From payroll, benefits, and taxes, to bill pay— there's no end to the functions of your business that rely on reliable payment processing.

Finding the right payment processing solution can be challenging. There’s an abundance of payment providers to choose from, and it's difficult to know which one will offer the best service for your company as payment preferences differ across businesses and business types.

With an ever-changing payment landscape and teams being increasingly exposed to faster and more efficient payment methods, businesses need to keep pace with the latest payment solutions, and this often means partnering with a reputable payment provider that best aligns with your current and future business models.

In this article, you will discover some key elements to consider when choosing a payment processing partner that best fits your business needs.

Payment Method Options

In an era in which instant gratification is the name of the game, consumers want their goods now, and this means offering payment methods that match that mood.

Today’s business leaders also want more options for payment methods than ever— whether in corporate receipt or execution. An important first step when choosing your business’s payment processor is determining what types of payment your business wants to use for executing payments to vendors, employees, contractors, and more. Offering modern, efficient payment systems and methods streamlines your internal operations.

No matter which payment types you offer, there will be advantages and disadvantages to each. Let’s unpack these.

Cash

One of the most common and easiest forms of payment is cash. It’s universally accepted, it’s fast and convenient, and doesn’t require additional fees. Vendors, however, may not want to use cash for large purchases, and carrying large amounts of cash is risky. It can also be time-consuming when you have to count and balance up each day.

Checks

Check payment is as reliable as the gold standard, and for good reason; as one can make more frequent or larger purchases safely and you need not keep unwieldy and risky cash on hand. Additionally, you won’t have to pay fees to execute checks.

The downsides, however, are myriad—check payments come with fraud risks, expensive audit components, and additional manual (and paper) processes added to your business. All of this can easily turn a ‘no-fee’ method of payment execution into an expensive component of your accounts payable and HR operations.

Debit Card & Credit Cards

Credit card and debit payments can be quicker and more convenient for your business than cash or checks. Debit and credit cards also facilitate frequent or larger purchases, and you won’t have to keep as much cash on site. Card payments also eliminate concerns about bad checks or fake cash, and international purchases—say, for a revolutionary software product from a team in the EU, or your widget vendor in Canada—can be executed cleanly and instantaneously. All of this is to say nothing of the clear wins in ensuring your team and department heads have spending authorization at their fingertips without executing manual check runs for essential business purchases.

On the flip side, card payments come with their own fraud concerns, they can’t be used for your bi-monthly payroll run, and some vendors and merchants are still slow on the uptake: you’ll likely find contractors that prefer slower but less expensive check acceptance over faster, interchange-laden credit card payment receipt. In an ideal world, your business would earn points and cashback with every vendor payment— in reality, you’ve got a special-use-case convenience option that doesn’t translate across your vendor portfolio.

Electronic Bank Transfers

Electronic bank payment methods go by several common and not-so-common names: online payment, EFT, Automated Clearing House (ACH), direct transfer, account-to-account transfer, and more.

It’s quick, easy, convenient, and allows you to execute large payments with minimal processing fees—a good option if you’re in the B2B space. It’s also more convenient than accepting cash or checks and eliminates the attendant risks that come with these traditional types of payments. Working with a strong payment processing partner further adds a layer of security; audits and payment security are their business, after all.

However, some vendors may be hesitant to provide bank account and routing numbers and anxious about transferring money directly you are their bank accounts to their business accounts. Even if their concerns are calmed, EFT processing always takes time. 2-3 business days is standard for ACH transfers—while faster than your AP team constantly answering calls with the check’s in the mail! These concerns are rarely subdued on the part of some vendors who might prefer more archaic methods of payment due to their so-called reliability.

Payment Security Features

There's a lot going on during the payment process. Apart from you and your vendor, there are card companies, acquirers, and issuing banks along the payment chain. It's thus crucial to have a firm handle on the whole process and reduce the risk at every possible point.

A 2021 survey found that 74% of businesses have fallen victim to payment fraud. This reinforces the importance of being proactive about cybersecurity rather than waiting for a crisis to happen and then reacting.

Here are some critical elements to focus on to ensure that your payment processing platform is secure, or, what to consider when choosing a payment partner for your business.

• Encrypted Data: Transactions should be secured using Secure Socket Layer (SSL) or Transport Layer Security (TLS) protocols.
• Tokenization: The best payment processing solutions will also employ tokenization. This substitutes sensitive data with random characters so that even if security is breached, the data is unusable.
• ACH Payment Security: Every transaction should be monitored using advanced fraud protection tools to enhance ACH payment security and stamp out payment fraud.
• N-Tier Technology: This adds an additional security layer by using three sets of servers and storage for processing and handling ACH payment requests. Each layer acts independently and reduces potential threat vectors.
• 3-D Secure: Provides a similar security approach for credit and debit card transactions. Also known as payer authentication, 3-D security requires customers to complete an additional step with the card issuer to verify their accounts, such as punching in a password or security code sent to their phone or email.

Ensure PCI Compliance

Any business that accepts or remits credit card payments must adhere to Payment Card Industry Data Security Standards (PCI-DSS) guidelines that ensure customer data is protected. PCI-DSS covers everything from how data is collected, stored, processed, or transmitted and the security protocols that must be in place to protect customers’ data. A payment processing partner should ensure compliance with the required security protocols.

Integration with Technology

Some vendors like receiving cash. Others can't live without their credit card. When it comes to payment, vendors have their preferences.

Smart businesses are seeing this as an opportunity, rather than a drag, and are optimizing their accounting operations to provide access to real-time data that can help them run operations more efficiently and manage cash flow more effectively through payment integration—a critical piece of the payment processing puzzle.

The major benefits of payment processing integration include the following:

• Saves time
• Reduces human error
• Increases cash flow
• Drives down labor costs

As vendor payment preferences pivot from cash and check to electronic payments, it just makes sense to have the data from these new payment options seamlessly flow into your business accounting system without the need for manual entry. Accordingly, discussing the specific integrations you need before choosing a payment processing provider is crucial.

NatPay Is Your Secure Payment Processing Partner

Choosing a payment processing partner can be complicated.

There are several factors to consider in determining which best aligns with your current needs as well as future growth plans. From security and compliance to volume and integration, you need a solution that handles transactions securely and seamlessly and mitigates payment fraud.

Businesses also need to keep pace with the latest in payments technology and source a partner that can work with you to create a payment system that will support your business strategy by offering customized and secure SaaS solutions.

With NatPay—the market leader in third-party enterprise payment processing solutions—choosing a payment processing partner does not have to be complicated. From direct deposit of salaries and wages, tax payments, and reimbursements to B2B payments, vendor payments, and benefit payments, NatPay can help you manage it all through rigorous and robust online systems.

Contact NatPay today for a free customized demo and if you like what you see, our team will prepare a free pricing proposal tailored to your specific needs.