Why Work With A Payment Processor?

When you run a business you want to maximize your revenue. That is the goal of every business out there. This can be done numerous ways and one of those is to reduce expenses. For anyone who has worked with a payment process (and that is probably most, if not all of you reading this), you know that interchange fees can take quite a bite out of your revenue and you have probably given a thought to bringing that process in-house to save you money. Is that a good idea?

As JLE Business Consultants is a payment processor, we of course do not recommend it. You really have only two options, either partner with a processor or become your own. OK, technically you have a third option and that is to only accept cash but that doesn’t work for everyone in today’s economy. 

Infrastructure

One of the biggest reasons to partner with a payment processor is simply the amount of infrastructure that you will need to invest in to make it work. A large company can possibly get away with this but for a small business or a business just getting off of the ground this is an expense that you cannot afford. The software and hardware are expensive to purchase and you will be under increased scrutiny.

To start you will be limited to only credit cards and today’s consumers have many more payment options. Existing processors like JLE can help integrate all of those solutions from day 1 as well as other convenient features that your customers will appreciate. 

Your Liability

There is of course more that goes into payment processing than just the POS terminal and your computer systems. You will need an acquiring bank and that means that they will need to vet you to find out if you are financially stable enough. You will need approval from card networks like Visa and MasterCard so that you can accept payments from their cards. You will need to identify potential threats to your business. Lastly, you will need to maintain PCI Compliance while keeping up with ever-changing regulations in the banking and card industries. 

This is something that could potentially a team of underwriters to accomplish. Regulations are constantly changing and keeping up with them can be a job unto itself. 

Risk

If you do decide to become your own payment processor there is a good amount of risk that goes with it. The largest is that if fraud is encountered you will be responsible for covering the cost. There is a lot of fraud that exists in today’s world and it is unlikely to decrease any time soon. Dealing with fraud can potentially be a full time job. Is the savings from becoming your own processor worth the cost of the extra employees you will need to bring on to mitigate liabilities and risks? Probably not.

Payment processors assume a lot of the liabilities and the risks that come with accepting payments. That is part of the reason why the costs of partnering with one is what it is. Working with a good payment processor may seem expensive but in the end it really isn’t. With access to all of the extra features that a processor can bring to the table as well as a reduction in liabilities and risks to you, why would you not partner with a payment processor?

Running your business should be what you concentrate on. It is your livelihood and it needs your undivided attention. Working with a payment processor can make running your business easier, helping you accept more payments and hopefully bring in more revenue. You partner with plenty of others to help you do this and a payment processor should be no different. There is no reason not to!