Getting paid

Probably the most important part of running a business is ensuring you are paid. A payment processor assists you with this. They are a company that manages a payment transaction process, acting as a kind of mediator between the bank and the merchant. Put simply, the payment processor communicates information from your customer’s card to your bank and the customer’s bank. Assuming there are enough funds, the transaction goes through.

The term “payment processor” isn’t a universal legal term, and in some cases, it’s used interchangeably with terms like “payment service provider’ or “acquirer”.

How to choose a payment processor

Third-party payment processors are clearly important for any business that wants to take credit or debit card payments from their customers. If you’re exploring using a payment processor, here are some of the key elements you should look out for:

• Compatibility – Ideally, you should use a payment processor that is compatible with the other e-commerce software you’re already using.
• PCI compliance – Merchant Advice Service explains that it’s important that your system is secure because you are storing sensitive cardholder data. You should therefore try to find a PCI-compliant payment processor.
• Fraud – When it comes to accepting payments, fraud is a major concern. Opt for a payment processor that has fraud prevention mechanisms built in.