When you start your own business, there are a lot of things that you must take care of. There are fundamental logistical issues that every business is forced to face. However, they can tackle it with some hiccups. But one thing that most companies are unable to fathom is the payment methods and how they work.
For any business to succeed, they have to ensure payments services are secure. A payment service provider is what your customers feed their payment details into. Naturally, they should be such that nobody can dupe them for their hard-earned money. Here we will tell you what secure payment services mean for any business.
How does a payment service provider work?
There are a few basic things we need to understand before we know how a PSP works.
- When the customer comes to a website and decides to purchase a product, the website takes him to a secure payment gateway. Here the customer types his credit card details, and the payment gateway receives a transaction request. These payment getaways get integrated with every major payment provider to ensure safe payments.
- The PSP will check the credit card information and see if you have sufficient funds to process payment. When the verification is complete, the PSP’s job is to transfer the funds from your account to that of the business’s account.
- When the PSP gets the confirmation that the transaction is done, it sends a message to both the customer and the merchant. In case the funds are short, then the PSP will send a transaction that fails to notice to both the customer and business.
Why should a business use a payment service provider?
There are many reasons why a business should opt for using a PSP to handle their payments.
The flexibility to make payments easily really affects the rate of conversion. People are assured that their payments will be made no matter what. Businesses also add various payment processing methods to make this process easy for their customers
A PSP offers them the privilege of accepting all types of credit cards, PIN-based debit cards, and EMV chips. Customers can use any of them to get their transactions accomplished.
Supposing you are in a restaurant and are just about to leave. You would want them to have a restaurant epos that processes the payment quickly so you can leave immediately. The same thing applies to online sales as well.
Many of the PSP even allow the merchants the option of next-day financing so that they can get their payments in the account the next day itself.
Integrated payment systems are more secure than other non-integrated systems. Apart from that, the integrated systems are pretty cost-effective too.
The transaction goes straight to the payment terminal. It is not added manually; hence chances of any error are minimal. These POS integration systems update the invoice as soon as the payment is made. So any inaccuracy in accounting is reduced.
Lower operational costs
When starting a new business, you have to contain every cost. The integrated PSP’s ensure that the payments from multiple workstations move to one payment getaway. For example, in a salon, numerous transactions are completed and pushed to one getaway.
This reduces the cost of purchasing various payment terminals.
Security methods that PSP’s use
Naturally, the PSPs have to use some security methods to keep their money safe. Let us have a look at them.
One of the biggest problems that a PSP solves is providing PCI DSS compliance to the merchant. In 2006 the Payment Card Industry Security Standards Committee was established. It aimed to keep in check fraud payments when doing online transactions.
This committee defines the standard rules that any company should follow if they are taking card details for online payments.
They have divided this PCI compliance into four levels based on the number of transactions a merchant makes and the nature of his business. It starts at level 1 for merchants processing more than 6 million transactions to level 4 for merchants that process less than 2 lakh transactions.
Regardless of the level at which the merchant is, PCI compliance takes care that they protect the customer data. Non-adherence to the same leads to penalties like fines and not providing a credit card as the payment method in the future.
Transaction data encryption
Data encryption can protect the data that is passed during any financial transaction. This is required even later when the payment provider stores this information. Client-side encryption is necessary to get security and bring a reduction in the scope of PCI compliance. PSPs can then encrypt all the data and ensure that all the standards are adhered to.
Address verification system
Most of the PSPs also provide an address verification facility. This means they can verify if the cardholder has given accurate information about his residence address. They also check if the address provided matches the address that is present in the file.
If this information is inaccurate, this could imply that the person is committing fraud. That is why the extra layer of protection is necessary. A cybercriminal who has the credit card details wrongfully will not know the exact address of the owner.
A secure payment service ensures that your business moves securely. No customer is ready to trust a merchant who does not have a reliable payment system in place.
The above information should help you understand the criticality of maintaining a proper payment service in place. There are numerous providers, but only a few of them are considered trustworthy. Do your bit of research before you choose anyone for your business.
Read their online reviews and see the general opinion of people. Go to their social media pages and check if there is any negative verdict against them. If you read any information that goes against them, you must steer clear. Since your business involves other people’s money, you have to be doubly sure who to choose.