Third-party payment processors are something new for small businesses or someone who is just starting out. Any new business wants to get up and running as quickly as possible. Using a third-party processor allows companies to accept payments without a traditional merchant account, reducing the time required to process that first sale.
Payment service providers, or PSPs as they are commonly known, allow your business to accept cashless payments almost immediately. Collecting payments from your customers this way is fast and efficient.
Other forms of payment processing can be time-consuming, requiring a “batch-out” process before sending all transactions accumulated by the merchant for payment. This can take days—a long time in the “real-time” world that we have come to expect. When using a PSP however, the processing of transactions is closer to real-time. Each payment is handled as it comes through without having to wait for a formalized batch-out to occur. Additionally, traditional merchant accounts require long-term contracts and pricing may be unpredictable, fluctuating with contract negotiation.
On the other hand, a third-party PSP is quick, efficient, and arguably more flexible than it’s out-moded brethren. Instead of applying for a unique merchant ID—a requirement with previous technologies—everything is handled at the PSP level. The approval process is fast and can be completed online in less than 24 hours. Moreover, there are no long-term contracts; billing is month-to-month in fixed amounts—so you know what you are paying.
In this blog, we will go through the different payment processors that are available and what you should consider when choosing the process that is right for you. We will guide you through the different considerations and help you choose the best options to ensure that every transaction goes smoothly.
What are third-party payment processors?
Third-party payment processors simplify setup by aggregating multiple payment channels into one service. Mobile payment processing, credit cards, e-checks, and the ability to set up recurring payments are all provided through one account—eliminating the need to open individual merchant accounts for each channel.
Third-party processors are a quicker option compared to merchant accounts, which could deter users due to their lengthy application process. Most third-party payment processors approve applicants in a matter of minutes, and this will help you start selling almost instantly. Another advantage of third-party processors is that they offer simple flat-rate fees compared to the complex fee structures offered by merchant accounts. In the following section, we will discuss the different types of third-party payment processors.
Different types of third-party payment processors
In this section, let’s look at the different types of third-party payment processors. Due to their ease of use, and being highly accessible from mobile phones, third-party payment processors have become increasingly popular. These third-party options are competing with traditional merchant account providers—and succeeding. The three types of third-party payment processors that we are covering include online payment gateways, mobile payment processors, and point-of-sale systems.
1. Online payment gateways
These gateways allow businesses to accept payments using their website or online platform. This seems to be the most popular option, as it is simply a matter of customers entering their payment information on a website. In cases such as this, the payment gateway quickly and securely moves funds from the customer’s account and deposits them into yours. These modern payment gateways make completing transactions easier than ever before, simplifying your accounting process!
2. Mobile payment processors
This allows your business to accept and process payments using a smartphone or tablet. Since almost everyone owns a mobile device, mobile payment processors have become ubiquitous. Due to their convenience and cross-platform availability, mobile payment processors have become the go-to system for many businesses looking to streamline their transactions. Additionally, mobile payment processors can be deployed as a stand-alone software solution, or used alongside an existing point-of-sale system.
3. Point-of-sale systems
These systems allow you to accept payments in person, generally with the help of a terminal card reader. The advantage of having a point-of-sale system is that transactions can be made both in the store and while you are on the go. These versatile systems enable business owners to take payments wherever their business might take them.
4 Factors to consider when choosing a payment processor
There are certain factors that you need to consider before you choose to opt for a payment processor. Though third-party processors may seem like a convenient solution, they have certain limitations that make them an inadequate choice for certain types of business.
1. Fees and rates
Payment processors charge varying fees; you need to carefully analyze the charges and rates they offer and choose the one that best suits your needs and fits into your budget. Exploring different platforms is the key to optimizing your company’s financial efficiency.
2. Compatibility with field service software
If you are using field service management software, choosing a payment processor that is compatible with the software you are using is crucial. Ensuring that your payment processor and field service software are in sync will help seamlessly integrate the payment process into your workflow.
3. Ease of use for both business and customers
While selecting a payment processor, it is essential you choose something that is not only user-friendly but also a tool that is customer friendly. To facilitate a smooth customer experience, look for software with a straightforward interface that is complemented by clear documentation.
4. Security and fraud protection
When it comes to online payments, security is always a concern for businesses and customers. It is essential to ensure the information customers share with you is protected. Establishing a secure payment processing system is vital to verify that your customer’s information is safe from fraud and data theft.
Stripe payment processor for field service businesses
While choosing a payment processor, you have a variety of options to choose from; you will need to decide on which one is best suited to your business and your customers. Stripe is a popular payment processor which ticks every box for a field service business with its array of features ranging from ease of use to automated workflows and user-friendly integrations.
Stripe consists of a set of APIs and pre-certified card readers. Although it is not an out-of-the-box POS system, the Stripe terminal allows you to seamlessly add payments into the checkout process of Zuper’s field service management software or embed them directly into a mobile application and web point of sale. Learn more about Zuper’s integration with stripe here.
In today’s technology-driven environment, it is of utmost importance for field service businesses to implement a payment processor if they are to use their resources optimally. There are many benefits to using a third-party processor, like quick setup and low startup costs—much less expensive than a more traditional countertop card or POS system. Additionally, third-party processors are run by people with technology backgrounds, making it easy to integrate with your existing systems.
We should also consider the fact that technology has limitations, and account stability is something you must consider when it comes to a third-party processor. There are also limitations when it comes to accepting specialized cards. It is also recommended to follow PCI compliance guidelines to minimize any chance of a fraudulent transaction.
Finally, having a third-party processor will help streamline your field service business and give your customers flexible payment options. The decision to choose between a third-party processor and a traditional merchant account would depend entirely on the requirements and the size of your field service business. Both these processes have their advantages and disadvantages, you will need to choose between the best monthly fee that suits you and the service that provides the best customer service, and there is no one size fits all for every business. You will need to choose which system works best to provide value to your business.