How to Choose a Multichannel Payments Provider
Nearly nine of every 10 retailers (88 percent) ranked the need to support multichannel initiatives as important or very important in a recent Forrester survey. As large and small merchants alike adopt multichannel retail strategies that include everything from brick-and-mortar to mobile applications, e-commerce storefronts, traditional mail orders, sidewalk street sales, kiosks and more, payment processing takes center stage.
At SecureNet, we recently surveyed merchants, both large and small, to uncover how technology and new consumer behaviors were affecting their channel spread and specific payment needs. We found that for many merchants a multichannel strategy is already a reality. Sixty percent of merchants surveyed are currently accepting payments in more than one channel.
The growth in multichannel payments and sales is largely driven by advancements in technology and the demand for mobile and online payment options. In response, merchants have expanded their capabilities to incorporate payments across these platforms. Over half the merchants surveyed had a website that accepts payments, and another 22 percent identified e-commerce as an important future expansion effort. However, while 40 percent of merchants had a mobile website or application, only half of those accept mobile payments or have a mobile point-of-sale system.
What to Look for in a Payments Provider
As merchants’ channel mixes shift from a primary focus on physical stores to include more digital options such as websites and mobile apps, the payments environment can become increasingly complex. The payments processing industry has historically been fragmented, making it difficult for merchants to process payments across multiple channels simply and easily.
Here are several important criteria to consider when selecting an effective multichannel payments provider:
- Integrated Solution: The status quo is typically to use a separate payment processor for each channel. One-fourth of the retailers we surveyed currently use three or more software payments solutions. It's much easier and more effective to use a single solution that allows you to accept and manage payments across channels. Working with separate companies and stand-alone applications is cumbersome and makes it difficult to see a complete picture of your cash flow.
- Reporting Tools: Access to easy reporting should be a must-have for merchants when determining a payments solution. Cash flow, reconciliation and trend data across channels are all critical functions in a comprehensive payments solution.
- Security: Cardholder data must be protected to avoid security breaches and compromised private customer information. Look for a payment provider that's responsible for meeting Payment Card Industry (PCI) security standards and compliance requirements. An added benefit would be a processor that stores the data, taking the burden off of retailers, greatly reducing risk of fraud and theft.
- Inventory Control: As merchants grow their multichannel presences, seamless inventory control across channels becomes increasingly important. Large merchants in particular require a simple system for high-order inventory control, reconciliation and cross-channel transaction processing, which will enable them to see where their products are in real time.
- Technical Support: Comprehensive technical support and account services are also important in a payment solution. A dedicated customer service department can generally help you solve problems and identify technical glitches faster than you can on your own.
When selecting a payments provider, merchants should consider the above criteria a checklist for a comprehensive, sustainable solution to support multichannel commerce and satisfy customers. As merchants enhance their multichannel offerings, a solid payments partner will be essential for success.
Brent Warrington is CEO of SecureNet Payment Systems, a payment processor that works with retailers to provide integrated payment solutions and detailed purchasing analytics.