A third party payment processor is a company that provides online payment processing services to merchants. These processors typically work with banks and other financial institutions to approve and process electronic payments from customers.
Third party payment processors act as an intermediary between the merchant and the customer's bank. They are responsible for ensuring that the customer's funds are transferred to the merchant's account, and they also provide customer support in case of any issues.
There are many different types of third party payment processors, but the most common ones include PayPal, Stripe, and 2Checkout. Each processor has its own set of features and benefits, so it's important to choose one that will work best for your business.
To help you make the best decision, we've created a detailed guide to third party payment processors. We'll cover the different types of processors, their features and benefits, and how to choose the right one for your business.
Types of Third Party Payment Processors
There are three main types of third party payment processors:
1. Payment Service Providers (PSPs)
Payment service providers are companies that provide online payment processing services to merchants. They typically work with banks and other financial institutions to approve and process electronic payments from customers.
2. Merchant Account Providers (MAPs)
Merchant account providers are companies that provide merchants with a merchant account. A merchant account is a type of bank account that allows businesses to accept credit and debit card payments.
3. Payment Gateways
Payment gateways are software that helps to process online payments. They act as an intermediary between the customer's bank and the merchant's website.
How to Choose a Third Party Payment Processor?
There are a few things you should consider when choosing a third party payment processor:
1. Fees
One of the most important things to consider is the fees charged by the processor. Some processors charge monthly fees, while others charge per-transaction fees. You'll need to decide which pricing model works best for your business.
2. Supported Payment Methods
Another thing to consider is the payment methods supported by the processor. Some processors only support credit and debit cards, while others also support e-wallets such as PayPal. You'll need to choose a processor that supports the payment methods you want to accept.
3. Security
Another important consideration is the security of the processor. Some processors are more secure than others, so you'll need to choose one that offers the level of security you're comfortable with.
4. Customer Support
Finally, you'll also want to consider the customer support offered by the processor. Some processors offer 24/7 customer support, while others only offer support during business hours. You'll need to choose a processor that offers the level of customer support you need.
Conclusion
Choosing a third party payment processor can be a daunting task, but it's important to select one that will work best for your business. Consider the fees, supported payment methods, security, and customer support offered by each processor before making your decision.
