Choosing a Payment Provider : Key Considerations

I'm often asked, "How do I choose a Payment Provider?" It's crucial for businesses to find a provider that offers the best pricing structure, extensive coverage, robust fraud and chargeback management tools, and intelligence to boost conversion rates.

Many payment providers claim to excel in these areas, but can they deliver? Here are five key factors to consider when making your decision:

1. Pay In, Pay Outs, and Hidden Fees Request a complete transaction flow from the provider. Use real numbers to understand references and minimum fees. Fully understand the provider's take rate—how much they discount from your transactions.
2. FX Costs, Expatriation Costs, and Settlement Costs for Cross-Border Merchants FX costs depend on the provider's treasury and tax structures and how they are setup for different jurisdictions. Expatriation and settlement costs may vary based on transaction volumes and the speed at which you need funds in your account. Less structured providers relying on third parties may have higher fees, more manual processes and terrible SLAs.
3. Other Tools/Services and Merchant Panel Check for extra charges for services like anti-fraud, chargeback guarantees, settlement frequency, reporting, and analytics. Evaluate the provider's merchant panel. A poor interface or basic dashboards may indicate data management issues that could impact your business. Look for detailed reports on fraud attempts, chargeback details, and conversion rates per payment method.
4. Coverage and Integrations Some providers connect with other providers to extend their reach, while others aggregate multiple providers with minimal added value. Ensure the regions you need are serviced by direct integrations with local payment methods to minimize potential downtime and issues.
5. Regulatory and Compliance Avoid providers without licenses in any jurisdiction they operate in. Licensing usually indicates regulatory due diligence and compliance with specific operational requirements. Understand why some providers are licensed and others are not.

In my experience, less efficient and less transparent payment providers will struggle to respond to most of these points, which can help you better understand their capabilities.

When choosing the right payment provider, consider that your business model, expected volume, and risk profile directly affect pricing and the availability of some services.

By researching these five key areas, you can minimize frustration and find a provider that truly meets your needs.

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