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10 Questions To Find the Right Payment Gateway For Your Business

Have you been looking for a payment gateway that can help you collect card payments for your business? You’ll need to look at what you’re getting out of a suitable provider. Here are ten questions you can ask to help you see who you should be hiring for your needs. 

  1. What will it cost for you to set up your plans and to process payments?

Each gateway will charge different setup fees for work. These include charges to secure your account and to test your connection. You could spend at least $1,000 to set up your gateway.

A gateway will also charge a percentage of your transactions. The percentage will vary surrounding the type of card, the card network, and your risk level. You may spend more to process these payments if you are at a higher risk of chargebacks and other threats.

A gateway may charge about 2 to 3 percent for each transaction. A flat fee of 10 to 30 cents may also go alongside that charge. The totals can add up after a while, as they can cut away from your cash flow and profit margin.

  1. How will you collect your payments?

Payment gateways come with different platforms for how they will help you collect payments. Some systems can move your funds through an escrow system. A system will withhold your funds and will deliver them to you when the funds are ready to be safely transferred.

You could also use a hosted payment page you can redirect your customers to when asking for data. It doesn’t take as much time to integrate this option.

The way you collect your payments can influence how long it takes for you to see your funds. Some providers can hold your funds or a percentage of them for up to thirty days. The timeframe can increase based on your risk and the payment network’s rate of traffic.

The gateway you choose should provide prompt access to your funds. It should also be transparent when explaining how you’re collecting your funds with details on where they are coming.

  1. What are the security features?

All payment gateways should offer PCI DSS compliance. Proper compliance means a gateway will protect all card data and will prevent cardholder data from being stolen or otherwise mishandled. All cardholder content will only be made accessible on a need-to-know basis. All CVV numbers must also be discarded after use to ensure potential thieves cannot steal this value needed for CNP transactions.

Some processors also use tokenization to protect cardholder data. Tokenization replaces card info with unique strings of numbers that hackers cannot decode or utilize.

  1. What fees are there beyond the card processing charges?

Many gateways will charge various fees for their services. The charges go beyond what you would spend when first setting up your account. These include PCI compliance fees, data access fees, and other assorted charges. You’ll also have to pay fees on chargebacks, but you won’t spend anything on those if you never deal with chargebacks. All fees cover the costs to operate the network while also covering possible risks you pose on the network.

The totals you will spend on these fees should be fixed, unlike what you would spend on your payment processor you hire should be transparent and direct over what fees you would spend on services before you start.

  1. How can your processor screen fraudulent activities?

All businesses are at risk of credit card fraud, although some industries may be at a greater threat. A processor should provide suitable screening tools to help you prevent fraudulent activities from impacting your business. A gateway can include support for CVV transactions, two-form authentication, and other features that reduce the risk of fraud.

  1. Can your processor handle international payments?

Some processors can support international payments. These include ones that support multiple languages and currencies. You can use this if you plan on doing business with people in multiple countries. But some processors may also charge fees for handling different currencies or cross-border transaction efforts.

  1. How does the customer service department work?

The customer service department should be available to help you with whatever transactions you want to complete. It should offer multiple ways to reach them, including by phone or email. The customer support team should be easy to access at any time.

The help should also be free to all members. Any group that pays extra to help someone access a customer service line might not be legitimate.

  1. Can a gateway work with whatever features you have in your current system?

Not all payment gateways are compliant with whatever systems you might incorporate. You might need unique hardware or software to read some features. A quality gateway can work alongside whatever hardware or programs you are using now. The system provides quality help and reduces the need to develop new programs or setups for work.

  1. Does a gateway support recurring billing?

Recurring billing entails automatically billing customers for certain things. Subscription-based systems regularly use recurring billing features to ensure they collect funds from customers as necessary. Look at whether your gateway or processor can handle this feature if you plan on offering a recurring billing service.

  1. Can your gateway manage mobile payments?

The last point to review involves how well a gateway can handle mobile payments. A gateway can include a dedicated app or hardware program that can work on mobile phones, tablets, and other portable devices. It helps you collect payment data and content from anywhere.

These factors are good points to see when looking at how you’re going to handle your mobile payments. Be sure when finding a suitable solution that you have an idea of what you want to get from your business. It will be easy to process mobile payments if you know what is coming out of your setup.

