debit, credit cards and eWallets such as PayPal are generally the preferred payment methods on a global scale.
However, it’s also important to consider your target customers – if you’re targeting specific local markets, they may have specific payment methods they prefer to use. Do some research into your target markets and how they like to pay. Customers may support local alternatives and your business will need to adapt to these to achieve targeted conversion rates.
Transaction Limits
Most new businesses don’t need to worry too much about limits on monthly transactions. However, if you want your business to grow, growth means more transactions to be processed every month.
Therefore, with a long-term view it’s important to choose a payment system that can meet your business’ needs as it grows in the future. Most online payment methods offer multiple plans divided into low, medium, and high tiers based on the number of monthly transactions to be processed. This is a good opportunity to start on a lower tier and grow your plan as your business grows.
Integration
Integration is another essential factor – being able to integrate your online payment systems with your bookkeeping tools will make your operations so much more efficient. If you set this up correctly, you can integrate automatic invoicing, credit notes, tax calculations, refunds, reversals, disputes, and adjustments, all of which is a huge time saver.
However, not all bookkeeping systems can be integrated with every online payment platform. Contact your bookkeeping software’s support team and ask for the list of payment methods the software supports. Alternatively, you could consider switching to a new bookkeeping tool that will integrate with your new online payment system.
Holding Time
In these set ups, funds are typically held for a few days before it is sent to your bank account, even though payments are generally confirmed pretty much instantly. However, holding periods are needed to enable processing of refunds and charge-backs. Depending on the service provider, these holding periods can be anywhere between one and seven days – so this could make a big difference to your business’ cash flow!
Automatic Billing
If you sell subscriptions or are considering doing so in the future, your online payment system should be able to handle billing transactions. This functionality is essential to avoid time-sucking manual processes and inconvenient payment intervals.
The provider you choose should be able to record and preserve client information for future transactions, automatically charge credit cards on preset subscription schedules, and give retry options for unsuccessful transactions, among other services.
Final Thoughts
It’s important to do your research and compare various online payment gateways to find the best choice for your business. Be sure to consider integration, fee structure, automatic billing, security, and features. This will help you to find the perfect choice for your business that will grow with you!
