Running a business requires you to be on your heels 24/7 and to be ready to face challenges and potential difficulties. One such necessity for SMEs is payment processing at their checkout counters.
Businesses conventionally used to receive payments in cash but thanks to cashless payment methods, now there are plenty of new options available.
The digitization of the economy has made payments processing seamless and businesses can receive payments within minutes.
But it can be difficult for small retailers to transition towards cashless payments. One of the best ways to solve this problem is to sign-up with a third-party payment processor.
What Is A Third-Party Payment Processor?
A third-party payment processor is an entity that allows merchants to take online or credit card payments without the need to set up their own merchant accounts.
The third-party payment processor’s objective is to make digital payments as simple as possible for a business. So these businesses can run efficiently and conduct seamless transactions. This way these businesses won’t have to worry about opening merchant accounts with different card platforms because their transactions will go through the third-party payments processor.
How It Is Beneficial For Small Businesses?
It is common practice for well-established businesses to have merchant accounts with merchant services providers. With these merchant accounts, these businesses can process the payments of their customers when they make a purchase through their cards. They can directly accept payments through their merchant account and be done.
But businesses that are just starting out, cannot afford these merchant accounts and their transaction fees attached with these. It also takes time and documentation to open a merchant account with a merchant services provider. This time can be better spent doing other things for your business that is in its early stages.
Therefore, a new business should opt for a third-party payment processor. Instead of having their own merchant account which is not feasible, they can accept payments through a third-party payment processor. The third-party payment processor has its relationship with the merchant services provider and serves as an intermediary.
Having signed up with a third-party payment processor, you will be bypassing the step of having your merchant account at a bank. These payment processing companies allow small businesses like you to use their platform for processing your debit card and credit card payments. As a result, your customers’ payment information is reviewed by the processor, which runs a variety of anti-fraud measures before allowing the transaction to be completed.
The third-party payment processor company will accept debit cards, conduct credit card processing, and serve as an online payment platform for your digital businesses. The payment gateways provided by this processor allow you to expand the horizons for your business and increase the number of buyers that can buy from you.
Do I Need a Third-Party Payment Processor?
One thing to keep in mind is that just because you can sign-up with a third-party business processor doesn’t mean that it is the right choice for you. The cons of such processors can far outweigh the pros for a small or medium-sized company.
If your business has good cash flow and your prospects are good enough you should consider opening a dedicated merchant account directly with a merchant services provider. These merchant services providers can also offer you discounted transaction rates so you should also consider them.
The biggest drawback of payment processing through a third party is the lack of security. Having your merchant account can save you from fraudulent transactions and you will get your funds at the expected time without delays.
Therefore, choosing a third-party payment processor will depend on your business’s financial situation and needs.
Benefit Of Having A Third-Party Payment Processor
The benefits of third-party payment processors are many. One such benefit is that it does not require a hefty deposit fee to open a merchant account with the processor. It only charges you for transactions that are made.
A third party payment processor will not charge you an
- No early termination fee
- No customer support fee
- No statement fee
- No batch fee
- No annual fee
- No contract fee
- No PCI compliance fee
- No cancellation fee
Some Of The Must-Have Features In A Third-Party Payment Processor
Integration with your Current Setup
When signing up with a third-party payment processor you must ask the company whether they can integrate your online platforms in their system or not. You should also ask them how their software can work with your accounting software. A payment processor should simplify the operations of managing all transactions for you.
You should also ask them about the required hardware for integration, whether your current hardware works with their system or not.
Cost
Look for hidden charges and ask them about their rates. A reliable third-party payment processor will provide you with transparent rates and give you true insights about their services.
Supported payment types
Payment processors support all kinds of card payments but to be 100% sure, you can discuss the payment options and platforms available with the one you are choosing. You can also ask for value-added services to accommodate customers that pay through not-so-common methods such as SMS payments.
Policies
Payment processors have varying policies, some of them have minimum limits for transactions while some do not have any limits. Certain processors support same-day deposits while others do not. So it is recommended to research the available options before you choose one.
Customer Support
Choose a provider that offers 24/7 assistance because businesses can face difficulties in payments and transactions at any moment. Also, see if they provide any safety net in case of a fraudulent transaction.
Choose EPOS Now
EPOS Now offers a third-party payment solution to all your transaction needs. You can open a merchant account with EPOS Now to start accepting payments from your customers seamlessly.
For opening an account for a merchant and to learn more about what is a merchant account?
