How to Choose an Online Payment Processor

Making payments online can be a nerve-wracking experience for both customers and businesses. You need to choose an online payment processor that is secure, affordable and easy-to-use for you and your customers.

Instructions

1. Pick something familiar and trustworthy. Nothing scares a customer away more than a shady-looking payment form. Pick something that is professional or recognized, such as PayPal, Bidpay or Propay.

2. Consider fees. Fees are how most online payment processors make their money. Depending on how much business you do, this will affect how much money they get and how much money you keep. If you make very few sales per year, it might make sense to allow your online payment processor to take a percentage off of each sale instead of charging you a monthly fee.

3. Look into payment processes. There are two main ways payments are processed. Merchant accounts go directly into a bank account and thus are FDIC-insured. However, private payment systems such as PayPal are not. It must first go through Paypal and then be transferred to you.

4. Look into dispute resolution. Find out how your online payment processor will handle disputes. For example, PayPal will represent both the buyer and the seller, while--with a merchant account--the business owner is represented by their bank.

5. Be secure. To avoid fraud, for the customers and yourself, choose an online payment processor that has advanced fraud protection. PayPal has a system that automatically declines AVS/CCV mismatches, but a merchant account lets you use gateways to track suspicious activity.

6. Compare, contrast, decide. Narrow your choices down to two or three options. From there, take a look at the features and the fees and then look for feedback on that particular online payment processor. The best information you can find is a testimonial from a current or previous user.

Tips & Warnings

• It is a good idea to have a backup online payment processor in case technical difficulties crop up.

• Using a merchant account rather than a private payment system can give your company a more professional feel.

• Many people have complained about PayPal freezing their accounts and blocking them from accessing their money. PayPal and other private payment services do not have to adhere to bank regulations, so beware.