Selecting a Payment Service Provider


Written by Editorial Team

Published May 2018

In this article...

There is nothing more important for an online business than a reliable, secure link between its paying customers and the bank. And in simple terms, that’s exactly what a Payment Service Provider (PSP) is: your link to the bank.

Your chosen PSP should provide all the necessary solutions for your business to accept payments online. That includes a means for transferring sensitive customer card and payment details from the internet to the acquiring bank for processing funds to an Internet Merchant Account (IMA).

In some cases, a PSP can further simplify things by also providing you with an IMA, rather than you arranging one separately.

What they should do for you

Either way, it’s the PSP’s role to provide you with an online solution for accepting electronic payments from credit and debit cards. This means directly or indirectly supporting your website in processing card payments and allowing you to accept payments via other media, such as mail and telephone. The PSP should also help ensure your security and provide tools to reduce card fraud – a problem that can severely damage the performance of any business not properly protected from cyber crime.

Your requirements will vary depending on the type and size of business you are. A PSP might host secure payment pages on your behalf, or offer a means for you to supply payment details remotely and obtain real-time authorisation responses. Many PSPs will supply a range of other complimentary software as standard, such as a ‘virtual’ online terminal for processing manual transactions, or a range of online reporting and management tools. You have no choice

It’s true. Any business wishing to accept online card payments MUST have a PSP in order to transfer customer card details and payment instructions to the bank. This connectivity is essential to processing payments to your IMA.

However – and it’s a very big "however" – you do have a choice as to which PSP provides that essential link. For example, your current bank might supply a limited PSP service, but for a full range of payment solutions, you will require a dedicated supplier, such as Pay360. What you should look for

You’ll only have a real choice if your PSP offers a full range of solutions. So, whether you already have an IMA and require a payment gateway, or need a complete solution that includes the IMA, a PSP should offer you flexible solutions targeted at your needs, not their capabilities. ‘One size does not fit all, so don’t let anyone persuade you otherwise’

So here’s what to look for in a PSP…

A full range of technical solutions

Technically your PSP must be capable of supporting all of your plans. To do this they should offer a variety of ways to collect customer card details and process payments. These are often defined by your own technical expertise. It could mean providing a simple means of redirecting customers from your site to their hosted payment pages. Or maybe you require a way for you to authorise payments remotely. Whatever your requirement, a dedicated PSP should have the solutions to meet it. One size does not fit all, so don’t let anyone persuade you otherwise.

Genuinely competitive rates

Costs (set-up fees and cost per transaction) can vary greatly between competing PSPs, so you need to shop around for the best rates. A fixed monthly fee starts at around £19, but there are some cheaper options available, starting as low as £0.05 per transaction. As a rule of thumb, the higher your transaction volume, the lower the unit cost.

And remember to compare like with like. Ask if it’s a complete solution with inclusive fees or whether you’ll be paying the bank separately on top of that. Will the PSP with those ‘oh-so-attractive’ prices charge huge set-up fees for enabling services – such as deferred payments, a virtual terminal, or subscriptions – that come as standard with other PSPs?.

Upfront costs

The real costs associated with accepting online card payments do not start and end at the rate quote. Look beyond the headline figures and consider the overall long-term operational cost of partnering with each PSP. For example, does the PSP have limited support for fraud management? The cost of flimsy security could do much more damage to your bottom line than any fractional differences in rates.

Reporting and administration facilities

Accepting online payments is only one part of the e-commerce equation. As an online merchant, you need to make sure you can also manage them as efficiently as possible.

Which is why an effective PSP should provide you with the right reporting and administration tools to manage your merchant services… Will you have access to real-time transaction statements? Can you export valuable customer data? Is the reporting sophisticated enough to allow you to answer questions that can better target future sales. For example, how many MasterCards from Belgium were declined last month – and when?

In short, in order to manage your business, you need to be able to access the information necessary to make management decisions. A good PSP should have those tools.

Excellent technical support

A service is not a service unless it’s fully backed up. And a solution becomes a problem if there’s nobody around to explain or implement it. Indeed, in business there’s no such thing as an ordinary day and – all too often – the unexpected does happen.

That’s why you need to know that help is always at hand. Your PSP must be ready, able and willing to provide assistance whenever needed.

Pay360 offers full, UK-based technical support to ensure the very best payment processing experience.

The latest fraud protection

When accepting card payments online, fraud is potentially the biggest threat to your profits. And the threat is mounting.

You can’t safely grow your business if your PSP isn’t ready to ensure that fraud does not grow too. So look for a PSP that provides fraud solutions that not only help eliminate the risks involved but also allow you to safely maximise acceptance rates. If a PSP does not have its own fraud solution, then the chances are that it hasn’t fully understood – or care about – the risks you will face. ‘When accepting card payments online, fraud is potentially the single biggest threat to your profits’

PSPs that can issue IMAs will have firsthand experience of managing chargebacks and therefore, will be proactive in offering solutions to limit this costly threat. In fact, any PSP worth a second glance will offer configurable fraud-screening solutions and authentication mechanisms, such as 3D Secure.

Automated fraud solutions and identity checks are an integral part of Pay360’s online payment solutions.

Security you can trust

Online, the difference between a prospect and a customer is trust. People must feel that they can trust you with their card details. If it all goes wrong and your customers’ card details are compromised, then your reputation is at stake. Visa and MasterCard could levy huge fines or even threaten to blacklist you from running an online business.

Scared? You should be. If your customers are to trust you, then it’s paramount you can trust your PSP to provide the latest security solutions. If you have the slightest doubt, then walk away.

Pay360 has been certified to the highest level by the Payment Card Industry (PCI) Data Security Standard for four years running and offers a range of features which can take up the strain of meeting security or compliance requirements.

A full service history

Okay, it’s not a car, but the principle is the same. You wouldn’t buy a vehicle without proof that it’s reliable and the same goes for your PSP-to-be. Losing a sale is bad enough, but losing a sale because your PSP is down or unavailable is a disaster that affects both your revenue and your reputation. And if your PSP were to go out of business altogether, your own business might be sidelined for days or weeks.

So, before committing to a PSP, check its corporate pedigree. Make sure it has firm financial foundations, a good track record and is professionally run. Request references from current customers and don’t be fobbed off.

Also, ask for evidence of a healthy uptime record and check that the organisation actively mitigates the risk of downtime with ongoing investment in infrastructure and capacity.

Pay360 has invested heavily in running systems from multiple replicated locations to ensure high redundancy against failure. It also has its own complete disaster recovery site.

Please feel free to contact us on 0333 313 7160 if you have any questions.


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