How to Select a Payment Processor

If you’re shopping for a direct commerce payment processor, you’ll have a bit of homework to do. Following are some tools that can help get the job done quickly and efficiently.

What to Look for

When selecting a payment-processing partner, determine the data-transmission protocols and transmission gateways it accepts and with which it works. For high-volume batch transmissions, bisynchronous communications are preferable to asynchronous; that is, you can transmit your authorization requests and deposit data, then get approvals and deposit confirmations back from the processor—all in a single phone call.

Asynchronous batch transmissions work like a CB or walkie-talkie: One party transmits, then stops to wait while receiving a transmission back from the other party. Meanwhile, bisynchronous communications are like phone calls: Both parties can transmit at the same time.

A top-notch payment processor won’t impose a transmission window (a scheduled time) on your transmissions, and also will have methods in place to look for transmissions of duplicate batches or transmissions of duplicate data (order numbers with the same amounts) within a batch. A top-notch processor also will have options for fraud-detection modules that can supplement procedures you already have in place. (For more information on this issue and the topic of credit-card chargebacks, see Catalog Success, November 2001, www.catalogsuccess.com).

If you accept payments in foreign currency, obviously your payment processor must be able to handle those currencies. If your processor is the acquirer (the bank or the bank’s designated agency) with which the merchant establishes an account, you also may have to set up more merchant accounts with the processor’s partner banks in the countries whose currencies you accept.

Though generally the case, this is far from automatic: Be prepared to jump the same hurdles, complete similar paperwork and post the same bonds that you did when setting up your U.S. dollar merchant account.