Selecting the right payment processing software is crucial for any business aiming to streamline transactions and enhance customer experience. This decision impacts everything from compatibility with existing systems to security features and customer support.
You should consider factors like integration capabilities, user experience, scalability, and pricing structures, to ensure a seamless and cost-effective payment process.
It can be an overwhelming process, especially with so many options in the market.
Dive into our comprehensive guide to learn how to choose the best payment processing platform tailored to your business needs, and discover best practices for a smooth migration to your new provider.
TL;DR
- A payment processor is one of the most important components of your tech stack.
- When comparing the payment service providers, you must consider factors like compatibility, security, payment methods, cost of equipment, processing fees, and room to scale to ensure you are making the right choice.
- Migrating from one payment service provider to another is not always a seamless event, and our 9-step process will help you avoid missteps along the way.
Factors to Consider When Choosing Payment Processing Software
Below are factors you must consider before choosing a payment processing software platform for your business.
Compatibility and integration
Your new payment provider must integrate seamlessly with the hardware and business management software tools you currently use to run your business.
This is important because some providers restrict users to their branded hardware, and if you have your hardware already, making the switch will impose unnecessary costs.
You may be better off with a platform-agnostic payment processing software like Stax Payments, which works with a number of leading solutions.
Also, Stax integrates seamlessly with thousands of third-party apps, including all the popular CRM, marketing, and financial apps used by most businesses.
User experience and interface
The platform should be easy to set up and you shouldn’t need technical skills to get it up and running.
It should also have a user-friendly interface, so you won’t have to invest extra financial resources and time on expensive training programs learning how to navigate the platform.
For example, Stax’s user-friendly interface makes it easy to manage and track your payments. You can also use the analytics and reporting features to easily identify areas that need improvement in your financial operations.
Scalability and flexibility
You should look for a provider that offers scalable pricing plans and platform features that can support the evolving needs of your business as it expands over time.
For example, Stax offers lower transaction fees for high transaction volumes. This means more cost savings as your business grows.
It also gives you the flexibility to terminate your contract anytime (not that you would want to) without any additional fees or contractual limitations.
Supported payment methods and currencies
We are in an age where businesses must offer a wide range of payment options to keep their customers satisfied and reduce cart abandonment.
You should avoid payment providers that are overly focused on card-present transactions if your target market is increasingly demanding more convenient payment methods like e-wallets, mobile payments, and cryptocurrency.
In fact, data from Statista shows that by 2026, 56% of eCommerce payment methods will be digital wallets, and only 26% will be credit and debit cards.
Also, if you sell globally, you are better off using a payment processor that supports local payment methods in your target international markets.
Transaction fees and pricing structure
The cost of your payment processing fees can have a notable impact on your monthly revenues. You want to avoid hidden fees and a pricing structure that is not cost-effective for the current stage of your business.
For hidden fees, read the fine print to see if there is a maintenance fee, inactivity fee, cancellation fee, early termination fee, and most importantly, a bogus chargeback fee.
The right pricing structure will depend on the stage of your business. Smaller businesses making occasional monthly sales will do fine with a provider offering a flat-rate pricing structure, while high-volume businesses are better off with a company like Stax that doesn’t charge any markup on interchange fees and helps you save money the more revenues you earn.
Security features
Your payment services provider must be PCI-DSS compliant as a bare minimum requirement, and it should have other robust security features that are standard practice in your industry niche.
Also, given the scope of fraudulent customer disputes business owners are facing today, you will want your provider to offer extensive fraud detection and chargeback protection features.
Customer support and service
Excellent and prompt customer support ensures issues can be resolved quickly. It will help prevent prolonged problems that can negatively impact your sales and reputation with customers.
You want to look for a processor like Stax that offers 24/7 phone, email, and live chat support. It also provides extensive online documentation that you can use to find answers to your questions and resolve basic problems on your own.
Best Practices for Migrating to a New Payment Processing System
Below is a nine-step process that will help you switch to a better payment-processing software platform without any major disruptions to your business.
Step 1: Review your current setup
Examine what works and what doesn’t in your current payment process to identify the hardware and software features you will require from your new payment processor.
For example, if your developer has created custom features for your platform using the API of your current provider, you must ensure similar features can be easily implemented on your new software.
Step 2: Go through your existing contract
Your current provider may have included restrictive termination clauses in the contract like a notice period or early termination fee. A seamless switch won’t be possible without the cooperation of your current payment processor, so, you must first resolve any relevant contract issues.
