As late as 2013, more than half of all U.S. businesses were cash-only.
Mom-and-pop micro-businesses can still make a plausible case for forgoing plastic. If you’re running a super low-margin neighborhood shop that does 100% of its business at the front counter, unavoidable credit card and third-party payment processing fees are bitter pills to swallow.
On the other hand, running a cash business can be more trouble than it’s worth, complicating immutable obligations like taxes and employee payments, and throwing a wrench into banking and insurance relationships that are increasingly plug-and-play for non-cash businesses.
If you’re ready to make the leap into the 21st century, or thinking about switching from your current electronic payment processor, you have a big choice in front of you. Use these eight criteria to evaluate potential payment processing* partners and — fingers crossed — make your choice just a bit easier.
* You’ll see the terms “payment processors” and “payment gateways” used interchangeably below. Don’t worry — they describe the same exact transaction solution.
- Rapid Processing Speed
The spread between fantastic and mediocre payment processing speeds is measured in milliseconds. If you don’t believe this, put yourself in the customer’s shoes: Every moment they spend tapping their fingers at your point of sale or staring at their phone’s wait cursor feels like an eternity. (Let’s be honest — you feel the same way.)
Every payment processing solution claims to have the lowest processing times around, but not all claims are created equal. Use trusted third-parties to evaluate transaction speeds and sort bluster from truth.
- Hands-on Customer Support and Service
The ideal payment processing solution would run smoothly forever, with no need for intervention or troubleshooting.
Unfortunately, the ideal payment processing solution doesn’t exist. Even the best-engineered solutions need a helping hand from time to time, and all are vulnerable to user error. (The customer is always right, except when they’re not.)
Look for a payment processing solution with redundant, hands-on customer support and service. Talus Payments’ online helpdesk is a great example, as it’s built for even the most vexing queries.
- Robust Encryption and Security Protocols
Steer well clear of payment processing solutions that ask users to take a DIY approach to security. The integrity of your customers’ personal and financial data is sacrosanct; protecting it is non-negotiable.
The first step here is to confirm that every payment processing solution you’re considering adheres to PCI security standards. But that’s just the first step. Payment processors that care deeply about transaction security use industry-leading encryption protocols and comprehensive fraud detection tactics. If you haven’t already, invest in EMV (chip) card readers — and make sure your chosen payment processing solution can support them.
- User-Friendly Interface
Like any other software solution, payment processors should be user-friendly. This is more for your employees’ sake than your customers’ — if every backend log-in is a slog, your team will quickly tire of your chosen gateway. Choose a processor that makes it fun, or at least intuitive, to check transaction histories and run reports.
- Customer-Friendly Fee Structure
Though it’s easy to take for granted when it works smoothly, payment processing is a complex affair. Only intense competition keeps payment gateway rates affordable for small business clients.
Payment gateways know that their clients are price-sensitive, and many are great at hiding the ball. That’s why it’s important to look beyond the headline rate and dive into the fine print — hidden fees and variable rates that can dramatically increase total payment processing costs. Pay special attention to fees for different types of cards. The ideal arrangement is a flat or easy-to-understand tier structure.
- Quick Payment
When all goes well, end-users perceive near-instantaneous processing. Of course, that’s not the end of the story: Depending on how frequently vendors close batches, transactions can take the better part of a day to actually process, and longer still to settle.
For small businesses with limited resources, the wait is interminable. If your business’s cash flow runs transaction-to-transaction, you need a payment gateway with a proven track record of expedient payments. Some processors take as little as 48 to 72 hours to settle up — they’re the ones you want to use.
- Compatibility With a Wide Range of Payment Types
The ideal payment gateway accepts as many common payment types as possible. These days, it’s not enough to take EMV credit cards and call it good. Merchants that consign themselves to card-only processors miss out on huge transaction volumes — especially when they conduct much (or all) of their business online.
Look for a payment gateway that goes beyond plastic and gift cards, and doesn’t charge an arm and a leg for the privilege. E-checks, ACH payments, and mobile wallet payments are all prized by consumers. Make sure they’re available at your store, real or virtual.
- Value-Added Solutions
Payment processors’ core services are valuable enough, sure. But truly excellent processors go above and beyond to offer value-added solutions that bolster their clients’ bottom lines. Look for gateways that provide short-term revolving credit lines for equipment, vendor payments, and other common business expenses — and express willingness to work with clients, however large or small, to tailor service packages to their needs.
Just One Piece of the Puzzle
Your payment processing solution is just one piece of your revenue puzzle. Beating a sales slump isn’t rocket science, but it does require an all-of-the-above approach. Consider these straightforward tips to increase your retail sales:
- Cultivate media connections with low-cost press releases and relationships with niche blogs and trade publications
- Up your social media advertising game with sophisticated buyer targeting tactics
- Create artificial scarcity with limited-quantity sales or admission-only buying clubs
- Partner with a charity or nonprofit and give away a portion of revenue generated during a discrete timeframe or by sales of a specific product
- Run sales around events or occasions unique to your business, like a founder’s birthday or your in-business anniversary
- Regularly survey customers to ensure you’re continuing to add value
What are you looking for in your payment processor? What else are you doing to boost revenues? Share your tips in the comments section below.