How to Choose the Right Credit Card Processor for Your Startup
If your startup plans to receive payments (as most do), you’ll want to set yourself up with a credit card processor as soon as possible. This goes for both B-to-B and B-to-C businesses. Of all the startups we’ve surveyed, the most popular credit card processors are Stripe (used by over 35% of the Stacklist community), Braintree (7%), PayPal (9%) and Recurly (4%).
Choosing the right credit card processor can be a difficult process, so here are some tips to keep in mind as you go about selecting the one that’s right for your business:
PCI compliance: Make sure your credit card processor is Payment Card Industry (PCI) compliant. This will ensure that all connected payment solutions never store or transmit unencrypted credit card data, keeping your business secure and your customers’ data safe.
Integration: Can your credit card processor integrate with your accounting system (e.g., QuickBooks, Xero, Zoho Books, FreshBooks)? Having an integrated solution can save businesses almost five minutes of processing time per transaction.
Reputation: Payment security is of the utmost importance these days. Research the provider’s track record with regard to security and fraud protection, and confirm which fraud-protection features the processor has in place. Common features include address verification, real-time processing, Secure Socket Layer (SSL) encryption and card verification value (CVV). In addition, look into the processor’s financial health and confirm that it’ll be around for the long haul.
Flexibility: You’ll most likely want your payment processor to accept all major credit cards and provide real-time processing. Think about your user experience and how flexible you want your payment platform to be. When a customer purchases something from your website, the transaction should be simple, instant and secure.
Cost: The “you get what you pay for” adage definitely applies when it comes to credit card processors. There are certain fees that you should expect to pay, and don’t hesitate to negotiate these with your vendor. These include startup fees, monthly minimum service charges, statement fees, discount rates, transaction fees and address verification fees. Don’t sign up for payment processing services for more than one year at a time—this will give you the flexibility to negotiate pricing for the next year, or switch services if you’re not satisfied.
Customer service: You should be able to count on your credit card processor for 24/7 customer service. Whether it be via toll-free phone support or live internet chat, it’s important to know that help will be there when you need it.
International payments: Does your payment processor accept both domestic and international payments? Stripe has been rapidly ramping up its international capabilities, and Stacklist users love its foreign currency platform.
With so many options available, Stacklist users recommend that whichever credit card processor you choose should be simple and easy to use (both on the administrative and the development side), should integrate smoothly with your other applications and offer detailed tracking data. Perhaps most importantly, from a customer perspective, the transaction experience should be clean and straightforward.