As a CFO, you have a lot on your plate from day to day. With having to manage your organization’s accounts and striving to save money through reducing operating costs, choosing a payment processor may be the last thing on your mind. However, the payment processor you select can have major implications for your business. Here are some important aspects you need to consider when making this decision.
In order to have a merchant account, your business must follow the guidelines set out in the PCI Data Security Standard. Each year, you must fill out a Self-Assessment Questionnaire to ensure that your business is in compliance with the PCI requirements. Any reputable payment processor should already be in line with these data security standards and can assist you with filling out the questionnaire.
It is crucial to your business that your customers feel safe in trusting you with their personal information and financial account details. Trustworthy payment processors should have stringent security measures in place to protect against an attack by hackers. Two of the most common are tokenization and Point-to-Point Encryption (P2PE). Tokenization involves assigning a “token” to each customer’s financial data so that there is no need to store more detailed information. P2PE encrypts customer data throughout the entire payment process without saving account numbers or other sensitive information.
EMV is the latest innovation in credit card security and involves placing a microchip in the card. Merchants must then have a dedicated machine to process these types of cards. The microchip makes it much more difficult for counterfeiters to create and use fraudulent credit cards. The payment processor you choose should have the capability to process these types of cards, as it can save your business a lot of money on fraudulent transactions.
As online shopping becomes increasingly more prevalent, you need a payment processor that is equipped to handle online credit card fraud. The processor’s fraud protection tools should be able to detect suspicious activity, like purchase attempts from foreign countries or charges that are significantly higher than the cost of the products or services your business offers.
eCheck (ACH) Payments
ACH payments are often used by businesses to make direct deposit payments to their employees or to accept direct payments from customers. They can also be used to simplify B2B transactions and eCommerce payments. This can greatly streamline the payment process, so look for a processor that offers this service.
Reduced Days Sales Outstanding (DSO)
With the complicated process of invoicing customers, waiting for them to send payment, and waiting for checks to clear the bank, it can sometimes take several months to actually receive the money in your business’ account. By utilizing a payment processing service, you can streamline the process through credit card and ACH payments, resulting in more cash flow for your business and less money held up in accounts receivable.
In managing your business accounts, it is crucial that you have all the necessary data. When you choose a payment processor, look for one that offers an all-in-one service throughout the payment process. This way, they will be able to provide you with data throughout all stages of a payment in clear, detailed reports so you can reconcile your accounts.
It is very likely that you and your fellow executives utilize a variety of software applications in managing your business. Some payment processors can offer integration with popular accounting, CRM and ERP software applications. While not entirely necessary, this integration can save you a lot of time and headaches when transferring data, so look for a payment processor that works with your preferred programs.
Choosing the right payment processor for your business can seem like a daunting task, but the above tips can help guide you in the right direction. Be sure to always do your research before making a selection so that your business can access the best deals, data security and functionality when renewing your current contract or signing up with a new payment processor.