5 Tips for Merchants on How to Choose a Payment Service Provider

Choosing the right payment processor is one of the most critical steps in making your e-commerce site as accessible and useful to your customers as possible. Depending on what you sell and where you're selling from, there are a host of factors to take into consideration that affect not only how much you'll be spending on your online experience, but how much your customers will be charged and how convenient it is for them to finally click the buy button. To help guide new merchants looking to establish their first business or veteran sellers looking for a better rate, here are five essential issues to evaluate when choosing your next payment processor:

1. Understand the fees: All payment processors charge a small percentage of each transaction, but some also charge monthly maintenance fees, merchant account set-up fees, PCI compliance fees, downgrade fees and 1099 fees. While some of these charges may seem nominal at first, they can accumulate into thousands of dollars in the course of a year (or decade). Find a payment processor that charges no fees, hidden or otherwise. That way you'll know the true cost of your sales while saving on your operations.

2. Simple integration with your website: Understand how much work it will take to integrate a payment processor into your site. Hint: it can take a long time, but it doesn't have to. Depending upon your IT sophistication, some payment processors offer a hosted checkout option that can let you go from a merchant account application to accepting online payments in an hour. Other payment processors offer application programming interfaces (APIs), which allow you to mesh the processor's code into your own site for complete control over the buyer's checkout experience. And many payment processors are pre-integrated with a wide range of shopping cart software and e-commerce platforms, so you won't have to change as much of your existing website infrastructure.

3. Fraud protection: As any online merchant will tell you, security is a crucial issue for customers who want to hand you their credit card information without it falling into the wrong hands. The only thing more important than supporting a strong defense against fraud is communicating it to your buyers. Find out what tools the various payment processors offer to protect you from fraudulent transactions as well as hacking attempts on your customers’ data.

Look for SSL encryption, a security protocol that shields data as it travels through the internet from your customers’ accounts to your website, as well as between your website and the payment servers. Look for PCI compliance, a set of standards and protocols enforced by the payment card industry for any company that accepts private credit card data. Working with a PCI-compliant payment processor means that the processor takes full responsibility and liability for all card data storage. That said, SSL encryption and PCI compliance are the bare minimum for keeping your customers secure and stress free; the more advanced payment processors protect merchants from fraudulent parties by providing authentication to buyers and spotting fraud before you even fulfill an order.

4. Global currencies: The internet knows no borders, so you may be conducting business with international buyers sooner than you think. See which payment processors accept payments in all major global currencies — not just two or three, but a host of different coinage that allows anyone from anywhere to enjoy your products or services. The best processors automatically detect what country a customer buys in via geolocation. Premier payment services also present your payment screen in the native currency of the buyer, calculated to the correct price through exchange rates. Also, be sure to ask what fees are associated with currency conversion for cross-border transactions.

5. Customer experience: It's your brand, don't let a frustrating payment experience reflect badly upon it. Look for a flexible payment processing technology that can be customized to look and feel like your website by matching your colors, design and layout. Also ensure that your checkout page can dynamically adjust to whatever device your customer might be shopping on — smartphone, tablet or computer. This capability to "sniff" the incoming IP address and adjust automatically is called responsive design, and it should go beyond just resizing the page to fit a smaller screen. Responsive design should also modify button sizes, scrolling requirements and automatically compensate for limitations inherent in mobile web browsers.

Overwhelmed? Don't be. Simply follow the guide above to find a payment processor that will also be a true business partner, empowering your business to reach new markets and levels of success. Happy hunting!

Sean Edgar is the content director of 2Checkout, an online payment processing service.