Customer Service: A Big Challenge for Payment Processors

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The credit and debit card industry thrives on payment processors and the services they offer; unfortunately, customer service and support seem to be taking a backseat to other factors for many companies. At Host Merchant Services, we believe there is an unfortunate financial motive at play that explains why this is happening.

Consolidation is one of the reasons customer support seems to be lacking these days among the biggest payment processors. Investment bankers see great potential in this industry, and they are approaching big players to make them even bigger players. And therefore customer service has become a big challenge for payment processors.

Once an investment banking firm starts working with a payment processing firm, the prospect of a merger is never far behind. This is how Wall Street operates, and this is how major payment processors acquire their peers and get bigger. Unfortunately, this is also how customer support goes away.

The problem with these consolidated giants is that their customer support platform begins to suffer through growth. Value-added services start piling up, and the smaller merchants will take them because they are bells and whistles, which are always very appealing. The problem is that these features are offered at the expense of customer support. These companies become so large they have to use call centers where you are put on hold for a long period and speak with representatives who aren’t very helpful or knowledgeable about the industry and your account.

Granted, there is nothing wrong with a processing firm offering some bells and whistles for their customers such as free equipment. This would be a very valuable feature for a smaller business that is either starting or expanding to add a new location. In this case, the merchant would love to get new credit card terminals for free, but what about support for this service?

When payment processors offer too much and get too big, they tend to become merchant technology companies. This is when Wall Street investors recommend scaling back on customer support, which is a costly proposition for processors. This is also when online help desk packages are rolled out to replace call centers. There are some large credit card processing companies out there that don’t even have a phone number to call if you need help or would like to sign up. It’s not even an option, which we don’t think is right.

At Host Merchant Services, we believe that customer support is of greater value than the gimmicks the big guys offer. We also believe that customer support will be the next frontier of the credit card processing industry. Once big processors start losing market share due to inadequate merchant support channels, the industry will once again pay attention to this important aspect of the business.

The Importance of Customer Service In The Payment Processing Industry

In the dynamic world of payment processing, customer service plays a crucial role in ensuring smooth transactions and building strong relationships with merchants and consumers. Why is it so important? A knowledgeable customer care representative can handle difficult customers efficiently and help in the growth of the company. On the other hand, a bad customer care executive can ruin the deal and also destroy the company’s reputation.

Good customer service helps to build trust and confidence in the merchants as well as the customers. And especially when it is about any financial information trusted customer support is crucial. With a skilled customer support team any payment processor can easily develop a sense of reliability and enhance reputation.

Efficient customer service reduces frustration for all parties involved. Imagine waiting endlessly on hold or receiving generic automated responses when you need urgent help! Payment processors that prioritize personalized support not only save time but also ensure that issues are resolved quickly.

Outstanding customer service can lead to increased loyalty from both merchants and customers alike. Building long-term relationships requires going above and beyond mere transactional interactions. By delivering top-notch support consistently, payment processors can create lasting partnerships based on trust.

Any payment processor depends on fast and better payment processing and a strong and reliable customer support and service mechanism.

Quality Customer Service: Biggest Challenge for Payment Processors

Quality Customer Service: Biggest Challenge for Payment Processors

1. High call volumes: For any customer service team high call volume is not a positive sign. If the call volumes are high then delays are natural. The delay starts with the call of the customer when no executive is free to take the call. The second part is resolving the issue after understanding the query or problem of the customer. This can lead to long wait times and frustrated customers.

2. Complex technical issues: Payment processing systems are complex, and when something goes wrong, it can be challenging to troubleshoot and resolve the issue quickly. Technical glitches or system downtime can significantly impact customer satisfaction.

3. Lack of communication: Effective communication between payment processors and their customers is crucial for providing quality service. However, there are often gaps in communication channels, leading to delays in resolving issues or providing updates on account statuses.

4. Fraud prevention: Payment processors must constantly stay vigilant against fraudulent activities that could potentially harm their customers’ accounts. Balancing security measures while ensuring a smooth user experience can be difficult.

5. Limited support hours: Many payment processors have limited support hours, which may not align with the needs of all customers who require assistance outside traditional business hours.

