Fees, risk management among deciding factors when choosing merchant service provider

E-commerce business owners must decide which PSP is most compatible with their business.

p>Owners of international, high risk or emerging businesses that require merchant accounts to accept credit cards online have many factors to consider when choosing a reliable merchant service provider.

At minimum, this payment gateway must provide optimal customer service. This includes rapid processing of financial information for every transaction, real-time reporting (i.e. whether a customer's credit card is accepted) and around-the-clock service. Shoppers will not become buyers if they are confronted with frustrating roadblocks during a given transaction.

Customers will also opt out of an online purchase if they feel their financial information is not secure. Many American consumers are still not entirely trusting of e-commerce, so merchant service providers must try to match the high level of security provided by banks and leading third party providers.

Unlike some of these providers, many payment gateways offer significant website flexibility to businesses. Emerging businesses, especially, require dynamic platforms to succeed, not rigid, one-size-fits all models.

A payment gateway should also offer verification services to help deter fraud and strategies to limit chargebacks. Chargebacks allow customers to receive a refund on purchases they weren't satisfied with or that they did not make, but they come at a considerable cost to merchants. Verification services, such as requiring an electronic signature or billing address, provide an additional level of protection to businesses and even consumers. Payment risk management and fraud prevention initiatives will become more critical during the next decade, as e-commerce embraces mobile payments and more people complete transactions on the internet.

But perhaps nothing is more detrimental to an e-commerce venture than crippling fees. Merchant account providers generally charge a fairly standard rate of about 20 cents per transaction, but other fees, such as those that accompany customer refunds, account activation and address verification, vary with different companies and can accumulate quickly.

Business owners have many payment service provider options to consider, but if they have a vision of what they want out of a payment gateway, the best solution should become readily apparent.