It's that time again when ecommerce merchants and small business owners can reflect back on some of their greatest triumphs and biggest challenges of the past year to help determine what aspects of the operation are running smoothly and where improvements can be made going into the new year.
Of course, the system by which merchants accept payments from customers or clients is an integral part of any business. Whether you process your payments through a merchant aggregator such as PayPal, Stripe or Square, or through a merchant account services provider, the end of the calendar year is an excellent time to evaluate your platform's performance.
If you determine that your provider was a little on the "naughty" side, perhaps it's time for a change. If your payments processor was mostly "nice" in 2017, build on those qualities and look for ways to check all the boxes (see infographic below) in 2018. Is it time for a change?
Most merchants are aware that, while costs will vary by vendor, the fees associated with merchant aggregators are typically higher over time than the cost of accepting payments through a merchant account. Many merchants will pay these fees in exchange for what they expect will be a faster approval process than through a merchant account provider, followed by a quick-and- easy set-up and a headache-free, managed solution going forward.
If you are one of these merchants but instead were encumbered by a longer than expected approval process, or a lengthier than promised set-up process, or a significant amount of hassles over chargebacks or other disputes, then it may be time for a change to your payments processing system. If you expected none of these things from your merchant aggregator and instead experienced all of them, then it's definitely time for a change.
Another violation that lands many processing platforms on the naughty list is hidden fees. Aggregators in particular have been known to charge hidden fees based on the merchant's volume of even simple transactions, either too many or too few per month, as well as charging extra fees for international transactions, chargeback disputes and faster-payment options.
Things you should always expect:
All payments processing platforms should give the merchant the ability to process all types of payments, not just payment card transactions. If this is not the case for you, it may be time for a change; otherwise, you can check the "nice" box in the infographic.
The same is true for security measures, and your system should support 3D Secure and be PCI DSS compliant. Not the case for your system? Check the naughty box and definitely consider making a change in 2018.
Another item that lands payments processors and aggregators in particular on the naughty list is that they tend not to allow for businesses to grow and scale. So, if that is your goal and 2017 gave an indication that you may outgrow your merchant aggregator, you'll want to consider switching over to an account services provider in the new year.
Finally, if your account was frozen, suspended or even terminated in the past year without warning, your payments processing platform belongs on the naughty list and you should most certainly be making a change in 2018.
Happy Holidays, everyone!
About the Author: Jared Ronski is co-founder of MerchACT and works with merchants globally to ensure they are paired with the right merchant account for their specific business needs. He has worked closely with higher risk business models and has provided companies of all sizes with payment processing solutions.