6. Language barriers: After globalization, many payment processing services provide their services globally. Language in different regions of the world varies and it leads to a strong language barrier. Language barriers become a significant challenge for customer service representatives trying to assist non-native speakers effectively. For the company, it adds more expenditure to hire and train customer support staff to cater to customers of different languages.

7. Ongoing training requirements: Customer support and services are always evolving. Therefore it is important to update the staff with proper training and orientation regularly. With evolving technology and industry regulations, payment processor staff need continuous training to stay updated on best practices for handling customer inquiries and concerns.

8. Integration issues with third-party software: Some merchants use third-party software that integrates with payment processor systems but may encounter compatibility issues or difficulties during implementation or troubleshooting processes.

9. Slow response time from other stakeholders: Occasionally, resolving certain customer queries requires coordination with external parties such as banks or card networks; however obtaining timely responses from these stakeholders can sometimes pose challenges

Strategies for Improving Customer Service in the Payment Processing Industry

Strategies for Improving Customer Service in the Payment Processing Industry

1. Prioritize Training: One of the most effective strategies for improving customer service in the payment processing industry is to prioritize training for your customer service representatives. Ensure that they are well-versed not only in the technical aspects of payment processing but also in providing excellent customer support.

2. Enhance Communication Channels: Customers want quick and easy access to the customer service representative. By offering multiple communication channels like phone, email, live chat, etc can lead to a good customer experience. Additionally, a comprehensive FAQ page on your website can help to answer the most common questions for your customers. Make sure these channels are easily accessible and staffed by knowledgeable representatives who can quickly address any concerns or issues.

3. Implement Self-Service Options: Empowering customers with self-service options can significantly reduce wait times and enhance their overall satisfaction. Provide online portals where customers can access account information, make payments, or initiate refunds without needing to contact a representative.

4. Monitor and Analyze Customer Feedback: Customer feedback is crucial for any company for improvement and growth. Therefore, payment processors should regularly monitor and analyze customer feedback to identify areas of improvement within their customer service processes. Use this valuable information to proactively resolve issues, streamline workflows, and enhance overall satisfaction.

5. Invest in Technology Solutions: Technology is ever-evolving. You should be ready to accept and implement new technologies in your customer service system. AI can easily reduce the burden on your staff by handling customer inquiries efficiently. Technologies such as artificial intelligence (AI) chatbots or interactive voice response systems (IVRs) to automate routine inquiries or provide instant responses outside regular business hours.

By implementing these strategies, payment processors can strengthen their relationships with merchants while fostering loyalty among end-users who rely on seamless transactions every day

The Death of E-Commerce? [2023 Update]

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I just sat down at my desk and took a few moments to read Antonio Regalado’s fascinating column on E-Commerce from MIT Technology Review. I recommend it to anyone who runs a business, or really anyone who plans to buy something in the next month or two — you know, during the Holiday Shopping Season.

It’s That Time of Year Again

With that holiday shopping season right around the corner the media spotlight on E-Commerce is about to get dialed up a few notches. The standard media grind of finding a new story to keep things fresh, yet rehashing the same old topics over and over again, is really quite fond of the E-Commerce tale since it basically hits every mark needed in a story this time of year. It’s well trod ground (retail sales figures during the time of year when people flock to shop retail), it’s fresh and flashy (buying with a smartphone is the new “it” thing) and it’s easy to write about (everyone’s got a smartphone and in between texts can probably offer an opinion about the story).

So there’s going to be a flood of “E-Commerce, it’s not just for kids anymore!” style pieces written, along with chart after chart of how many billions of dollars are being spent on products through the whiz bang-up new gimmicks of smartypants phones and interwebs tubes (it’s not a truck, but it powers a fleet of delivery trucks!)

It’s this pending recycle of the news cycle that Regalado’s piece really underscores. It’s starts with the subhead of the article, “E-commerce is an idea whose time has come and gone. Here’s why.” A bold statement when placed up against the pending flood of stories that are going to tell us that E-Commerce is (still) the next big thing.

But that’s the hook of Regelado’s article. And it certainly worked its magic on me and got me to read it.

More Than Meets the Eye

Regalado’s point isn’t that E-Commerce is done. It’s more that it’s becoming part of the everyday fabric of retail business. So he’s saying that E-Commerce has been merged into a total shopping experience and is no longer a new gimmick.

