Face The Biggest Startup Challenges With The Right Payment Processor
Due to the high failures rates of startup businesses, they’ll be numerous questions that you’ll need to answer to assess the viability of your company. However, one of the most pressing questions will usually be how to select the right payment options for your enterprise.
The fact is, there are so many payment options available that selecting the correct one for your business can be unnecessarily complicated. And finding a payment processor that is the right fit for your startup is a tough decision too.
However, you can reduce your list of choices by asking yourself the right questions before you make the final decision. The most logical place to start is looking at your intended audience and the way you plan to sell.
How Does Your Intended Audience Want to Pay?
While customers do appreciate a broad range of payment options, every business should try to tailor their payment options to the audience they are trying to reach. Each demographic will have their preferred means of making a payment, so when you’re drawing up a short list, do so with your ideal customer base in mind.
A good example is mobile payments. Although they have yet to reach their full potential, if you want to attract a younger audience, it is well recognized that they often prefer mobile payments. However, millennials aren’t alone in their preference for mobile payments.
Consumers from around the world also favour the mobile wallet approach. One example is Singapore where consumers are said to prefer mobile wallets like Apple and Google Pay.
Commenting on the research, Richard Hall, Country Manager of Nielsen Malaysia, said:
“There is no doubt that mobile devices and smartphones are changing the way we operate on a daily basis and one of the key changes in progress is how we pay for items, not just online but in our daily face-to-face transaction.”
However, if you decide to accept mobile payments, you probably won’t want to ignore the traditional credit card as it remains one of the most popular types of payment around the world.
How Do You Want to Sell?
There’s numerous ways of collecting payments these days. Think about your approach to sales and ask yourself the following questions to narrow down your choices:
- Will you be selling online, offline a combination of both platforms?
- Do you want a payment gateway and a merchant account or a combined payment service provider?
- Do you need both a static and mobile means of collecting payments?
- Are the payment options you’re considering suitable for your target customers?
- Do you want to integrate payments with accounting or other tasks?
The answers to these questions will help further refine your search and determine which payment options are suitable for your business.
Also, when you’re considering how you want to sell, look ahead to how you see your business is likely to developing in the years ahead – you’ll need payment options that are right for your company now and for the future to reduce the need to upgrade.
Ease of Set Up & Levels of Support
Most startups will want to start accepting payments as soon as they can, and this means selecting a payment method that is easy to implement, even if you don’t have a lot of technical experience.
However, as a startup it’s likely you’ll have limited resources to spend on technical issues etc., so establish the complexities involved in setting up each option, and what support is available from your chosen payment processor.
If you lack technical expertise, ask your payment processor about the support available for setting up a payment gateway or installing equipment; this will help avoid delays in getting started selling.
What Is Your Budget?
Budgets are usually tight for the startup business so you’ll need to keep a keen eye on transaction fees to reduce the amount of money you’ll lose from each payment. For instance, a company like PayPal charges a 2.9 percent plus 30 cents per transaction fee for international companies. And MasterCard have varying fees depending on the type of transaction.
However, transaction charges should be weighed up against over considerations, like the time payments take to clear and get deposited into your bank account, especially if cashflow is a concern.
If you decide to go with a payment processor for collecting credit/debit card payments, identify companies that offer competitive fees to lower transaction costs, and ensure you are clear on:
- Monthly minimum fees.
- Interchange rates.
- Address verification fees.
- Gateway costs.
- Interchange plus rates.
- Leasing and set up fees.
- Any other ongoing fees.
Also, ask if termination fees apply should you wish to leave the contract early and look out for hidden fees.
Now, we’ve covered the specifics, there are also some general considerations you’ll need to think about when choosing payment options/payment processors, such as:
- Does the payment method meet all your business’s needs and those of your customers? The closer the match with your business’s needs and its ambitions for the future, the easier it is to hone in on the payment method and processor that is going to be right for you.
- If you’re using a payment processor, does the company allow you to fulfill the ideal features you want to offer your customers?
- Does the processor have expertise in your sector’/provide tailored services?
- Does your payment choice allow you to use the latest technology to your advantage?
- Can you accept multiple currencies to serve global clients?
- If your startup is considered high risk, can the payment processor cater for you?
There can be a lot of confusion around finding the right payment options for your startup, however, when you start by looking at how your target audience want to buy and how you want to sell, that decision becomes much easier.
In addition to finding the right payment options, you’ll also need to find the payment processor that is right for you, so they’ll be able to provide the additional support that every startup business will benefit from as their business grows.