How to Choose the Best Payment Processing Company for Your Small Business

Reading Time: 4 minutes

Accepting electronic payments is already the norm for many businesses, and more companies are getting on board all the time. According to Business Insider, e-commerce in the U.S. is set to exceed $1 trillion by 2023.

If you want your small business to keep up, you’ll need to work with a payment processing company and ensure that you get the best processor for small business that meets your individual needs. But what should you be looking for when choosing between the best payment processing companies? Here are some of the features to focus on when exploring your options.

What Is a Payment Processor?

Before looking at the specifics of payment processors, it helps to understand what they are and why they’re important to your business.

Payment processing systems handle all the details necessary to process an electronic payment. This includes encrypting the information, connecting with the customer’s bank, and depositing money in your account.

Methods of payment have evolved over time. Some people still pay by cash or check, but you could also accept:

When on the best processor for your small business specifically, you’ll need to pick one that supports the types of payments you aim to accept. It should also be able to integrate with your point of sale system, which will let you easily keep track of your payments.

Processing Fees

When choosing a payment processor, one of the first things to look at is their processing fees, including any that could be hidden. You won’t be able to avoid them altogether, but it’s well worth the effort to minimize them.

You should expect standard transaction fees when assessing the multiple candidates for the best processor for a small business, often 2-3%, but how much you pay beyond that depends on the pricing model. You’ll find options for a few models:

  • Subscription: A monthly fee based on the size of your business, plus a flat fee per transaction.
  • Interchange-plus: A fixed fee, typically $0.10 to $0.50, as well as a small percentage of the purchase.
  • Flat-rate: A flat monthly fee and fixed transaction-fee.
  • Tiered: Credit card transactions are classified as qualified, mid-qualified, and non-qualified, and fees depend on the category.

Note that qualified fees are the lowest, but they often only apply for certain cards that are physically swiped in a store or terminal.

The fees don’t end there, though. You should also look for any fees related to equipment, missing monthly quotas, early termination penalties, or anything else listed as “additional fees.” You want to make sure you’re aware of everything before you make a commitment. Even the best payment processing companies can come with a host of fees!

You can also consider looking at ways of easing the burden of those fees. Consider options like surcharges, cash discounts, and convenience fees to balance out all those processing fees.

Accepting Payments

Woman paying at a bar

Another consideration when looking for the best processor for small businesses is the type of online payment methods for small business you’ll be using.

For a physical store location, consider whether you’ll need a terminal for a countertop checkout, or if a mobile card reader is a better option. Even when you support in-person purchases, you may also want to allow purchases online, which means looking for a payment processor that supports both options.

Additionally, if you support credit card payments, you could also explore allowing contactless payment, or transfers from an ACH system.

Companies that have a subscription model need a system that allows recurring payments, and you could think about one that has discounts for repeat business.

It’s also important to remember that customers have different preferences for payment types. Some may always want to use their credit card, while others refuse to use it online, and if someone doesn’t see their preferred payment method as an option, they’ll often choose not to buy. The best processor for small businesses will have multiple choices for you and your customers.

This is why it’s important to support multiple payment options. When you do, you’ll see an increase in the number of customers who complete their transaction with you.

Security

When choosing the best payment processing companies, security is a critical factor. You need to be able to assure your customers that their sensitive information won’t get into the wrong hands.

Since any company that processes credit cards needs to be PCI-compliant, you’ll want to confirm that compliance with the payment processor. You should also look at the methods they use to keep the data safe when considering best processor options for your small business, such as point-to-point encryption and tokenization.

Fraud protection services are also important. Find out how the processor handles any suspicious-looking activity, as well as how they respond to any customer complaints of fraudulent charges.

Customer Service

Finally, the best online payment processor is one with excellent customer support.

When you first get started, you want to make sure the setup goes smoothly. Ideally, the process should be straightforward, but it helps to have support in case you have questions, or something goes wrong.

Once you’re up and running, while you don’t want to think about your processor having problems or going off-line, it can happen. In those cases, each minute of delay in getting back online means you lose business, and if it happens in the middle of the day, those losses can add up very quickly.

Even if you have problems during off-business hours, you don’t want to wait until the next day to get things back up and running. That’s why the best processors for small business’s finances have 24/7 support.

You should also make sure you can talk to someone when you have a problem. Email works fine for smaller problems, but in any critical situation, you need access to a live support agent to help you resolve the issue. The best payment processing companies will be easier to contact should you run into any issues.

Your Payment Processing System Is Key

Getting paid on a timely basis is critical for any business, and keeping those payments secure is critical for your customers. You need a robust payment processing solution to keep you up and running, and your customers happy, so be sure to evaluate your options carefully before deciding on which system to use to ensure that you get the best processor for small business operations.

Are you looking for a good payment processing system? Check out SeamlessChex solutions to find the right fit for your business.

Right payment solution for you infographic

More Blog Posts