A payment processor is an online service that you use to accept payments from your customers, usually through a credit card or bank account.
A payment processor is an online business tool that allows you to process and receive money on behalf of others. It’s also known as a gateway or merchant account provider.
Payment processors are used by businesses who sell products or services over the internet – for example, if you have a website selling books, you might want to be able to take payments directly through your site.
You can choose from many providers, each offering its own range of features and benefits.
When deciding on a payment processor, it’s important to consider what you need from them and how much they cost.
The most basic payment processors offer very limited functionality, but this is often enough for small websites with just one or two transactions per day.
If you plan to grow your business, then you may require more advanced features such as recurring billing, fraud protection, and multi-currency support.
This guide will help you decide which type of payment processor is right for you.
What Do I Need?
Before you start looking at payment processors, make sure you know exactly what you need from them.
Here are some things to think about:
- What kind of transaction processing do you need?
- Do you need to allow people to pay using a variety of methods (for example, credit cards, bank transfers, PayPal)?
- Do you need to charge VAT in multiple currencies?
- Are there any specific requirements around security? For example, do you need to comply with PCI DSS standards?
- How many transactions do you expect to process each month?
- Will you be accepting larger amounts of money than you currently do?
- Will you be doing regular monthly subscriptions?
- Is there anything else you need to know about your business before you start looking at payment options?
Once you understand these questions, you should be able to narrow down your search for a suitable payment processor.
Which Payment Processor Is Best For Me?
There are lots of payment processors out there, so don’t assume that all of them will suit your needs.
It’s worth taking the time to compare the various options available. You can find information about payment processors on sites like Compare Payment Providers and PayPal.com.
Some companies will provide free trials or demos of their software, so it’s always worth trying out a few different providers before making a final decision.
Some payment processors offer special deals and discounts to new customers, so it pays to shop around.
Finally, remember that you can always switch between payment processors later on if you change your mind.
So, once you’ve found a payment processor that seems to meet your needs, it’s time to look into the details.
What Features Does My Payment Processor Offer?
Every payment processor has its own unique features, but here are some common ones:
Recurring billing – If you run a subscription service, you can use a payment processor to automatically bill your customers every month.
Fraud protection – Some payment processors have built-in anti-fraud measures designed to protect against fraudulent payments.
Multi-currency support – Most payment processors let you accept payments in multiple currencies. This means that you can take advantage of the exchange rate fluctuations when converting customer payments into your local currency.
Payment gateway integration – Many payment processors integrate directly with third-party payment gateways, meaning that they work seamlessly with online shopping carts and eCommerce platforms.
Payment method selection – A lot of payment processors let you choose how your customers pay you. They often include pre-selected payment methods such as credit cards, debit cards, and bank transfers.
VAT – Some payment processors also handle VAT, which makes it easier for you to collect taxes in multiple countries.
Other features – There are plenty of other features that you might want from a payment processor. These include things like direct deposit, recurring invoicing, and email reminders.
What Fees Does My Payment Processor Charge?
Most payment processors charge transaction fees for processing payments. The amount charged depends on the type of payment being processed (e.g., credit cards, PayPal) and whether any additional services are used.
Most payment processors charge an initial setup fee, plus ongoing monthly fees.
The exact amounts vary depending on the provider and what services you decide to use, but most start at $10 per month.
You may be able to negotiate lower rates by signing up for longer-term contracts.
The good news is that many providers waive these fees during the first year of operation. So, if you sign up early enough, you could end up paying less than you would otherwise!
How Do I Set Up A Payment Processor?
Setting up a payment processor is easy. You just need to follow three simple steps:
Register with your payment processor – First, register with your chosen payment processor. To do this, simply visit their website and create an account.
Select your preferred payment options – Once you’re logged in, select the payment options that best suit your business. For example, if you sell physical goods, you’ll probably want to add a shipping option.
Create your merchant profile – Next, you’ll need to create a merchant profile. This allows your customers to access your payment information securely. It’s important that you keep your profile private so that only authorized users can view it.
Once you’ve completed all three steps, you’re ready to go live. Your customers should receive an email confirming that their payment has been accepted.
Can I Use More Than One Payment Processor?
Yes, you certainly can. In fact, there are several reasons why using more than one payment processor is a great idea.
Firstly, you can offer your customers more choices. If your primary focus is selling digital products or services, then it makes sense to use a payment processor that offers a range of different payment options.
Secondly, you can save money. By choosing a payment processor that charges low fees, you can reduce your overall costs.
Finally, you can increase customer satisfaction. When people have more choices, they tend to make better decisions.
Which Payment Processors Are Available?
There are hundreds of payment processors out there. However, not all of them provide all the same benefits. That’s why we recommend starting off with a few well-known providers before considering alternatives.
Here are some popular payment processors that you might consider:
PayPal – A global leader in online payments, PayPal has over 200 million active accounts worldwide. They also offer a wide range of other services including eCommerce tools, mobile apps, and data analytics.
Stripe – An alternative to PayPal, Stripe provides similar functionality while offering lower fees.
Braintree Payments – Another popular solution, Braintree allows merchants to accept payments from anywhere in the world. Their platform is designed specifically for small businesses.
2Checkout – Offering both free and paid plans, 2CheckOut is another highly recommended option.
Square – Square is another popular service that lets you take credit card payments through your smartphone.
GoCardless – With over 1,000,000 active accounts, GoCardless is a leading provider of electronic invoicing solutions.
In conclusion, setting up a payment processor is quick and easy to do. It’s important to make sure that you research which payment processor is best for you before setting up your account to ensure that you get the most out of your experience.
Paul Martinez is the founder of EcomSidekick.com. He is an expert in the areas of finance, real estate, eCommerce, traffic and conversion.
Join him on EcomSidekick.com to learn how to improve your financial life and excel in these areas. Before starting this media site, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.