5 Common Payment Processing Challenges and How To Avoid Them

August 11, 2020 BigTime Marketing

There are many challenges that can plague a professional service business. Payment processing shouldn’t be one of them. That’s why we've compiled 5 of the most common payment processing challenges businesses face, and how you can avoid them. 

Lack of payment processing transparency 

The myriad different pricing tiers and options make payment processing increasingly difficult for business owners to understand what they’re actually paying for. On top of that, many processors have hidden fees and charge for additional line items not initially disclosed to the business. Higher fees can also be incurred as a business grows. Combined, these fees are one of the most common reasons for complaints regarding payment processing services.

How to avoid it: 

When deciding what credit card processing company would be best suited for your business make sure to do your homework. Find out if the company charges different pricing tiers for different card types. With a tiered pricing model, similar transactions are grouped together and categorized into tiers, each tier is then charged a different rate. Depending on the types of transactions, you could be paying upwards of 4% in processing. 

Try to steer clear of this pricing model and opt for flat-rate pricing options whenever available. Flat rate pricing removes the uncertainty that plagues business owners because there is a fixed monthly rate, so businesses know exactly what they're paying for each month. 

High processing fees 

Another thing to watch out for when considering a payment solution is high processing fees. Business owners work too hard to pay extraordinarily high processing fees. And most have no idea what they're paying for in credit card processing, resulting in them paying high fees without realizing it. 

How to avoid it: 

The first step in avoiding paying inordinate amounts in processing is to understand the breakdown of different fees. The following are unavoidable charges every business must pay: 

  • Interchange - the required fee that credit card companies like Visa and Mastercard charge businesses to accept their cards - set by the credit card brands. 
  • Transaction fees - these are fees that are associated with each transaction run. 

Here are some additional payment processing fees you should watch out for: 

  • PCI compliance
  • Setup fees
  • Account maintenance fees
  • Statement fees

How to avoid it: 

Know what to look for, and run when you see ANY of the extra fees. Choose flat-rate processing so you know exactly what you are paying for and avoid paying varying amounts for different card types. Beware of what fees are necessary so you can make the determination.   

Fraud and chargebacks 

While online payments have added a layer of convenience, they have also opened up concerns of information security. Simply put, online payments increase the risk of information theft. In fact, according to a 2014 report by Symantec, about 60 percent of cyberattacks targeted small and medium businesses with fewer than 2,500 workers. Small businesses are extremely vulnerable to cyber fraud and your business must protect your customers from fraudulent credit card transactions. 

How to avoid it: 

Make sure your business is PCI compliant and protected against fraud. Choose a company that provides support for PCI compliance. For example, BigTime helps its users become PCI compliant within 60 days of signing up for payments, avoiding the penalty fees charged by the credit card brands.  

Lack of support 

With a growing number of customers requiring payment processing, it’s not uncommon for some processing solutions to only provide the highest level of support to their most profitable businesses. When things go wrong, businesses need to know that they are taken care of and will be able to resolve their queries effectively. However, due to the high volumes of support queues and a growing number of businesses using credit cards, it’s not uncommon for support to be delayed. 

How to avoid it: 

Find a company that has around-the-clock support and systems in place to answer your queries so you can operate your business at peak efficiency.  Look for companies that offer dedicated, reliable, and timely support - via chat, email, and phone. A good way to see if a company offers this is by looking at the company’s reviews on sites like G2 and Software Advice

Lack of integration

If you are currently using software to manage your business, you may not want to use an entirely different system just for payments. As a business owner, your main priority should be to optimize your operational efficiencies, and working from two different systems results in a disjointed experience. It may also take you longer to gain insights into your business when you’re working from two different systems. 

How to avoid it: 

Find software that has integrated payments. For example, BigTime provides you with a unified project management software that has integrated payment capabilities so you never have to leave the comfort of BigTime to access other tools - it’s all in one place!

Interested in exploring BigTime’s new payment processing feature, BigTime Wallet? Request your personalized demo to learn more.

 

This post was written by Aliza Sharma, Partner Associate at Fattmerchant.

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