The article really slams this point home when it quotes Chris Fletcher, a research director at Gartner (who we here at HMS have used data and graphics from on this very topic). Fletcher told the MIT Technology Review’s Business Report, “we should stop calling it E-Commerce and call it just commerce,” and suggested that it’s really just a part of the shopping experience now.

This quote called up more than a few variants of the corny joke, “In China, they just call it food.” But the point is very well taken this year, and is something we’ve been alluding to for two years now at Host Merchant Services: The whole shopping experience has blending together with Online and Brick and Mortar since the very beginning.

Days of Future Past

This has really obvious but powerful ramifications for our company. As more and more people just accept online shopping as much a part of the process as window shopping or catalog shopping, the amount of credit and debit card transactions continues to increase. Those are the two most common methods of payment in this online environment. And so as the business evolves to the point where popping into a Macy’s ends up auto-texting you a free discount code on your next Macy’s purchase, payment card transactions become the norm.

Keeping an Eye on Heat Mapping

Oh and Regelado’s article really dives into that bit with your location spawning discounts:

” Threatened by the growth of low-cost online merchants, traditional retailers are reacting by following customers onto the Internet. Macy’s does it as well as any. On its website, it installs 24 different tracking cookies on a visitor’s browser. On TV, it runs ads with Justin Bieber that urge millennials to download its mobile app, which tells them which of the chain’s stores is closest to their location. Once inside, they can use the app to scan QR codes on a pillowcase or a pair of shoes. Online orders now ship from the backrooms of 500 Macy’s stores that this year began acting as mini distribution centers.”

Omnichannel marketing is the buzzword associated with this. But it’s something we’ve been discussing at HMS for awhile now. Our partnership with Barclay’s Mobile app opened this slick marketing tactic up to us ages ago. It’s really quite clever. The business uses its connection to your phone (and thus your own transaction history, your GPS location, as well as data that it can find in various places like social media) to track your buying habits.

I remember the first time the heat mapping aspect of Omnichannel Marketing was explained to me by HMS Tech expert Ken Hemmel.

He described a system where I’d be walking along on Main Street in Newark, which was where the Barclays app was being targeted, and I’d pop into a restaurant. I’d buy a meal and have a glass of a particular wine with that meal. The information would then prompt my phone the next time I walked past a wine and spirits store that was participating in the program. And I’d be given a coupon code to save money on a bottle of that kind of wine I had with my meal. This would combine transaction history, with GPS location and turn into an aggressive marketing tactic to get my business.

A Whole Store in Your Pocket

Another salient point Regelado’s article made really resonated with me personally. The article cites US Census economic data and states that only 5.2 percent of US retail purchases were made online in 2012. But then the article cites the effect of online research, noting that 80 percent of BestBuy customers said in a survey that they already searched for price information online before making a purchase in person. And that a third of them do so on a phone while inside the store.

So the last two purchases I made at BestBuy were an HD TV, which I searched for information on while in store, and a computer which I was shopping for online before I went there. I fell right into those statistics. I wanted to comparison shop and read reviews before making the purchase and had the device right there in my hand that let me do exactly that.

The only thing that held me back from ordering either  of these items completely online was impatience. I wanted the item that day. Which is exactly what Relegado’s article also gets into:

“But now [Amazon] and other Internet companies, including eBay and Google, are investing in same-day delivery—getting goods to people just hours after they order them. With their drop boxes and fleets of delivery cars, they’re bidding to eliminate one of physical retailers’ main advantages: immediate gratification.”

The suggestion is that technology is pushing retailers to evolve. They embrace social media, and online power, and create a shopping experience once again tailored to meet the needs and convenience of their customers.

Been There, Done That?

It reminds me of Warren Ellis and Darrick Robertson’s groundbreaking comic book, Transmetropolitan. Set in a Bladerunner-on-acid style future and revolving around a pastiche Hunter S. Thompson-inspired Gonzo journalist named Spider Jerusalem, the comic had a very humorous but also telling take on marketing and advertising in our near future. It suggested neural advertising bombs delivered directly to our brains, tracked by our own viewing habits, to offer us the products we’d be most interested in. As deft and powerful as that future marketing blitz was shown to be in the imaginary world of Transmet comics, the reality is we’re about to be in on the beta test of that entire concept with the way retail is evolving through E-Commerce.

