Criteria for Choosing a PSP
Learn which aspects you must pay attention to when you search for a suitable payment provider. Here you’ll find the most important criteria.
Online stores offer goods and services over the Internet. The entire ordering and selling process is done via the web. Electronic commerce, when compared to traditional distribution channels, benefits from a high flexibility and low cost of transactions.
Merchants aiming at making their online shop competitive factors should carefully choose their shop system and payment provider.
Shop systems - the basis of a successful online shop
What is a shop system?
A shop system is the software basis of online shops. In other words, this is what allows for purchases to be made on the website. The shop software usually has a shopping cart functionality.
What should the dealer consider when choosing the shop system?
The market for shop systems is huge, and the choice of systems is correspondingly large. In order to reduce the selection considerably, there are a number of factors that the retailer should consider in the evaluation.
Product type: In which industry branch does the dealer operate? Can orders be considered high-risk?
Budget: How much money is available to the company?
Required shop system functions: Which functions should the online shop possess, in the short and long term?
Internal programming skills: Can the company make its own programming?
Period: How much time is left for integration?
Interfaces: For long-term cooperation, interfaces should be considered. Are interfaces to external systems available or possibly available via add-ons or plug-ins?
Based on these criteria, the shop system can be selected.
It can mainly be distinguished between two types of shop systems, licensed and hosted shops or open-source shops.
Licensed and hosted software
If the dealer needs an immediate solution and does not want to be intensively involved with programming, licensed and hosted shop systems are very suitable. Most hosted shops are already preinstalled on the web servers. The dealer must only select the right shop model based on the number of items and the desired features. After entering the business and contact details, the online shop, including the new shop software, can go live immediately. In comparison, licensed software will be downloaded and installed on a Webserver. Licensed and hosted solutions must be paid for, either through a one-time or monthly fee.
Open source online stores: Magento, Oxid eShop, Shopware and the like
Open source online stores are better known and usually more popular. For merchant who are not pressed by time, open source solutions convince through flexibility and extensibility. The source code is open, so changes can be made to the online shop at any time. The range of open-shop software is huge, since basically every user or programmer can program their own shop software and offer it on the market. Magento, Oxid eShop and Shopware are among the most well-known open source online shops.
Find the right payments for the online store
Once a shop system has been chosen, it is important to connect the right payment options. This usually happens via a Payment Service Provider (PSP). If the payment provider has an interface to the shop system, the integration can usually be implemented quickly and easily.
Online shops multiply their payment offer
Traders are increasingly seeing an opportunity to increase their conversion rate by offering more payment methods. Invoice payment as well as direct debits, both very safe payment methods benefiting from a good popularity among customers, are increasingly integrated by online shops. Service providers in this area usually provide merchants with a payment guarantee and take over the processing (for example credit check, reminder, collection procedure).
What should be considered when choosing the payment provider?
To make the payment process efficient and to achieve optimized conversion rates, finding the right payment provider is essential. In addition to the shop system compatibility, the following criteria should be considered when choosing a PSP:
Payment options: Which payment methods does the PSP offer? Does the PSP offer a wide selection, so that in the long term, if necessary, other payment methods can be connected?
Country coverage: Which countries can be covered by the PSP? Ideally, the payment provider should be specialized in the dealer's focus countries.
Industry: Is the PSP knowledgeable of the merchant’s industry? In "high risk" sectors, a suitable fraud management should be included.
