What is a Payment Service Provider?
Customers, in general, want flexibility and choice where possible. This is especially true when looking at business transactions, from a financial perspective. Generally speaking, the more payment options a Business provides their customers with, the more likely the customer is to complete the transaction. Looking at an online payment transaction from the front-end is one thing, however, what about the other side? What happens ‘behind the scenes? Important, strategic choices have to be made regarding what Payment Service Providers to use. This brings up questions such as what exactly is a Payment Service Provider? How do I choose the right one? What are the benefits and drawbacks in general? This article will cover the basics of Payment Services Providers and what to look for.
Payment Service Providers are essentially an intermedium that connect merchants to more extensive financial systems. This enables companies to accept certain payment methods from their customers such as credit/debit payments. Payment Service Providers make sure to connect all working parties together, customers, sellers, and financial institutions. This allows Payment Service Providers to provide a straightforward paying experience for businesses and their customers through quick and efficient payment processing. In essence, Payment Service Providers are key factors that keep (mostly) E-commerce businesses running behind the scenes.
We already mentioned that Payment Service Providers are able to simplify the payment process for businesses/customers. What exactly are the key benefits to using a Payment Service Provider? See then main benefits listed below.
Payment Service Providers are able to automate payments by functioning as the process operator for your customers’ transactions. This enables you to save your resources and time and in turn, streamlines your transactional process. Well-known Payment Service Providers like PayPal also allow you to set up automated reoccurring transactions when dealing with, for instance, monthly subscriptions. This takes away a large amount of administrative and operative work that otherwise went into completing these transactions manually. This is especially the case for businesses with many returning customers.
- Reliability and issue-resolving
Large and experienced Payment Service Providers are deemed as Reliable since they provide guarantees when dealing with shady transactions coming from customers or complex payments. They often stand in for missing revenue caused by unsuccessful payments or handle the issue-resolving process themselves. Disputes are handled by the Payment Service Providers which again, contributes to your resource efficiency as you do not need to handle any sticky situations yourself.
- Transparency and clear communication
Most Payment Service Providers are also fully transparent. This means that they allow you complete clarity throughout the whole payment operating process at any time. This, combined with clear and straightforward communication, helps build a strong and reliable relationship with your company. They often provide 24/7 support meaning that issues can be resolved quickly, should they arise. Customers in turn should expect minimum downtime and are less likely to bounce before completing their order.
Now that you have insight on some of the key benefits of using a Payment Service Provider, you might ask yourself, why shouldn’t I use one? Of course, everything comes with downsides or costs. Payments service providers usually charge you a fee per transaction. Some other Payment Service Providers might even charge additional fees such as initial partnership fees or just a monthly fee.
Besides the cost, Payment Service Providers help contribute to the reliability and flexibility of your business in general. This is important to keep in mind as the use of a well-known, professional Payment Service Provider often provides strong benefits as mentioned above that outweigh the cost or investment needed.
It is commonly known that the Financial Technology Industry is growing and innovating at a rapid pace. This results in the introduction of many innovate payment solutions. The paying behavior of customers is changing. You can see this through the increase in completed mobile transactions for instance. The number of contactless payments increase, cryptocurrency has been introduced as an accepted payment in many places, relatively new payment methods such as ‘buy now, pay later’ all these phenomena are strong indicators of the innovative direction Payments and Payment Service Providers are going towards. It is important to keep track of the newest and most popular developments in the Payment world in order to keep up with your competition and maintain a competitive advantage. Many businesses often seek external professional advice to maximize the efficiency of their Payment Providing landscape.
Would you like to know more about how your Business can improve by staying up to date with the latest innovations regarding Payments and Payment Service Providers? Talk to a ModusLink Expert today by clicking here!
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