Many small and medium enterprises have a bit of a love-hate relationship with payments. Obviously, they love getting paid and having cash coming into the business. Yet for many, the amount of work that setting up different payment processes requires can feel like just another cost of doing business – a box to be ticked as they set themselves up online.

But sticking with that view means missing out on significant potential value. Not only can the front-end payment process have a major impact on the overall customer experience of your business, but savvy SMEs can use their payment service provider (PSP) to both reduce costs and grow revenue.

That said, with the number of PSPs on the market SMEs need to be clear on what they are looking for in order to select the right one for their business. While every company is different, there are five broad areas to consider when making that choice:

Using payments to manage costs

When it comes to managing costs, fraud protection, chargeback management, tax remittance, and comprehensive reporting are just some of the benefits SMBs can access from the right PSP. However, ultimately the focus when looking to reduce costs should be on how the PSP reduces friction in the checkout process, by streamlining many of the manual back-office processes involved in reconciling payment data.

Facilitating international expansion

For businesses striving to be international, being able to expand into new markets with ease is going to be a priority. The potential for SMEs to operate across borders and in new markets is a good example of where PSPs can really help to maximize profit from a new revenue stream. Trading internationally can be an overwhelming prospect if you are new to eCommerce but picking the right payment provider can dramatically help to streamline that process, as their tools are built to maximize your margins in these areas.

Aligning your business model with your PSP

Having your business model in front of mind when looking at potential providers will help you to determine which value proposition fits best with your requirements. This means careful consideration of the various sectors or geographies they cater to and the different payment channels they support.

For instance, SMEs that operate within the retail industry will need to ensure that their PSP has an integration with the eCommerce platform that they use. Alternatively, businesses that operate a subscription model must select a provider that can process recurring payments.

It’s also important to look for a PSP that has existing integrations with the third-party providers that you are already using, such as shopping carts or accounting systems. This way you can get up and running as smoothly as possible, and means that you will reduce manual intervention when reconciling payment and customer data in your back-office systems.

Keeping customer-centric

It’s also important to consider the needs of your customers when selecting a PSP. When moving online, your business potential expands tremendously as you are able to reach new segments of a domestic market, or new markets altogether, and your provider’s offering should reflect the requirements of customers in those markets.

Not only do PSPs and their propositions vary in different markets, but so do your customer’s requirements. If you are a UK business operating in greater Europe, or America, customers will likely want to pay in their local currency, or with their preferred payment options. You need your PSP to help identify these needs and cater to them.

Test, test, and test again

In addition, you should always be continually testing your payment processes. Many SMEs think that once they hand over their payment processes to a provider, they can forget about them. But with customer requirements constantly changing, you need to make sure that you match that evolution. That means continual testing of your own checkout process is critical, whether you are seeking increased sales or improved customer retention.

A simple way to do this is to use the sandbox – or test – accounts that all PSPs provide. This allows you to experience the checkout process as your customers do, identifying where cumbersome and complex checkout procedures could lead to checkout abandonment, and making changes accordingly

If your PSP is ‘developer-friendly’ it will be easier for you to test your payment flows. They will have very straightforward documentation and self-explanatory sandbox accounts so that as a merchant you can actually do this testing for yourself. The issue with using a more traditional provider is that they don’t have the self-service facilities for you to use, so you run the risk of going live online with limited knowledge of what your checkout flow looks like, or how successful it is.

Delivering a seamless flow for an enhanced customer experience

In summary, SMEs need their payment providers to support their business objectives and not provide more obstacles to reaching those goals. That’s why the right partner, who is aligned with your business model, will help to create an intuitive, seamless and efficient checkout flow to minimize the risk of checkout abandonment and enhance the customer experience.