Deciding between standard payment processors like Stripe, PayPal and Square, or opting for a custom payment processing solution, can be challenging. Such a decision directly impacts your operational efficiency, customer satisfaction, and, ultimately, your bottom line, so it’s worth doing your research on what will work for your business.
In this guide, we'll explore the key differences between standard and custom payment processors, highlighting the pros and cons of each to help you make an informed decision that best supports your business's growth and unique needs.
Payment processing facilitates the transfer of funds from a customer's account to a merchant's account following a sale.
This process involves several key players, including merchant accounts, payment processors, and payment gateways, each playing a pivotal role in ensuring transactions are completed securely and efficiently. We’ve broken down what it all means in our knowledge base.
Standard or “off-the-shelf” payment processors are your services such as Stripe, Paypal and Square.
They’re essentially just that, an off-the-shelf product with no or minimal customization. They usually involve a subscription cost for the software + pay-per-transaction pricing model. They cater to a wide range of industries with a one-size-fits-all approach, providing services for straightforward transaction needs.
Off-the-shelf payment processors offer a broad range of features designed to meet the general needs of most businesses. However, they often lack the flexibility to tailor their services to fit specific business models or unique operational requirements. This limitation can be particularly challenging for businesses that:
While off-the-shelf payment processors are capable of handling transactions for businesses of various sizes, rapid growth or unexpectedly high transaction volumes can pose problems. Especially if your transactions start to exceed $100 000/month. Such issues may manifest as account freezes and holds, we go into more detail about this here.
Off-the-shelf solutions have transaction limits or scale pricing in a way that becomes cost-prohibitive for growing businesses, forcing them to seek alternative solutions during critical growth phases. So for a growing business, in the long run standard payment processors actually end up being much less cost-effective than a custom solution.
Customer support is a critical component of any service, especially when dealing with financial transactions. However, off-the-shelf payment processors often provide a pretty impersonal service and difficult to access technical support. Support is usually provided through call centers or chatbots, where assistance is always generic and non-specific to what you actually need help with.
This all makes standard payment processors a pretty good option for many start-ups and smaller retail businesses due to their low initial cost and ease of integration. They allow you to begin accepting payments quickly, which is crucial in the early stages of business development. They also make sense for freelancers and consultants who may just need the occasional one-off payment from clients.
However, for growing businesses or industries that have more complex needs, such as in Ecommerce, Timeshare, Travel, Software, Hospitality or Healthcare, the limitations of standard payment processors will quickly become apparent and hinder your business.
Custom payment processors are developed to meet the exact needs of a business, providing bespoke solutions that integrate seamlessly with your operations. They are designed with your unique challenges in mind, offering flexibility, scalability, and dedicated support.
The ability to design and implement different payment methods offers an opportunity to enhance your customer's experience and build a stronger relationship with your customer or client base. This is one of JJS Global’s strengths in the industry. Whether it’s accommodating unique customer behaviors, complying with industry-specific regulations, or integrating with niche marketplaces, we ensure that every aspect of the payment process aligns with your business model. Custom solutions by providers such as JJS Global can offer you flexible payment options such as
Engineered to handle growth, supporting increased transaction volumes and international expansion without hiccups. As your company grows, custom payment processors adapt to support not just an increase in transaction volumes but also expansions into new markets or currencies. This adaptability ensures that your payment processing capabilities scale seamlessly alongside your business, without the need for constant adjustments or platform switches.
Access to dedicated teams offering expert advice and assistance tailored to your business. Often the customer support for custom payment processors is a lot better than standard payment processors. You should get access to real life people offering technical support when you need it. JJS Global likes to take it even further offering personalized support from experts who really know your business and industry. We like to work in a partnership with you, providing not just technical assistance but strategic advice to optimize your payment processing.
One of the most significant advantages of custom payment processors is their ability to integrate deeply with your existing systems. From CRM and ERP solutions to custom-built e-commerce platforms and inventory management systems, these integrations ensure smooth, automated workflows across all facets of your business. This cohesion between payment processing and operational infrastructure not only enhances efficiency but also provides a more comprehensive data view, enabling better decision-making and customer insights.
Custom solutions may potentially require a greater upfront development cost compared to plug-and-play options. The costs associated with custom development, integration, and ongoing support can be significantly higher than those for off-the-shelf options. However, this investment is often justified by the long-term benefits and value of having a system that precisely meets your needs and supports your growth.
Tailoring a solution to fit your business perfectly takes time, potentially delaying launch or integration. However getting it right to begin with could potentially save a great deal of time later on.
While off-the-shelf options can offer a quick start with less upfront investment, custom solutions provide the scalability, flexibility, and support necessary for businesses looking to thrive in an ever-evolving marketplace.
This list is by no means exhaustive! But just to give you an idea, these types of businesses can gain a competitive edge with a system customized to their needs and the experience of their customers.
E-commerce and Retail: Especially for businesses with a global customer base, dealing with multiple currencies, international tax laws, and varied payment methods.
Subscription Services: Requires sophisticated recurring billing systems, customer management, and churn reduction strategies.
B2B Services: Complex invoicing, payment terms, and integration with enterprise resource planning (ERP) systems are essential.
Healthcare: Needs to handle sensitive patient data securely while complying with regulations like HIPAA.
Travel and Hospitality: Faces high chargeback rates and fraud risk, along with the need to process payments in multiple currencies.
Software as a Service (SaaS): Benefits from custom integrations for subscription management, usage-based billing, and scalability.
Timeshare Industry: Unique in its need for handling high-value transactions and managing intricate payment schedules that often require personalized customer interactions.
Call Centers: Custom solutions can integrate directly into their CRM systems, enabling agents to process payments securely and efficiently while on the call, reducing errors and enhancing the customer experience.
JJS Global prioritizes tailored solutions over one-size-fits-all in payment processing. Our partnership-driven strategy focuses on crafting payment solutions that serve as a strategic advantage, aligning closely with your specific business needs and industry challenges.
We offer:
