Small Business Payment Processing Challenges

by Raymond Pucci 0

Small businesses are the engine of the U.S. economy—because that’s where most jobs are created. For the business owners, it’s typically making the most out of limited resources of time and money. Payment processing fees are not an area that garners much attention from them. So the following article offers a handy refresher on some key payment fee considerations that will impact any business’s bottom line.

Making money is supposed to be enjoyable, but actually collecting that money isn’t always easy. In fact, the payment processing landscape can be confusing and expensive. There are so many vendors from which to choose. And within each service, there are often way too many options.

Credit card fraud is on the rise worldwide. In the U.S. alone, fraudulent losses exceeded $8 billion in 2015. To fight this growing trend, trusted payment providers follow a set of data security guidelines published by the Payment Card Industry Security Standards Council (PCI SSC) to protect their clients.

However, PCI compliance isn’t enough — even if your payment processor follows the latest guidelines. That’s because thieves continue to develop ways to exploit secure payment environments.

Your processor can provide additional protection through security methods like: Tokenization, Point-to-point encryption (P2PE), and fraud management filters. With real-time protection in place, your business will have a much easier time remaining ahead of the curve.

Many small businesses treat payment processing as an isolated component of their operations. As new transactions come in, these businesses must input the payment data in whatever tools and software they use. However, all of this manual data entry is time-consuming. It’s also prone to human error.

But with the right set up, it’s possible to automate this entire process with payment integration solutions that can seamlessly sync incoming transactions with the accounting, CRM and other software platforms you currently use to run your business.

Unfortunately, small business owners do not have too much leverage in negotiating payment processing fees. However, they do have competing vendors from which to choose. Most vendors bundle services such as fraud management and payments integration with business operations including inventory management, marketing, and staff scheduling. Similar to establishing any other business relationship, business owners must assess multiple vendors, get referrals from trusted industry colleagues and advisors, and read the fine print.


Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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