How to Choose the Best Payment Processor for Your Small Business: The Complete Guide

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Accepting electronic payments is already the norm for many businesses, and more companies are getting on board. According to Business Insider, e-commerce in the U.S. will exceed $1 trillion by 2023. If you want your small business to keep up, you’ll need to find the best payment processor for your small business.

But what should you be looking for as you choose between the best payment processing companies? 

This guide will cover everything you need to know to identify the best payment processing companies.

Let’s dive in. 

First Things First - Why Online Payments Matter

While having an online presence was important before COVID, it has become necessary to run a viable business in a post-pandemic world. 

That’s especially true as far as payments are concerned. Today, more than 75% of Americans want to pay for their purchases with electronic payment methods

Providing online payment services with the help of a payment processor is essential for any company that wants to meet the demands of modern consumers and run a successful business. 

What Is a Payment Processor?

Before looking at the specifics of the best payment processing companies, it helps to understand what they are and why they’re essential to your business.

Here’s the breakdown:

Payment processing systems help companies process electronic payments. This includes encrypting the information, connecting with the customer’s bank, and depositing money in accounts.

While payment methods have evolved, payment processors have, as well. Today, some people still pay by cash or check, but a good payment processor will also allow you to accept the following:

As you search for the best payment processing companies, you’ll need to look for the ones that support the payments you aim to accept. 

The best payment processor for small business will also integrate with your point of sale (POS) system and let you easily track your payments.

8 Tips to Find the Best Payment Processor for Small Business

Follow these tips to find the best payment processor for small business:

1. Make Sure The Company Serves Diverse (And High-Risk) Industries

The first step in choosing the right payment provider is to find out what industries they serve. 

Regarding online payment services, not all businesses are equal. If you sell high-value goods/services, handle high-volume transactions, or run a high-risk business, most payment companies, including PayPal and Stripe, won’t work with you.

Before evaluating other factors, make sure the payment provider can serve various industries. This is important to remember as it impacts your merchant account and influences business success.

Low- and high-risk online payment services like SeamlessChex specialize in preventing merchant account termination to help you run a long-lasting business.

2. Find the Most Secure Service

When it comes to choosing a payment processing company, security is a critical factor. After all, you need to be able to assure your customers that their sensitive information won’t get into the wrong hands.

  • Although most payment companies claim to offer secure solutions, data theft and payment fraud are hitting record highs: online credit card fraud cost the United States $11 billion in 2020. 
  • Cyberattacks and fraudulent transactions damage your reputation and can bankrupt your business.

As such, fraud protection services are critical.

Today, any company that processes credit cards needs to be PCI-compliant. You’ll want to confirm compliance with the payment processor and evaluate the methods they use to keep the data safe, including point-to-point encryption and tokenization.

Find out how the processor handles any suspicious-looking activity, as well as how they respond to any customer complaints of fraudulent charges.

At SeamlessChex, we comply with PCI DSS standards, verify bank account ownership, offer signature capture technology, and provide cutting-edge fraud prevention tools to ensure highly secure online transactions.

3. Look for a Hassle-Free Onboarding Process

After finding a flexible and secure online payment service provider, learn about their sign-up and onboarding process. 

Many online payment companies have frustrating documentation requirements and lengthy underwriting procedures. 

These unproductive practices can take weeks to complete, wasting your time and delaying access to essential financial services.

If you want to avoid long wait times, look for online payment services with hassle-free onboarding. 

Some companies have very efficient sign-up procedures which can help you process online payments in no time. 

SeamlessChex provides a quick and straightforward application process, offering all legal US businesses same-day approval to save you time and money.

4. Seek Multiple Payment Methods

As you search for the best online payment service provider, you’re probably thinking of a credit card processor. Although a popular online payment method, remember that almost 30% of Americans still don’t have a credit card. 

Meanwhile, one in three people with a credit card doesn’t want to use the card online due to hacking concerns and other cybersecurity threats. Because of this, offering multiple payment options on your website will allow you to serve more customers. 

To boost your sales opportunities, partner with an online payment service (like SeamlessChex) that offers more than just credit card processing.

Along with processing credit cards, SeamlessChex also provides ACH, eCheck, and mobile payment options to maximize your reach.

Here are a few unique considerations:

  • Brick-and-mortar locations. Consider whether you’ll need a terminal for a countertop checkout or if a mobile card reader is a better option for a physical store location. 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.
  • Companies that offer subscription models. These businesses need a system that allows recurring payments, and you could think about one that has discounts for repeat business.

