You have spent a long time on your business model; a long time and probably a lot of money developing a website and promoting your business and then it is time to work out how you are going to get paid. For many companies, how they will receive payment is the last consideration for their business and yet it is a decision that can affect your business efficiency, and most importantly your business profitability. Strong communication and an understanding of what you are committing to is an absolute must when selecting your merchant provider but we also recommend avoiding these three common mistakes.
Mistake #1 Not understanding what you are getting, and paying
Your bank or payment provider has given you the best rate, right? What % are you paying – is it a blended rate, tier pricing or an interchange plus pricing? Too often merchants think they have great pricing but a lack of understanding about what they are paying for and the point that charges apply but the reality can be very different. Know where your customers come from, what cards they use and the true cost you are paying.
Also, when you analyse your processing reports don’t be afraid to renegotiate with your bank to get the best prices for your actual activity, not your ideal activity.
Mistake #2 Not researching payment options
E-commerce is all about card payments, right? Not necessarily – in some markets card payments are the be all and end all but in other markets you are missing out if you don’t offer alternative methods. In Germany for instance, 50% of online transactions are completed by non-card means such as SEPA direct debit of Sofort. Most payment providers now days have the facility to provide you with alternative payment solutions and it is typically easy to integrate into the online solution you have. Equally while not limiting the payment options you offer do not just put on everything – take the time to focus on where your market is in the world and if possible, choose the tools most appropriate to those markets.
Selling online gives your business a great opportunity to grow into markets you would not ordinarily be able to tap into. By taking the time to understand the costs, complications, and benefits involved you can ensure that it is productive and profitable decision and not one that burdens your business.
Mistake #3 Not asking for help
It’s fine to be responsible for checkout design and control of your processing account but having ongoing input and support from your provider is an absolute must. You will invariably have issues with the likes of fraud, chargebacks, decline rates, PCI compliance responsibilities and, while larger companies may have the resources to manage these challenges in-house, do you understand the bigger picture, long-term implications repeated issues of this kind could have on your business? These services are not going to cost you anymore but it is better to take advice and support from your provider who has substantially more experience than you, leaving you free to do what you do best which is running your business.