What is a Payment System and What to Consider Before Choosing a Payment System

Gone are those days when physical cash was at the center of most financial transactions. Presently, there has been a wider acceptance of electronic transactions than ever. Have you ever made a purchase online? Enter your card details, and in a few seconds, you are debited. Now, you are starting your business, and you are wondering how that works. How can I incorporate such a system into my business? Payment systems are responsible for processing those transactions. If this is your first-time hearing about payment systems, this article will educate you on what they are and how to choose the most suitable for your business.

What are Payment Systems

Payment systems are responsible for processing financial transactions and facilitating the purchase of products and services. These systems enable businesses (small, medium, or big) to accept secure electronic payments. They serve as a bridge between payment portals. Payment systems allow you to access different digital payments like credit and debit cards, digital wallets, and electronic checks.

Certain sensitive financial information is transmitted each time you transact online; their job is to secure that information.

Choosing a Payment System for Your Business

Easy Checkout

You need to understand your business will be transacting with various people from different backgrounds. Not all your customers will be tech-savvy, so checkout has to be as easy as possible. This way, you will ensure customers don’t abandon their carts.

Security

Customers are always careful about how they use their details for payments in online stores; they want to be assured their money is secure. Therefore, you must prove your reliability by opting for a payment system with adequate security. The payment system must use updated encryption technology to prevent your customers’ credit card information from being stolen. In addition, the payment system must be PCI-compliant; they must adhere to the Payment Card Industry Data Security Standard (PCI DSS) as required by all businesses processing credit card payments.

Transaction fees

Every payment system has its transaction fee structure. Most payment systems charge a certain percentage on every transaction. Some come with a monthly subscription, while others do not. Some payment systems offer tiered or volume-based pricing to provide businesses with discounts on high-volume transactions. As a small business, you need to review the pricing structure of your preferred payment system to ensure it does not affect your profit.

Global Transactions

If you plan to sell internationally, opt for a payment system that will support global transactions and multiple currencies. When a payment system supports international transactions, it means you won’t have a problem with accepting payments from anywhere in the world.

Onsite or Offsite Transactions

Some payment systems allow payment processing on your checkout page, while others will redirect customers to a separate page to enter their payment details. If you don’t want your customers to enter their credit card details on a separate page, choose the payment system with an onsite payment solution. However, if you don’t mind, choose the ones with either onsite or offsite payment processing.

Customer Support

You might experience certain issues using these payment systems, especially if it is your first time; therefore, choose the one with reliable and active customer support. You don’t want to choose a payment system that leaves you stranded to figure things out on your own. Do some research about them. How often do they respond to inquiries? Are they accessible anytime? Are they available on weekends? Answers to these questions will allow you to choose a payment system with good customer support.

Fraud Detection

For enhanced security in your business, opt for payment systems that allow you to integrate tools for fraud detection and prevention. This way, you will keep yourself from unnecessary losses and chargebacks.

Integrations

As a small business, you need to make things easier as much as possible. Use payment systems that can integrate with your business. This is essential if you already have a website or a store. The payment system must integrate well into your business to prevent any disruption.

Conclusion

Now that you understand payment systems and how you can choose the most suitable one for your business, you can go ahead and choose one. Remember, if it does not align with your business operation, do not choose it. This way, you can save your save from potential headaches.