If you’re a freelancer or small business you want to maximize your opportunities for positive cash flow. A great way to accomplish this is to equip your business with the ability to accept payments.
With a multitude of payment processing options out there, it’s often difficult to know who’s the right match for your business. With so many choices there is lots of room for error.
Here are four mistakes to avoid when choosing a payment processor for your business.
1. Missing the “Fine Print”
Pricing for various payment processing companies is different all across the board. Some offer flat rates, others monthly, and many require both. These “upfront” costs are usually very transparent. However, fees that are usually located in the “fine print” section that are sometimes referred to as hidden fees aren’t so clear. Here are some examples that may result in a hidden fee:
- Failed transactions or Chargebacks: When a credit card fails or the charge is essentially backfired, processing companies may charge a fee.
- Card Type: Depending on which cards are used (Visa, MasterCard, Discover, AMEX, etc..) there may be a fee associated with individual cards. For example, American Express often times requires an extra fee since they have the highest rates.
- Exceeding Transaction Maximum: Some processing companies only allow for a certain number of transactions to be processed each month. If your business exceeds this maximum, there may be a charge associated with each extra transaction. These can add up very quickly.
2. Taking Security Measures into Your Own Hands
One of the absolute worst things you can do when setting up payments for your business is try to handle security by yourself. Security is arguably the main concern for customers when making a purchase. Plenty of payment companies offer fraud protection and data security measures.
Find out how and where the company stores customer data, sometimes processing companies store data on third party servers (this is typically a good thing depending on who the third party is).
- Is the processor fully PCI compliant?
- Is all data encrypted and what level of fraud protection is offered?
These are all great ways to make sure your processor provides a safe and secure transaction environment for your customers while mitigating any potential risk for your business.
3. Only Offering One or Two Payment Options
When choosing a processor, its important that you give your users several options at the checkout. Depending on the processor, these options may vary quite a bit. If you can provide them all, great! If not, try your best to accommodate as many as you can. Here are the ones to take note of:
- Credit Card and Debit Card: These are the most common form of payment for online purchases. This is a must.
- ePayment: eChecks and other forms of electronic payment are becoming increasing popular as our economy is shifting away from paper and card transactions.
- Digital Wallet: Companies like PayPal and Due offer digital wallets where you can make payments from the balance on your account.
- Bitcoin/Cryptocurrency: This is an extremely secure way to make transactions online.
When choosing a payment processor for your small business, don’t stress too much. While you may never find a “perfect” solution, you can surely find one that fits the needs of your business.