An online Payment Service Provider (PSP) empowers merchants and businesses that need to receive payments from their customers. By offering online payment solutions, a PSP enables businesses to accept payment methods such as credit and debit cards in the ways that make sense for them, whether it’s on the phone, online, or in-store. PSP’s also bring valuable support with services such as fraud protection, risk management, and transaction reconciliation.
Selecting a PSP may feel overwhelming. After all, there are many options out there and many services offered by each. A good PSP will become an integral part of your business, so it’s important to choose the right one. It’s important to consider the features and pricing included to be sure you know what you’re getting, and that it’s right for you. Below is a list to help take the guesswork out of researching and making this important decision.
Here are a few baseline features that your shortlist of PSPs shouldn’t be without:
- Acceptance of a range of payment types and cards, as well as modern payment types such as e-wallets and various currencies
- Fraud protection and security measures to stay ahead of risks as they arise
- Reliable and available technical support
- Transaction reporting
Benefits of Online Payment Service Providers:
Now that you have a basic understanding of PSPs, read on for the benefits they offer to merchants.
Meet Consumer Expectations
The growing eCommerce shows no sign of slowing down in the past 7 years. Statista predicts that global eCommerce retail sales will reach nearly $5 trillion USD by 2021! This boom has come as consumers have gotten more comfortable buying products and services online, enjoying the convenience of ordering from home or their mobile device, and businesses are wise to reap the benefits by setting up an online shop. A good PSP is crucial in this step, enabling companies and retailers to offer their products to a wider audience, and allow their customers to shop in whatever manner they prefer.
Manual payments are becoming a thing of the past as faster alternatives become widely adopted. Checks generally take a few days to process, and carry the inherent risk of lack of funds in the customer’s account. Online payments are a better option as they are instantaneous, so merchants can confirm transactions immediately. Even better, some PSPs even integrate with an ERP, so that transactions are linked with accounting records in real-time.
An ERP is a platform that integrates various functional departments within your business, such as sales, accounting, purchasing, inventory, HR, and customer service.
Digitizing the payment processing cuts down on a lot of manual effort for merchants, or their employees. Checks require a trip to the bank to deposit it physically, and manually recording each payment. With online payment processing, these things happen automatically so you can use your time more effectively.
Help with Opening Merchant Accounts
In order to accept payments via credit or debit card, merchants need to apply for an account with an acquiring bank. This process can be time consuming as the review and approval rests in the bank’s hands. A PSP can support merchants by applying on their behalf, saving them time. Some PSPs even provide access to unified merchant accounts – part of the PSP’s own existing account within the acquiring bank. Merchants can leverage this option in order to quickly launch payment services for their business, as the PSP’s acquiring bank account is already established.
In addition, specific PSPs (like DPO) can provide merchants with their own prepaid cards (serving very similar to debit cards).
Multiple Payment Methods
With so many digital payment methods available these days – such as credit or debit cards, mobile money, mobile wallets, and more – it is advantageous for merchants to offer a variety of options to appeal to all of their customers. Online PSPs enable merchants to accept many different payment methods through a single, simple integration. Merchants are also not burdened with setting up individual payment methods, as this is all facilitated by the PSP.
A recent survey conducted by Fiserv reported that 43% of consumers prefer to shop at online stores that offer multiple payment options. By meeting this demand, PSPs enable online retailers and businesses to improve customer satisfaction. PSPs will also take care of the management, review, and tracking of all online transactions through their web-based payment platform.
Accept Mobile Money and Cross-Border Mobile Payments
Fast and effective, mobile payments are an appealing replacement for cards and cash. Consumers simply use their mobile devices to pay for products and services easily and quickly. Your PSP should accept cross-border and mobile money payments, services which make things simpler for you and your customers alike. There are many benefits to mobile payments, such as:
- Access to financial services available even to those without a bank account
- Simplicity and convenience
- Merchants are able to accept payments at any location
- Enhanced security measures for transactions
- Cross-border and multi currency transactions, meaning borderless payments and an expanded customer base
Support for Multiple Currencies
By opening an online business, you dramatically increase your audience. Why limit your customer base to your locale or currency, when you can now transact with customers across the continent or even globe? To create a full-featured online business, it is imperative to invest in a PSP that can support multiple currencies. The PSP will have done the legwork already, creating partnerships with banks that facilitate processing for particular currencies. Find a quality PSP offering a unified payment solution, which eliminates the need to open an account for each currency.
Security tends to be at the front of every merchant’s mind when considering digitizing payments and accepting transactions online. Consumers are also conscious of ensuring their data – and money – stays safe when making purchases. PSPs are the hero in this part of the solution as well, staying ahead of security demands and ensuring the right measures are in place to keep retailers and consumers safe. A quality PSP will be PCI DSS compliant, a certification to provide a protected, secure network for conducting transactions. Merchants use a webpage hosted by a compliant PSP to keep their customers’ sensitive data protected, giving them the peace of mind to make their purchases online.
Ensure the PSP you choose offers technical support as a part of their standard service offering. It is important to ensure support is included, as some providers consider it an extra service, tacking on per-incident charges. Top quality PSPs will offer 24/7 technical support through a variety of channels, such as email, phone, and live chat.
Signing up with a PSP which provides all of the above benefits will ensure a well-rounded solution to meet your business’ and customers’ needs, while also allowing yourself room to grow. Take your time, and read through the offerings from your shortlisted PSPs before making a decision. Signing up with a PSP comes with a subscription charge (which may include a monthly and transaction fee and one-time setup costs), though as detailed above, the use of a PSP is invaluable. Be diligent when researching, and be sure to select a PSP that brings the best value for the money, and watch your business grow.