comparing saas payment processors

Comparing SaaS Payment Processors: Questions to Ask

What factors influence an organization’s decision to work with one or many SaaS payment processors over another? What qualities are these software developers and technical founders seeking in a SaaS payment processing service? The answer to this question might take many different forms. 

There are a number of questions you should ask each credit card processing company you’re considering before you sign anything. If you’re not careful, you might lose out on valuable services, overpay, or even get scammed. Not every payment processor serves the best interests of your company. 

Therefore, always try to ask the following questions when comparing SaaS payment processing providers.

What measures do they take to protect against payment fraud?

In Europe, payment card fraud is a significant issue. Although SaaS companies may not be the most common victims of payment fraud, it does occur.

The most effective SaaS payment processors have measures in place to identify and reduce these fraudulent transactions. Your payment provider should be prepared to identify potential fraudulent activity and act promptly, regardless of whether the problem is credit card theft involving stolen cards or the credit card chargeback procedure.

Inquire about the resources the provider has available to address transaction issues. Consider finding out how quickly they typically respond to cybersecurity threats. Your clients will undoubtedly ask you questions like these, so take them into account when assessing payment service solutions.

Do I need a long-term contract?

Most SaaS payment processors demand some kind of contract in order to provide merchant services. Even though this isn’t necessarily a terrible idea (especially if it means locking in a lower rate), you need to exercise caution. Some providers may try to force you into a protracted agreement with few options for getting out.

Make sure to learn how long the contract will last if one is required. To prepare for the possibility that you might need to terminate the agreement early, find out how challenging it will be to do so (and the amount it would cost you). It may not be a problem if the cancellation charge is reasonable. 

Do they have an integrated payment gateway?

A payment gateway is a secure channel through which online credit card payments are delivered. Although SaaS payment processors and a payment gateway are separate services, you need both of these to accept credit card payments from customers.

It often makes sense to combine your gateway and merchant services with a business that provides both services in order to save time, money, and stress. If not, managing two services that aren’t meant to work well together will be a constant discouraging factor for you, and you’ll be forced to deal with messy integrations. Which firm do you contact if you suddenly have a transactional issue and your gateway and merchant supplier are separate? For this reason, the payment processing provider must have an integrated payment gateway. 

What is their fee structure?

It would help if you learned about the fees charged by different SaaS payment processors because they all use different fee structures. The three primary pricing models are tiered pricing, interchange, and flat rate pricing. 

When you decide to use tiered pricing, your rate is influenced by the specifics of the transaction. For instance, in-person debit card and non-reward credit card transactions are subject to qualified rates (e.g., the best rates). Mid-qualified rates apply to all types of loyalty and membership cards as well as manually recorded transactions.

International cards, business credit cards, and high-reward cards are subject to non-qualified rates (e.g., the highest rates). A tiered pricing plan is typically not in your best interest if you work in e-commerce. 

With markup pricing, you pay both the markup and the interchange fee charged by the merchant payment provider (which may differ based on the kind of transaction). The markup can be between 0.25% and 2.75%, but it will normally be less if you sign a longer-term agreement or pay a monthly account fee. The only drawback to markup pricing is that the interchange may fluctuate from one transaction to the next. 

You pay both a monthly fee and a modest transaction fee when using flat-rate pricing. Estimating your monthly transaction costs is made easier by the fact that the transaction fee is fixed. Markup pricing is similar, but the primary difference is that you don’t pay the per-transaction interchange charge; rather, you pay a fixed monthly fee.

A variety of additional services, such as customer support, chargeback protection, interface integration, and a merchant dashboard with in-depth sales data, may also be included in your monthly subscription. Getting a decent deal simply means that this may be a terrific way to consolidate and streamline your services.

Are there other additional fees?

Make sure you are completely aware of the cost before deciding to adopt SaaS payment processors. It takes a lot of work to process payments. Different sorts of transactions have different costs attached to them. But it’s crucial to be aware of any unstated costs, such as those for setting up a gateway or a merchant account.

Some companies will even charge monthly minimum fees; if you don’t complete the required amount of transactions, you will be charged a fee or penalty. If you’re just starting out or not raking in a lot of transaction volume, be extra cautious with this one.

Therefore, even if a business may promote one price, the real costs may change after the additional costs are taken into consideration.

Are SaaS Payment Processors PCI Compliant?

Your main priority if you accept payments from customers, is to protect their financial and personal information.

PCI DSS compliance has to be a key component of any company’s security measures. But that isn’t often the case. A 2020 Verizon Payment Security Report states that only 28% of the companies surveyed by them were fully compliant with the Payment Card Industry Data Security Standards (PCI DSS). Regardless of this statistic, always make an effort to know PCI-compliant companies before using their services.

Can they accept a wide variety of payment options?

You can miss out on opportunities for quick growth if you don’t provide a variety of payment options. Customers have preferred payment methods, and if you don’t accept them, at least some of them will leave your site and make their purchases from a competitor. For this reason, you might want to make sure that your credit card processing company can accept more credit cards than just the usual Mastercard, Verve, Visa, and American Express credit cards.

Choose a provider that can accept all of the card payment options and currencies that your customers use. Once everything is up and running, you can add more payment options, such as e-wallets, PayPal, and buy-now-pay-later (BNPL) plans. 

Are they customizable, and how robust is the API?

Having a payment solutions provider that can handle all of your different payment systems is necessary. Check to see if the company is equipped to manage all of your current offerings. The productivity of your company depends on your ability to customize payment systems to your business operations. 

Furthermore, choosing a provider who has a very robust and well-documented API is crucial, given the amount of work needed to set up your payment system. You can easily integrate your existing eCommerce store, CRM, and other systems with the use of a robust API’s documented extensions and webhooks.

How is their customer service?

You’ll need customer service while working with various providers of SaaS payment processors, and it may be required late at night. 

You may need assistance as soon as possible if your payment gateway is offline or if a suspicious transaction occurs. Finding a company that provides flexible customer support is crucial; ideally, it should be available 24/7. Some companies provide both online chat and phone support. So make sure you don’t overlook this feature because bad customer service is among the worst qualities to have in a payment provider.

Some of the things to look out for include:

  • The kind of support they offer. For example, do they have a chat option or phone support? Or is email the only way to contact them? The speed at which issues are fixed depends on how quickly and easily one can contact the support team.
  • How quickly does the support team respond to queries? Waiting for an email response is frustrating and unacceptable when your payments are not being processed. Because of this, their customer support representatives must have different means to reply to queries faster.
  • How can I keep track of an open issue’s progress? Similar to the above, delays and frustration are avoided when issues can be easily tracked down.

Wrapping Up

When comparing SaaS payment processing providers, numerous crucial factors must be considered. It could take a little more time to be familiar with their offers, but when you can move forward with confidence with the right provider, you’ll save a great deal of money and hassle in the long run.

Another crucial point to bear in mind is this: If a business gives you a deal that seems too good to be true, it probably is. In light of this, never be reluctant to ask questions.

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