Tokenization Makes Card Use Safe

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Safeguarding Stored Cardholder Data with Tokenization

In this era of connectivity, consumers are increasingly concerned about the safety of their personal data. Leaders in the merchant services industry are actively engaged in developing new ways to protect customer information. Here at Host Merchant Services, we commit to security by providing our clients with tokenization, the most secure type of cardholder information storage available today. This system has enormous potential for any company that regularly utilizes credit card processing.

Tokenization involves taking in cardholder data and returning a token, a string of letters, numbers, and characters that represents and stands in place of the original data. Each token serves as a pointer for cardholder information, which is securely stored offsite in a cloud-based database. Since tokens do not contain cardholder data in and of themselves, they are essentially immune from the threat of hackers and identity thieves.

Tokenization And PCI Compliance

Tokenization and PCI Compliance

Through data tokens, merchants can safely store customer information with payment gateway providers like Host Merchant Services. This system is particularly well-suited for companies that charge customers on an ongoing basis. For example, businesses that offer subscriptions or memberships generally charge clients around the first of the month.

Storing large amounts of cardholder data for this purpose can create PCI compliance headaches. Essentially, when a merchant retains and stores a customer’s card information, it changes the level of compliance they have to adhere to for PCI DSS standards. You can review PCI Compliance in more detail here, but Tokenization helps to alleviate some PCI issues for merchants and boost transaction security at the same time.

Instead of storing cardholder data on-site, merchants can store tokens and simply pass these tokens to their payment processors at the appropriate times. Upon receiving these tokens, processors use the tokens to pinpoint cardholder data and generate unique credit card transactions. This system is fast and efficient while minimizing the risk of fraud and identity theft.

Helping  Businesses Small And Large

Helping  Businesses Small and Large

Token systems are ideal for smaller companies seeking to reduce their PCI compliance burdens while maintaining impeccable customer security. That said, companies of all sizes use data tokens to simplify their operations. For example, a tokenization-based payment processing system is useful for closely managing even a large-scale customer rewards program. The ability to store the tokens securely while not compromising customer cardholder data, lets a large company deftly keep track of and maintain their rewards program.

As credit card processing becomes ever more critical for modern commerce, many more companies will adopt this robust system of safeguarding customer data. Here at HMS, we are proud to offer tokenization as an integral part of our Transaction Express payment gateway.

A payment gateway is a system of technologies and processes that allow merchants to electronically submit payment transactions to various payment processing networks (i.e., the Credit Card Interchange and the ACH Network). Payment gateways may also provide merchants with transaction management, reporting, and billing services. Payment Gateways essentially bridge the gap between web-based payment options and credit card processors.  To take payments in a store, you must have a merchant account, to take payments online you must have a payment gateway.

Beyond the in-house Transaction Express gateway, Host Merchant Services also supports a variety of other Payment Gateways for your payment processing needs. We are able to customize a payment processing solution that fits your own individual needs. Here is a brief list of the Payment Gateways we support directly.

Services like the ones Host Merchant Services offers demonstrate how the payments industry is working tirelessly to prioritize information security.

Benefits Of Tokenization In Payments

Benefits Of Tokenization In Payments

Tokenization within the realm of payment gateways involves substituting payment information, like credit card numbers with an identifier or token. This token serves the purpose of enabling transactions without exposing the data. There are advantages to using tokenization in payment gateways;

