Customers always look for flexible payment options and convenience while shopping or purchasing something. They want to make payments immediately through credit or debit cards or e-wallets to complete the transaction. Considering that everyone from banks to fintech and brands want their card to be the topmost choice of the customer, they must ensure that the cards are fast and convenient to use. Using a decade-old legacy processor will not work in the current times. They need to choose a card payment processor which is fast, scalable, and has the capability to manage the overwhelming number of transactions. Let’s look at the five critical things to consider while choosing a card payment processor.
Five Things to Consider While Choosing a Card Payment Processor
1) Functional coverage: While choosing a card payment processor vendor, the bank must evaluate based on current features and evaluate it based on how it will support in the future. As technologies and customer behavior change rapidly, banks must be prepared to adapt to them seamlessly. For example, customers now prefer to pay their bills through e-wallets. So, the processor should be able to support different currencies and other payment options such as e-wallets. Another factor to look for in a payment processor is the data migration policy. There are instances where data migration either does not take place or is delayed to months. Hence, it’s important to understand the data migration process of the processor before choosing them.
2) Technical capability: A few years ago, Visa doubled their centers to meet the global demand for digital payments – resulting in a massive increase in the number of transactions. To be prepared for such business decisions and plans, banks have to ensure that their payment processor possesses the technical capability to scale and manage the enormous volume of transactions every day. Some factors that banks must consider include:
– Security: Payment Card Industry Data Security Standards (PCI DSS) is a core component of security protocol as it helps banks reduce data breaches, protect the data of customers, and avoid fines or disrepute of any kind. It’s not an option, but it’s mandatory and it’s critical that every vendor is PCI DSS compliant. The vendor must also provide encryption and tokenization features and fraud management and disaster recovery support in case of a data breach or data loss. Additionally, the vendor must support SSL certification and CVV2 verification to secure the transactions.
-Cloud capability: With new payment modes being introduced, most payment processing has evolved into cloud payment processing. The vendor must be able to allow banks to process payments securely on cloud-based infrastructure.
-Data storage: Find out if the vendor owns data centers or relies on third party data center providers, how many centers do they have, and how many copies of transactions would flow through the system.
Apart from these, the vendor should provide a frictionless user interface for easy transactions, easy integration and compatibility with the bank’s existing and proprietary software for seamless operations, and minimal dependency on hardware.
3) Vendor performance: Verifying the vendor’s performance is critical to ensure that they are credible and trustworthy. Banks can burn their fingers and end up with a bad reputation if they partner with unreliable vendors. To begin with, banks must not rely on the vendor’s sales pitch alone. They must perform an independent check to assess the vendor’s expertise and credibility. Collect feedback from other banks with whom the vendor must have worked before. Check online reviews to gauge the general sentiment about working with the vendor. Apart from the independent verification, ask the vendors questions about their operations, how they address challenges and escalations, how the issues are resolved, and how they would support the bank. This will give the bank the clarity of whether they can trust the vendor with the long-term association.
4) Ease of doing business: Given how frequently the customers’ demands change, the vendor should be able to deploy a new feature or program quickly and efficiently to meet the changing demands. Banks should find out how equipped the vendor is to roll out the new features rapidly, what do they include and exclude in the scope of the project. This will help the banks to choose the right vendor. Banks must also check what extent of customer support is offered. For instance, will they offer on-premises support or local support within the country, do they provide 24/7 customer support remotely, and what level of support will be provided. The banks should be comfortable working with the vendor, and the vendor should simplify their processes to support the bank’s innovations to stay ahead of the competition.
5)Total pricing: While choosing a vendor, know all the direct and indirect costs they calculate. For example, it’s a known fact that a payment processor has to pay 2% to 3% of each transaction depending upon the type of card, transaction size, medium of transaction, etc. It is also known that banks would have to pay monthly fees, batch fees, PCI compliance fees, chargeback fees, gateway fees, etc. However, what goes unnoticed is the indirect costs. Banks must check if the vendor charges additional costs such as fees per API call, fees per PDF statement, online reporting fees, access fees, etc. Apart from direct and indirect fees, banks should pay attention to the total cost of ownership (TCO) while choosing the vendor. The TCO involves costs related to fees, hardware and software upgrades, support fees, delays that result in lost opportunity, customer support, change management costs, operating costs, etc. This will help the banks to plan their budgets accordingly.
The global card payment industry is constantly evolving. The increasing volume of card payments has compelled banks to become more technology-driven and agile. Additionally, innovative value-adds like boundary-less transactions and contactless payments have led to stricter regulatory compliances. Considering the complexity and the technical capabilities required in this industry, it’s important to partner with a trusted vendor who can build secure and innovative products based on business needs.
At Verinite, we provide end-to-end services to banks that cover the entire lifecycle of payment processing. We offer support in:
• System Selection
• Program / Project Management
• Business Analysis,
• Development & Integration
• End to end Testing
• Scheme Certification Support
• Specialized services like performance testing
• 24 x 7 Production support
• L1, L2 BAU support
To know more, let’s connect.