Global retail eCommerce sales in 2022 are forecasted to touch $4.921 trillion. If you’re a business in the digital space, you need to offer your customers a phenomenal end-to-end experience. Any visit to your site should culminate in a smooth payment process that results in greater convenience for your users and increased revenue opportunities for you. This is achieved with the help of a payment service provider (PSP) that can handle your business needs. That's why choosing the right PSP is so important.
A payment service provider, or PSP, is a regulated financial institution that acts as a payment Acquirer and helps merchants to receive online payments using different payment methods, such as credit cards, eWallets, mobile payments and more. This type of acquiring solution enables merchants to accept payments online, and provides necessary tools for managing their transactions.
Partnering with a PSP removes the headache of setting up these connections yourself, especially when dealing with global operations.
The benefits of finding the right service provider for your online payments include:
Online payments now become very easy to handle;
Compliance and data protection is taken care of by the PSP, meaning you don’t have to worry about payment data;
When you accept more payment methods, you’re promoting financial inclusion, which increases your customer base;
A PSP manages security and helps you to avoid fraud;
The access you get to report data and analytics can help you to manage your accounts more efficiently.
What to consider when choosing a payment service provider?
Accepting payments online through a secure and reliable platform is important for your business to succeed. However, approaches to accepting online payments are constantly changing and evolving. That's why it's important to make sure your system is flexible and able to add new payment methods.
There are a number of factors to consider when choosing a payment service provider. Here are some key points to tick off your checklist when choosing a PSP for your business.
The process of integration with a payment service provider can be time-consuming and expensive. To mitigate this, you can opt for simple prebuilt payment plug-ins designed for eCommerce platforms, including Magento, WooCommerce, PrestaShop or OpenCart. It is simple enough for you to run such integration yourself, without involving a development team. This drastically reduces the time it takes to integrate a payment solution for your business and can take as little as 10 minutes ! Make sure to always choose a PSP that provides simple and straightforward integration options.
2. Pricing Model
‘Pricing’ refers to the fee that payment service providers charge merchants for transferring funds. It is therefore important that you understand how pricing works for the PSP you choose. There are two ways you can approach pricing:
Flat rate: agree on a fixed price per transaction;
IC++: tie the fee to the type of card used for payment, merchants' location, and other transaction details.
The safest and most transparent pricing model in the current scenario is the IC++ (Interchange plus plus). IC++ refers to a form of blended pricing where the provider or acquirer of payment charges a merchant for every card transaction, using a rate made up of three components:
Always look for a PSP that uses the IC++ model to ensure all your payments are clear and upfront.
Before you go ahead with a particular payment service provider, make sure to verify the following details:
The PSP has to be an officially regulated company. A regulated financial institution in the UK is a company that has been checked and approved by the FCA with granted rights to accept merchant money and ensure smooth payment processes. The functions of a regulator include establishing quality standards and monitoring compliance. This means that you can be assured of secure transactions, avoiding the possibility of fraud. It also means the business should accept multiple forms of payment.
The PSP has to be a member of Mastercard, Visa, UnionPay International, or other payment networks. A payment network membership indicates that a payment service provider has gone through the required compliance processes set by the payment networks. Member financial institutions are directly linked to the payment networks, eliminating the need for an additional company and in turn, additional costs.
The benefits of working with a Mastercard or Visa Principal Member include:
Global reach and access to all the standard payment network services;
Direct integration with payment networks;
Access to the latest updates in the world of digital payments.
The PSP should have its own payment processing center. Having a single entity responsible for the end-to-end process is beneficial to both your business and your customers. It ensures:
A single point of contact;
More reliable operation;
Uninterrupted cash flow;
Better support and quicker responses (when fixes or upgrades are necessary).
The PSP should provide a payment gateway. Payment gateways combine the essential functions necessary to manage your transaction flow, including accepting and routing payments, reporting and analytics, account and subscription management, and more. This entails greater convenience for merchants, since they only have to liaise with one service provider overlooking all the major operations. It also ensures:
Single point of contact for the entire payment cycle;
24/7 availability when it comes to online purchases;
Access to fraud management tools.
Another important thing to pay attention to is whether or not the PSP offers additional payment methods, such as mobile wallets, open banking options, etc. Providing payment methods that are familiar to your buyers helps to build trust with your customers, increasing brand loyalty and improving conversion rates.
Looking for a payment service provider? Choose DECTA to help your business grow. With a full range of scalable payment solutions, various payment methods, API integration and a flexible pricing model, DECTA is the flexible and secure solution to your payment needs.
An FCA regulated company and a principal member of Mastercard, Visa, and UnionPay International, DECTA's dedicated payment processing centre and full payment gateway implementation can support all your online payment needs.