2 min read — Published 7 months ago

How To Choose The Right Payment Provider For Your Business

In this complete guide, we'll walk you through the key factors to consider when choosing a payment provider and provide tips for making the right choice.

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\ For online business owners, selecting the perfect payment provider is crucial for ensuring a smooth checkout experience for customers. The right choice not only enhances customer satisfaction but also boosts conversion rates.

But how do you navigate the complex world of payment providers to discover the one that best suits your business? In this comprehensive guide, we will outline the essential steps to make an informed decision and discuss the primary factors to consider when choosing a payment aggregator.

Steps to Choose the Right Payment Provider

Every business must consider several important steps before selecting a payment provider. Let's go through these essential steps:

Step 1: Define Your Payment Strategy

Before you choose a payment partner, you need to define your payment strategy. This involves understanding the payments scheme in your region, and determining which payment methods your target customers prefer. You can hire a payments expert or study the market yourself, but it can be time-consuming. Alternatively, you can use a provider-agnostic orchestration platform like Moneyhash to get expert insights and help you achieve your company goals.

Step 2: Consider Your Targeted Market & Expansion Plans

When selecting a payment partner, it's essential to consider your operational and expansion goals. This includes understanding where you plan to do business based on your overall strategy and the specific markets you're targeting. Once you identify the countries where you'll operate, ensure that your payment provider aligns with the needs and preferences of your target market in those regions. Conducting market research can be invaluable in this phase.

If you're a startup in the early stages of growth, a thorough study of targeted markets and potential expansion areas is crucial. This step should be tailored to your business plan and chosen market. For instance, if your company aims at cross-border operations, offering a variety of payment options is vital.

Ultimately, your chosen payment provider should facilitate an efficient checkout process adaptable to each region you operate in.

Step 3: Consider The Transaction Fees Factor

Considering transaction and markup fees is vital for your payment and pricing strategy. The transaction fees you set will depend on your business size and your payment provider's commission. These fees usually include a percentage, typically between 1% to 5%, plus a fixed fee. Larger businesses with higher transaction volumes often get better rates. If your business is small or considered high-risk, payment providers may charge higher fees.

Markup fees typically cover costs from the card network, the card-issuing bank, and the payment processor, and they might also include account management fees. Usually, local payment providers offer better rates than global providers, as there are fewer parties involved in the transaction process.

Should You Choose a Local Or Global Payment Provider?

Choosing between a Local Or Global Payment ProviderChoosing between a Local Or Global Payment ProviderChoosing between a local provider or a global payment provider depends on several elements:

1. Markup Fees

If you want to get the lowest rate of markup fees, then working with local providers in each country is considered a better option. Yet, if you are willing to pay higher fees, then working with a global payment partner may be more convenient as you will only need to integrate with one provider.

2. Technical Expertise and Resources

If you are working with multiple providers across different countries, this can be a significant undertaking. You need to have the technical expertise and resources to handle the integration and maintenance of the different systems. If you don't have the resources or technical expertise, it may be best to work with a global payment partner that can handle integration and maintenance for you.

3. Ensure PCI Compliance

You need to make sure that your customer's sensitive data is protected at all times because that involves your business's reputation. All businesses that store, process or transmit payment cardholder data must be PCI compliant. Your payment partner has to be PCI certified, so you can consider working with them.

4. Reputation and Support

Before choosing a payment partner, research their reputation in the market and ask their clients who operate in the same industry as you about their service. Be sure to also check if there are any microservices or additional support you want from that partner that would enhance the checkout experience for your customers.

Set an Implementation Plan

Once you have chosen your payment provider, it is time to put a plan in place for execution. If time to market is a big deal to you, you may consider a payments orchestration like Moneyhash to advise you and help you move forward faster. With Moneyhash, you can implement a complete payments infrastructure from strategy to execution in less than two weeks.

The Bottom Line

Choosing the right payment partner for your online business is crucial to optimizing your checkout process and boosting conversion rates. It's important to take the time to understand your options and determine what will best serve the needs of your business and your customers. Consider factors like target market, fees, PCI compliance, reputation, and support when choosing your payment partner. If you need expert insights and a faster time to market, consider using a payments orchestration platform like Moneyhash. With Moneyhash, you can focus on growing your business while leaving the payment processing to the experts.


FAQs:

  1. What Are the Steps to Choose the Right Payment Provider?
  • Step 1: Define Your Payment Strategy

  • Step 2: Study the Targeted Markets and Expansion Plans

  • Step 3: Consider The Transaction Fees Factor

  1. What to Choose a Local Payment Provider Or a Global Payment Provider?
  • The Markup Fees

  • Technical Expertise and Resources

  • Ensure PCI Compliance

  • Set an Implementation Plan


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