Five Critical Considerations when Evaluating a Payments Processor
Navigating change is a survival skill in payments. Rapid adoption of new technology is changing the behavior of today’s consumers. They‘re opting for more personalized solutions that remove friction and add value, speed, and convenience. For issuers, remaining static is deadly given the sheer volume of consumer choices that exist today. They must move quickly and sharpen focus on the customer experience– and do so with agility, scalability, and confidence.
Payments processing sits on the critical path to capturing revenue opportunities. The problem is, many traditional payment processing solutions are built on decades-old legacy technology never designed for today’s market needs. Hard coding is required to make even small changes, increasing costs, and creating lengthy program implementation times. New providers, while offering more modern cloud-based solutions, don‘t have the proven reliability and depth of experience required to demonstrate sustainable success. As such, card issuers, FinTechs, brands, and governments looking to remain their customers’ trusted brand of choice have to pick a card processing vendor wisely.
Importantly, technology can‘t be the only consideration. You need to look deeper. Below are five critical factors to evaluate when selecting a payments processing partner:
How quickly can the card processor have a new program or feature in the market? The answers of months and years may have gotten you by in the past, but consumers have no time to wait – they’ll simply go somewhere else. Rapid deployment of a new feature or program in 60 days or less is required for issuers that desire a first-mover designation, or early-adopter reputation. Look for a payments processor with a complete SaaS solution versus inflexible legacy COBOL programming. A processor that puts the controls in your hands puts you on a fast track to revenue.
- Reliability. Payments processing platforms can only make money when they are available. While industry standards call for platforms to be available 99.9% of the time, an issuer must demand better. Every one-hundredth of a percent equates to roughly 7 additional hours of uptime each year. Use your monthly revenue run rate to determine how much revenue is at risk working with a payments processor who provides 99.9% versus one that guarantees 100%.
- Redundancy and security. Does your provider own their own data processing centers, or do they outsource them? How many centers do they have? Do they own their own IP addresses? How many copies are produced from each transaction that flows through the system? How many employees are there to cover critical functions 24/7/365? The answers to these questions will paint a clear picture that either provides you confidence or raises more concerns.
- Audited processes. Everyone says they are compliant but who verifies it? Your payments processor or potential processor should be able to demonstrate key industry attestations. SSAE18 SOC1 & SOC2 compliance, ISO 31000:2108, ISO 27001:2013, and PCI-DSS are certifications you should look for in a payments processor. Certifications with Visa, Mastercard, American Express, Discover and UnionPay also allow direct card network connectivity.
- Management team. Finally, what is the management team’s operating philosophy? What’s the depth of the team? The management team’s vision and direction set the tone for how the company operates, which trickles down to how issues are resolved, escalations are handled, and perhaps most meaningful, how customers are treated and supported.
Finding the right payments processor is a critical step to maximizing your payments program whether it is a debit, credit, prepaid, or credit program. The right partner should provide a secure and reliable platform that will help you get to market faster with innovative customer-focused new features and products that drive revenue and profitability.