Insights
Finding the Best Merchant Payment Processing Options for Your Business
By Andy Peters
There are many ways to get paid—which ones work best for your specific needs?
When it comes to managing a business, ultimately it all comes down to taking in money for the products or services you sell—but it’s not as simple as it sounds.
Technological advances in payments hardware and software have provided merchants with countless beneficial new features. But the innovations have also created what sometimes seems a bewildering number of options.
It certainly stands to reason that a business owner would need help sifting through the seemingly endless options for payments today. With something as critical as accepting payments for your company's work, experts suggest that business owners let a professional guide them to the best merchant services solution. That requires in-depth analysis of a company’s specific needs.
“From a product standpoint, we look to see what solutions are out there,” said Disha Lal, e-commerce and cards manager at East West Bank. “The payments landscape is changing rapidly, and we found a holistic solution.”
Countless options
Consider just a few of the different types of payment systems—mobile wallets, laptop or desktop-based online bill pay, peer-to-peer money transfers and touchless payments. Merchants must also be mindful of real-time payments and so-called faster payments—technological innovations that will soon become a widespread reality.
Merchants should seek out a full-service bank that can meet the needs of businesses of any size or complexity, that can make available any possible payments platform, Lal said. They should be able to allow a merchant to accept payments from any major credit card and from mobile-payments apps, both of which can help maximize businesses’ revenue streams.
“The payments landscape is changing rapidly and we found a holistic solution.”
It makes sense why banks and fintechs have poured so much effort into developing new payments services—people are increasingly forgoing cash. The total number of debit and credit card payments in the U.S. grew an average of nearly 9 percent a year between 2015 and 2018, according to a Federal Reserve System study. The total value of those payments rose about 28 percent to nearly $7.1 trillion during that period.
Interview process
Dustin Sullivan, national merchant sales manager at East West Bank, has developed a tried-and-true method for sorting out the choices for business owners. When Sullivan meets with a prospective client, he begins by sending a questionnaire—the merchant’s answers help him set the parameters for what the business owner wants and needs.
Questions include what types of cards they use for making payments, and how customers pay them. What follows is an in-depth interview between Sullivan and the potential client to flesh out the answers. The process allows them to create the optimal menu of choices.
“It’s a fact-finding mission,” he said. “We create a grocery list so we know what they need. There really are no two merchant accounts that are exactly the same. They’re all different.”
Take, as an example, the growing popularity of Chinese families visiting the U.S. for vacations. Chinese tourism is not something that many merchants can handle. But East West can provide business owners with the ability to accept payments from the most popular Chinese services, including WeChat Pay, Alipay and UnionPay.
“It’s a fact-finding mission. We create a grocery list so we know what they need. There really are no two merchant accounts that are exactly the same. They’re all different.”
Cost concerns
Expense is certainly one of the main motivators for a business owner to seek changes in their payments vendor, Sullivan said. Profit margins on payments transactions are razor-thin, but the right solutions can, in some cases, help customers find ways to save money. Some businesses have realized savings of up to 2-3 percent of their total expenses for payments.
“There are some people for whom we have saved an insane amount of money,” Sullivan said.
The cost to install a new payments system is typically negligible and can be completed in as little as 24 hours, or could take up to a week, depending on complexity, Sullivan said.
Cybersecurity concerns are also top-of-mind for many businesses, especially when news emerges of a high-profile company or organization that’s victimized by a hacking incident—think of the recent hack of the social media accounts of several NFL teams.
“We definitely see a spike in calls when there has been something on the news about a major data breach,” Lal said. The bank you choose for your merchant services should have the capabilities to help protect your business from cybercrime and fraud, because they are interrelated.
Although cybersecurity is a major concern, many business owners and their customers have a less-than-complete understanding of how the payments ecosystem works. About 80 percent of banking consumers are not fully aware that financial apps or third parties may store their bank account log-in information, according to a recent survey conducted by The Clearing House, a trade association for the banking industry.
Customer service is key
The most important factor for a business to contemplate is not cost, cybersecurity or high-tech innovations. Instead, a merchant should seek the best customer service, Sullivan and Lal said.
Expert insights can help a business owner get the best value from their payments platform, so they maximize the return they get for their hard-earned work. Sometimes, Sullivan said, that means helping a customer realize that the latest technological innovation may not serve his needs very well.
“It all goes back to serving the customer,” Sullivan said.