The payment industry has shifted, evolved and innovated these last two years. Payments are contactless, customer experience is king, and software solutions integrate payments. Today's customers expect a streamlined payment process, and enterprises are getting onboard. Choosing a payment processor best suited to a company's need is no small feat. Let's break down the complexity and first look at what a payment processor is (and what it isn't). And then why lenders should have one, and finally, the six things to look for in choosing a payment processor.
What is a payment processor?
A payment processor handles the behind-the-scenes backend logistics of payment and financial transactions. In short, it is the layer embedded into an enterprises software solution. This layer delivers the "service" of communicating, relaying, and handling payment information. The payment processing partner handles the entire payment transaction process, including PCI and KYC compliance. Additionally, they often provide other value-add services. The key takeaway:Payment gateways approve or decline transactions, whereas payment processors oversee the entire transaction process. For this reason, choosing a provider that is both gateway and direct integration offers the expertise to create a payment solution that protects, manages and grows business built on the merchant's goals.
The benefits of a payment processor
There are no two ways about it; customersexpect a fast, easy, and efficient payment experience. In 2020, we saw a 48% increase in online transfers. As a result, the demand for global payment processing solutions is growing undisputably. Customers want to pay and get paid on a dime in their choice of payment. Enter in the payment processor. Increase total addressable market and accommodate more customers by offering safer and easier ways to pay.
Choosing a payment processor
Loans Canada said it best; we call them payment processing partners for a reason. And with that in mind, the relationship should benefit both. Determine your business goals and consider the best option for your business. And then determine if the payment processor has the capacity for the following six considerations.
1) Enhanced Security
Payment processing partners need to be secure. Look for enhanced security features such as tokenization. Like a unique code to a lockbox full of information, tokenization is the next big thing when it comes to protecting a customer's data.
2) Seamless Integrations
Smooth integration into your existing system is critical. Does your business use an ERP, CRM, or accounting software? Look for a payment processor that offers a simple-to-use API. Using one single interface will simplify the reconciliation process and reduce data errors. This, in turn, will save the business time and money.
3) Expert Customer Service
Customer support for any payment issues that may arise is vital for your business's survival. Enterprises need a payment processor that will have "their back." Choose a payment processing partner recognized for providing exceptional service. This will ensure your business is equipped to exceed customer expectations.
4) Multiple Payment Rails Payment Methods
With the speed at which payment methods change, look for a provider that can grow with your business. Consider these questions: how quickly are new payment methods available? Does it accept new payment technologies? Customers want to pay in a way that suits their needs. Payment method flexibility has become the "new norm". It will prove wise not to tie your business to soon-to-be outdated payment methods.
There are a variety of pricing structures depending on needs and business size. Ensure to research and confirm that pricing matches the company's needs and can grow with the company. Now is not the time to take a chance on the lowest-priced vendor in the market. Therefore, businesses should look for cost-efficient and competitive pricing but don't choose a partner based solely on price. To conclude, while pricing is necessary, a good partner will hit all the considerations outlined above.
6) Recurring Payment Processing
Recurring billing enables businesses such as lenders or subscription services to set up an automatic billing cycle for their customers. It improves the customer experience by removing the friction associated with repeated manual payments and delays and ensures the business's cash flow is stable.
VoPay Payment Processing Solution
VoPay is an industry-leading payment processing platform designed specifically for lending platforms. VoPay's API-driven technology integrates payment processing services into any loan management software or ERP, reducing the complexity of providing local payment options. Our intuitive platform, powered by Open Banking technology, provides various innovative payment tools such as data intelligence and bank account verification to eliminate failed payments for lenders and their borrowers. Lenders can use VoPay's payments network to send and collect mass payments without building their own infrastructure. VoPay's payments network supports local payment methods such as intelligent EFT, ACH, Interac e-Transfer® for Business, Credit Cards, and Visa Direct. Request a demo of our platform today! We are recognized for our contribution to digitizing lenders across Canada, winning Fintech of the year in 2021 and accredited by the Canadian Lenders Association.