Bottom line? The best processor for small businesses will offer multiple payment choices for you and your customers.

5. Check Service Compatibility

You're probably running dozens of applications, from shopping cart platforms to accounting software, to improve business efficiency. 

A payment platform needs to integrate seamlessly with your existing systems so you can run an efficient business. Software integration problems can slow down payment processing and negatively impact customer experience.

To ensure an optimized checkout process, analyze the online payment service to see if it’s compatible with your business applications. 

All you need to do is check whether the online payment service provider offers API integration. APIs help all your software connect easily, creating a seamless business ecosystem and excellent customer experience.

6. Learn About Their Settlement Period

When a customer makes a payment, the processor ⏤ , not you ⏤ , receives the money. Many payment providers hold onto that money from days to weeks before depositing the funds into your merchant account. If you have cash flow issues, prolonged payment holds can make it challenging to meet your business’s financial obligations.

Learning about an online payment service’s settlement period is essential to help you avoid business disruption. To pick the best payment provider, partner with a company that gives you quick access to your funds. SeamlessChex provides fast, next-day deposits into your merchant account to help you operate a smooth-running business.

7. Assess Their Customer Support

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 if you have questions or if something goes wrong.

Here are a few things to think about:

  • Access to 24/7 tech support. Payment gateways are vulnerable to technical glitches and service outages like other software systems. A small change to the settings or a minor misconfiguration can cause payment gateway failure. Access to round-the-clock technical support is crucial to reducing failed transactions and lost revenue.
  • Protocol for outages. As you search for the best online payment service, assess the quality and level of their customer support. Once you’re up and running, you don’t want to think about your processor having problems or going offline. 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. When faced with a technical glitch, does your processor expect you to resolve the issue or provide live technical assistance to help you fix the problem? 
  • Availability of live agents. You should also ensure you can talk to someone when you have a problem. Email works fine for minor issues, but you need access to a live support agent in any critical situation to help resolve the issue. The best payment processing companies will be easier to contact if you encounter any problems.

The bottom line? Choose an online payment service provider that offers 24/7 customer support via multiple channels to minimize business downtime.

8. Shop Around for the Best Rate

Online payments are fast, convenient, and expand your business reach. These benefits, however, come with a downside. 

Accepting online payments from customers can be costly. Many payment providers will charge you up to 4% of the total transaction value for accepting credit cards. These exorbitant fees eat into your profits and can impede business growth.

And last but no less important than previous tips, look for an online payment service that offers affordable rates to help you save more money. Keeping operating costs down can help you run a thriving business under any economic condition. 

SeamlessChex will provide a free cost savings analysis to show savings off your current rates 99% of the time. In addition to credit card processing, Seamless Chex provides eCheck and ACH payment solutions which cost up to 90% less than cards.

A Word About Processing Fees

When choosing a payment processor, one of the first things to look at is their processing fees, including any hidden fees. While you can’t avoid fees altogether, minimizing them is worth the effort.

Generally, you should expect standard transaction fees (usually between 2-3%) from any payment processing company. Exactly how much you pay, though, depends on the pricing model. 

Here’s a breakdown of a few of the most common models:

  • Subscription: Subscription payment models charge a monthly fee based on the size of your business, plus a flat fee per transaction.
  • Interchange-plus: Interchange-plus models charge a fixed fee, typically $0.10 to $0.50, and a small percentage of the purchase.
  • Flat-rate: Flat-rate payment models charge a flat monthly fee and fixed transaction fee.
  • Tiered: Tiered payment models classify credit card transactions as qualified, mid-qualified, and non-qualified and charge different fees depending on the category. While qualified fees are the lowest, they often only apply for certain cards that are physically swiped in a store or terminal.

As far as fees go, processing fees aren’t the end of it. You should also keep an eye out for fees related to equipment, missing monthly quotas, early termination penalties, or other “additional fees.” 

You want to make sure you’re aware of everything before you commit. Even the best payment processing companies can charge a surprising variety of fees. 

If you’re concerned about those charges adding up, consider ways to decrease fees. Options like surcharges, cash discounts, and convenience fees can help balance and offset other expenses. 

SeamlessChex: The Best Payment Processor for Small Business

Getting paid on time is critical for any business, and keeping those payments secure is vital for your customers. You need a robust payment processing solution to keep you up and running and keep your customers happy.

Be sure to evaluate your options carefully before deciding 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.

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