Step 3: Backup your existing payment data
We all hope for a hitch-free data transfer, but that’s not always the case. And the risk of losing your customer data and transaction history is too great to ignore.
Make sure your data is backed up accurately and securely to a third-party data vault service before closing your current merchant account and migrating your data to a new provider.
Step 4: Create a contingency plan
You will ideally work with both your current and new provider to ensure a seamless migration, but it may also be prudent to keep your current platform online in parallel with your new system for a while, until you are sure there is no data loss or corruption in the data transfer process.
Step 5: Reach out to your bank
Be sure to contact the financial services provider holding your merchant bank account to give them a heads-up about your upcoming switch. A timely notification will help them quickly make the necessary adaptions to changes caused by your new payment processing routine.
Step 6: Initiate the change process
You can go ahead and ask your current provider to transfer your payment data in its entirety to your new platform once you have taken all the five preceding steps.
Try to cause as little disruption as possible to your business by making the switch at the time you know it will have the least impact on sales and customer experience.
Step 7: Run extensive tests
Before going live, run multiple tests to ensure all your payment processes function as well as expected. You may also need some time to train your staff on the new platform before introducing it to customers.
Step 8: Go live and monitor customer feedback in real-time
You can now introduce your new payment processing platform to your customers, while keeping a close eye on any issues that may be raised by your customer base once you start accepting payments.
Step 9: Analyze performance data and continuously improve your processes
Constantly monitor analytics data on the dashboard of your new platform and keep an eye on metrics like transaction success rates, error messages, and processing speeds to quickly spot areas where things aren’t going as planned.
Also, your work doesn’t stop with a successful migration. You must continue to keep track of new developments in the payments industry so you can always adapt in time to the ever-changing tastes of your customers.
Emerging Technologies and Trends in Payment Processing
- AI-powered fraud detection tools: merchants and payment providers are accumulating vast amounts of data from each transaction. With the growing use of machine learning models in the industry, that data will make it easier for AI to help identify and counter fraudulent activities.
- Ever-growing adoption of contactless payments: tap-to-pay online payment processing technology like Apple Pay and Google Pay is increasingly preferred by younger buyers over physical credit and debit cards. This trend will only continue to grow.
- The quiet emergence of micropayments: this payment method is an alternative to the traditional recurring subscription model, and it involves small, incremental payments—usually less than a dollar—made online for a digital product or service. It’s one to watch out for since it comes with advantages like lower transaction fees and more sales from impulse purchases.
Choosing the Right Payment Processing Software for Your Business
You have learned a lot about the feature sets, payment models, and core strengths of the 10 providers explored in this article.
Not all of them will offer the right package for the specific needs of your business, so, you should compare them using the factors outlined in the second section of the article till you identify your favorite platform.
Once you make your choice, follow the nine-step process to switch seamlessly to your new provider.
FAQs About Payment Processing Software
Q: What is the most cost-effective payment processing software for small businesses?
The most affordable platform for your business will depend on your budget, transaction volumes, and the features you need. An occasional seller will be fine with a provider offering flat rates that are only imposed when you earn, while a high-volume seller will save more money by opting for a subscription-based provider that works to offer the lowest possible rates with zero mark up. That way, the cost savings will subsume the cost of the subscription and become even more beneficial with higher earnings.
Q: How do I determine if a payment processor is secure?
The payment services provider must be PCI-DSS compliant as a bare minimum requirement to ensure protection from cyber threats.
It should also have clear-cut policies and fraud detection features designed to protect your business and customers from fraudulent activities.
Q: What are the signs that I might need to switch my payment processing provider?
When you start to notice issues like poor customer support, long restrictive contracts, unspecified hidden fees, poor compatibility with your most important third-party tools, and most importantly, a per-transaction fee structure that is simply too expensive, then you need to start looking for another payment provider.
Q: Can payment processing software help with mobile payments?
Any quality payment service provider will provide a virtual terminal or mobile app and a card reader to help you process mobile payments. You will also be able to process payments from digital wallets like Apple Pay and Google Pay.
Q: What support should I expect from a payment processing software vendor?
From the get-go, your credit card processing company should assist you with the process of migrating from your current platform and guide you through the onboarding process.
Once you are up and running, the vendor should ideally provide 24/7 customer support, including email, live chat, social media, and phone support.
