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Is Choosing a Payment Processor Based on Rates Good Enough?

Processor Rates InfographicSelecting a payment processor can be hard and focusing on low processing rates isn’t the ideal way to go.

Those that have been around the payments industry long enough know that even though many businesses tend to gravitate toward low processing rates offered from a variety of bidders, low rates may actually be a sign that the provider is lacking in multiple areas. Whether the payment processor isn’t being entirely transparent or isn’t providing a wide enough range of client services, the fact is that merchants are probably missing out if they choose a payment processor based on rates alone.

Merchants are always urged to consider other factors when picking their payment processor, especially if they want to improve security and increase the long-term profitability of their businesses. So what other factors are important to merchants?

Chargeback Protection

Payment processors that offer fraud and chargeback prevention tools are crucial to the success of any business. Initially created to protect consumers from unscrupulous merchants or fraudsters, chargebacks seemed like a great idea. However, chargebacks are increasingly used to commit consumer fraud. According to Brian Berkenbile, Senior Vice President of Sales and Support at LOLA POS., businesses, e-commerce businesses in particular, tend to be hit by fraud and chargebacks more often than traditional in-store transactions, due to the card not present nature of their transactions.

“Last year alone, e-commerce businesses lost nearly $7 billion because of chargebacks. During that same time period, general e-commerce fraud rates spiked by 33%,” Berkenbile said. Furthermore, by 2020, $31 billion in losses are expected due to chargebacks. In today’s highly-competitive and dynamic business environment, merchants simply cannot afford to lose their already-narrowed profit margins to fraudulent transactions like chargebacks.

Software Integration

Software compatibility including successful integration with a merchant’s existing platform is critical. If a payment processor doesn’t provide this service, business owners are essentially forced to pay to have a developer carry out the integration for them. What’s worse is the fact that once the integration is complete a merchant has no way of knowing how well it will function.

Research indicates that 45% of retailers and suppliers claim to have lost more than $1 million in revenue due to cross-channel commerce challenges, while one in ten have lost upwards of $3 million. What does it mean? As the business world continues to evolve technologically, many payment processors are unfortunately lagging behind.

Customer Experience

Every company claims to offer an “unrivaled customer experience,” but do they really mean it? Payment processors that truly offer dedicated and experienced staff as well as extra customer service and support are the ones that attract merchants and keep them happy. “Email support and help ‘tickets’ aren’t good enough anymore, especially when e-commerce businesses operate 24 hours a day, 365 days a year,” adds Berkenbile.

If help is offered beyond typical 8-5 work hours, and is U.S.-based, that’s a great start. Offering real-time chat support and a help desk with an interactive knowledge base is even better. The best processors also take the time to check in periodically with their merchants to ensure that business is running smoothly and proactively work to solve any potential problems.

Although processing payments is sometimes considered an expensive cost of doing business, processors should really be viewed in terms of the overall services they provide rather than just the fees they charge. LOLA POS. is glad to ensure merchants peace of mind by not only offering the best rates in the industry, but also seamless integration, chargeback control, and a dedicated team of experts ready to assist our merchants in any way. Contact LOLA POS today to learn how we can help your business!

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