Ugh. We need to find a payment provider.
Why is it such a pain to evaluate and select a payment provider?
After 20+ years of working the payments industry, I've noted one recurring theme that inevitably will derail a good evaluation process – the incomplete or improper translation of information between merchant and the provider being evaluated.
Depending on a merchant’s business model and risk category, evaluating potential payment providers can set off a King Kong sized episode of heartburn. Additionally, the influx of decision makers that do not have a background in payments, has made it increasingly difficult to identify not just solution requirements but the motivation behind some of the decision making - which can effect what a provider presents during evaluations.
There are a number of details a merchant needs to understand about their operating model to ensure they are spending time with providers that can support their business.
Knowing what those details are and how to effectively communicate them can be a challenge – and if bad information is presented, the evaluation pathway can become long and horrible.
Reversely, good information that is not translated properly to the provider can result in extended evaluations, or worse, a foiled (and usually frustrating) application process.
3 Steps to help properly evaluate a payment provider...
Here are a few things merchants can do to ensure a successful payment provider evaluation process.
Step 1. Know your operating model
Understanding your operating model and how the payments industry views your business is key.
In addition to details like sales volumes, average ticket and products being sold, things like whether or not you have recurring charges and the amount of time it takes customers to get their goods all play a role in a payment provider’s review of your business.
Be prepared to discuss your sales and fulfillment process with the provider.
Free tidbit, the more steps there are between you and your customer, the more due diligence the
payment provider will require.
Be ready to answer questions.
Step 2. Conduct pre-qualifying discovery calls
It is recommended that you get potential providers on the horn and conduct pre-qualifying calls.
This will help ensure you move forward with providers that can support your business.
For example, if you have a subscription model that charges shipping costs for the goods that a third-party ships – you need to discuss that with the provider up front to determine if the risk associated with your operating model is something they can support.
Step 3. Don’t hide stuff
It's simple - just like your parents used to say, "If you lie, we will find out and you'll be in worse trouble."
In case you didn’t know, payment processing applications go through underwriting and risk evaluation just like any other financial application.
If your business has open law suits, was recently put on a chargeback program or has an owner that is being sued by Google, be upfront about it.
I’m not saying everything will be smooth sailing as a result, but at the very least you will be empowering those providers who may be able to help you while closing engagement with those that cannot.
How do I know which provider is best for my business?
It depends on your business model, growth strategies, payment processing requirements and other factors.
There is an endless supply of payment providers and payment products in the market that can support and help grow your business.
Understanding how to build the right provider stack is key.
You want to partner with providers that can not only support your business model, but also provide supporting resources for PCI, fraud and multiple payment options, for example.
Payment processing is not a one-size fits all gig.
A payment provider stack that works for business “A” might not work for exact same business “B” simply because “B” has specific integration requirements to support their PCI policy.
Partner with providers that support your current requirements but also have room for growth.
Selecting a payment provider is an important decision and should get the time and attention it deserves.
Many companies look at payment processing from a reactive standpoint vs. proactively engaging with providers.
Do the work, conduct intelligent evaluations and stay in charge of growing your business.