Using multiple payment processors vs. full payments ecosystem
Learn about the pros and cons of using more than one payment provider.
Determining what's best for your business
Whether your market is predominantly local or fully global, accepting multiple methods of payment (MOP) has simply become table stakes for successful businesses. As a result, many merchants today maintain two or more payments providers, not only to expand payment acceptance abilities but also for various other reasons, such as gateway redundancy, increased functionality, or potentially optimized payment flow.
Unfortunately, in the process, these companies often incur unnecessary costs in terms of manhours, IT development, and even transaction rates. If you are currently managing multiple processors – or considering doing so – use this list of concerns to help you evaluate whether that’s the best strategy for your business and situation.
What does it take to maintain multiple providers?
Negotiating individual contracts with each vendor, onboarding, and systems integration, then handling the ongoing demands of managing multiple contractual relationships will require building more time or employees – or both – into your business plan. While you may seek protection from redundant systems, splitting transaction volume and dealing with inconsistent reporting information may cost you even more. How do you really know your total cost of transactions? Here are some issues to consider:
- Documenting policies and procedures – Accepting multiple methods of payments utilizing multiple processors and gateways brings with it numerous operational issues. Which transaction types should be sent to which processor? How are they tracked? How should rerouting of failed transactions be handled? How will you identify the correct processing path to handle a customer refund?
- IT costs – Multiple integrations means coding for different APIs, different transaction messaging, and new rules for each vendor to address issues such as the above. Do your in-house developers have the capacity? Continuous monitoring and software updates add more manhours and, often, additional outside expertise is needed.
- Employee access and training – As employees come and go, duplicate entitlements mean twice the time to add new and delete departing users to avoid security risk. It also means added training time on the service requirements of each supplier, not only for new employees but for all applicable staff as software and hardware updates/upgrades are installed and procedures evolve.
- Monitoring and reporting – If transaction information from each processor is not uniform, you will undoubtedly incur additional costs in reconciliation, issue resolution, tax reporting and audit resolution.
- Compliance and security – Are your processors totally complaint with PCI DSS as well as the specific requirements of the payment brands regarding each of the methods of payment you accept?
- Volume pricing discounts – How will you ensure you are benefitting from all the rate and volume discounts available to you from each processor? Could you reduce transaction costs further if your sales activity wasn’t fragmented?
- Scalability – Can your preferred processor quickly scale to support any spikes in payment volume or seasonal surges?
- Reliability – Do your processors and gateways have top-notch speed and downtime track records? If not, you may not find the protection you sought in running redundant systems.
Choose wisely
There are payment processors that serve the full payments ecosystem. Chase Merchant Services is one.
Today we serve a wide range of businesses from single location merchants to the largest companies in the world operating across borders, currencies and regulations. Our ongoing investments in technology and our fortress balance sheet have supported decades of growth that have made JPMorgan Chase & Co. an industry leader in both transaction and dollar volume.
In fact, today we are the largest merchant processor in the world, with nearly 40 billion transactions annually.
A holistic approach
We offer clients a holistic approach to payments processing, customized to your business needs. Our speed-to-market FinTech approach to integration, our commitment to and leadership role in fighting fraud and the efficiencies of our scope and scale are just a few of the value-adds we deliver.
Your payments strategy plays an increasingly important role in enhancing your bottom line. Your choice of payments processors is critical to success. Be sure they can help you both support the total customer payments experience as well as future-proof your business for tomorrow’s challenges.