  1. Enhanced Security: Tokenization provides security for information by preventing access and reducing the risk of data breaches. Since intercepted tokenized data is useless without the tokenization system it holds no value for attackers.
    PCI DSS Compliance; Compliance with Payment Card Industry Data Security Standard (PCI DSS) is crucial for businesses that handle cardholder data. By minimizing storage and transmission of information tokenization helps reduce the scope of PCI DSS compliance audits.
  2. Risk Reduction: Replacing card details with tokens significantly decreases the risk of transactions. Even if a token is somehow intercepted it cannot be easily exploited for transactions without access, to a system.
  3. Simplified Compliance: Tokenization assists in meeting regulations related to data protection and privacy.
    It ensures that customer data, which is sensitive is handled securely and in compliance, with requirements like GDPR, HIPAA, and others.
  4. Efficient Operations: Tokenization simplifies the process of integrating payment gateways into systems. By eliminating the exposure of card data during transactions developers can focus on integrating with the tokenization system making it a straightforward process.
  5. Building Customer Trust: Businesses that prioritize the security of payment information are likely to gain customer trust. Tokenization showcases a commitment to safeguarding customer data fostering trust and confidence in the brand.
  6. Convenient Recurring Payments: Tokenization proves advantageous for businesses offering subscription services. Once a card is tokenized it can be utilized for recurring payments without customers needing to enter their card details.
  7. Accelerated Transactions: ** Processing Speed;** Since tokenized transactions do not involve transmitting the information they can be processed rapidly resulting in enhanced efficiency, in payment processing.
  8. Support, for Multiple Channels: Tokenization can be used in payment channels, such as mobile and in-store transactions. This flexibility makes it a versatile solution for businesses that have payment requirements.

In essence, tokenization in payment gateways offers a security measure that minimizes the chances of data breaches and ensures adherence, to regulations. Improves the overall effectiveness and reliability of payment procedures.

MCX, Paydiant, and the Battle Over Mobile Wallets [2023 Update]

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The mobile Internet revolution is rapidly changing the longstanding status quo in the payment processing industry. As more people purchase items with their mobile devices, the public is demanding more options and greater security from transaction processing companies. For many long years, big banks and processing companies like Visa and Mastercard faced little competition and were free to change processing fees at will. Today, the upstart MCX network (Merchant Customer Exchange) is making a strong bid to compete in e-wallet services. This consortium of retailers recently added Kohl’s  to its roster of members. The cooperative already includes major players like Walmart, Target and Best Buy. Formed in August 2012, MCX has stated its intention to better protect consumer data, lower processing fees and otherwise improve conditions for mobile shoppers.

In many ways, MCX represents the most forward-looking hopes of the retail industry. Though the network is not fully operational, industry watchers are fascinated by the ways that MCX could change the e-commerce  landscape. In its bid to create a viable alternative payment network, MCX seeks to emulate the success of Paypal, the most successful independent online transaction processor. With its focus on mobile purchasing, MCX shows a feel for the developing trends of modern commerce. As the battle over mobile payment fees heats up, many consumers aren’t aware of how their payment choices effect the underlying struggle for lower fees in the mobile commerce sector.

Increasingly, large banks and financial companies are bringing enormous resources to bear in their efforts to woo mobile consumers and prolong their dominance. While these large institutions are currently making concessions to secure their position in mobile payments, one could persuasively argue that more choice will lead to greater satisfaction for participants in mobile commerce.

MCX Logo

Of course, MCX faces an uphill battle in its quest to change modern payments. Major banks and Interchange processors have rallied around Paydiant, the mainstream platform for e-wallet services. Though far from perfect, Paydiant has won broad acceptance for its widespread relevance and ease of use. Over the next few years, the competition between MCX and Paydiant will represent one front in the all-out war to control and define mobile payments. At the same time, Paypal will likely make every effort to extend its commanding position into the mobile commerce sector. While Google Wallet has yet to make major gains in mobile processing, it is never wise to underestimate the potential of this groundbreaking corporation.

Every month, dramatic numbers of people start using mobile payments to purchase goods and services. Familiar with brands like Visa and Mastercard, many of these consumers will gravitate towards Paydiant. At the same time, MCX has hired media-savvy personnel to potentially launch their brand into global prominence. If any group has a real chance of changing the status quo of modern transaction processing, it is MCX.

Paydiant

Compared to monolithic financial companies, retailers are arguably better poised to meet the changing needs of modern consumers. Only time will tell which mobile processing network will achieve the same kind of dominance that Paypal has realized in online payment processing. Though consumers are fairly loyal to major financial brands like Visa, the new decade tells a tale of increased public hunger for technological innovation and greater choice. Whoever succeeds in dominating mobile online payments, it is likely that consumers will experience a new era of speedy, secure transactions. As mobile devices continue to revolutionize modern culture, people from all walks of life will learn to appreciate the ease and convenience of doing business through cell phones and mobile devices. Experts can only guess at how many middle-class consumers will ultimately execute most of their daily payments online.