Introduction

Third-party payment processors (sometimes referred to as payment aggregators or credit card processing companies) are entities that allow merchants to accept credit card payments, online payments, and any other cashless payment method without the need to set up their own merchant accounts.

Third-party payment processing business entities aim to make it as simple as possible for merchants to run their business, have simple payment flows, and conduct transactions. That way, you won’t have to worry about setting up or maintaining a merchant account. You can simply create an account with a third-party payment processor, and have all your transactions go through them.

How Does Third-Party Payment Processing Work?

1. Many businesses have their own merchant accounts with merchant services providers or a credit card processor. When their clients walk through the door and make a debit card purchase through a point-of-sale system, businesses with this type of account have the ability to accept payments directly through their own merchant account and be done.
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2. However, for some businesses that are just starting out, this isn’t always the most economical method of taking payments. It takes time and effort to interface with merchant account providers, and if your business is still in its early start-up stage, your time can be better spent doing other things.

3. This is where a third-party payment processor comes into play. Instead of having your own merchant account, which often comes with setup costs, you’ll instead work with a third party who has their own relationship with a merchant services provider, essentially serving as an intermediary. 

4. A well-known example of a third-party payment processing company is Transfi, which allows you to sign up and start accepting debit card payments on the very same business day. While many other third party payment processors exist, Transfi is known for making transactions easier, quicker and more reliable.

5. By utilizing a third-party payment processor, you’ll be bypassing the step of having your own merchant account at a financial institution. These companies allow customers like you to use their merchant account to process all of your debit card and credit card payments. As a result, your customers’ payment information will be reviewed by the processor, along with running through a variety of anti-fraud measures, before they allow the completion of your client’s transaction from their bank account.

6. These payment processing companies can run debit cards, conduct credit card processing, and even serve as an online payment processor solution so you can expand your business to the digital realm. It helps to work with credit card processors and those who process payments online because it can increase the pool of buyers for any type of business.

Why choose TransFi Bizpay over traditional payment providers 

Some of the requirements to consider when choosing among various third-party payment processor are:

1. Software integrations

See to it that the provider you choose works well with the software you’re already using in your business. If you have an online store, your processor should integrate with your eCommerce platform so you can easily partake in website payment processing. It also helps to use website payment processors that work with your accounting software to make payment reconciliations easier. Transfi provides easy and smooth website integrations using Bizpay which helps one to integrate the payment processor with something they’re already comfortable with. 

2. Cost

Look into the processor’s pricing model, markup, processing rates, as well as any other fees they charge. Then, run the numbers and figure out the most cost-effective option for your business. It's no wonder that Transfi tops up the cost chart as it comes without any hidden costs and very minimal setting up costs. 

3. Supported payment types

Pretty much all payment processors support credit card payments. However, alternative payment methods – such as payment links, stablecoin integrations and whatever makes the payments flexible – are gaining steam, so make sure your vendor enables you to accept these payment types. Transfi comes with 40+ payment methods and lets one transact in various currencies making it the best choice for your business.

4. Policies

Processes and policies vary from one provider to the next. Some payment service providers, for instance, may require a monthly minimum when it comes to transaction volumes, while others don’t have any limits. Certain vendors may support same-day deposits while others don’t. Research these policies and ensure they work for your business.

5. Security and Fraud Prevention Measures 

Don’t neglect security and fraud prevention. See to it that your 3rd party payment processing provider follows industry-standard security protocols, such as encryption and tokenization, to protect sensitive customer data during transactions. Transfi comes with developer first API integrations which make it all the way more secure and tight knit. Look for features like PCI DSS compliance, fraud detection tools, and chargeback management systems to minimize the risk of fraudulent activities and protect your business and customers.

6. Settlement Timeframes 

Find out how quickly you’ll receive funds from completed transactions. Some processors may offer daily, weekly, or monthly settlements, while others provide instant or next-day settlements. Consider your cash flow requirements and choose a processor that aligns with your business’s financial needs. Transfi helps settle transactions within seconds and offers payment schedules and other operational tools.

7. Customer Support

You need a payment processor that has your back and provides assistance whenever you need it. So don’t forget to ask about your vendor’s customer service offerings. Do they offer 24/7 support? What customer support channels do they use? Some providers may only offer email or live chat, while others also have their agents available over the phone. Transfi provides round the clock customer support for anything the user might drop a query for.

Benefits of third party payment providers

1. Ease of setup
   Third-party payment processors are usually easier and faster to set up compared with traditional merchant accounts. Transfi, for example, allows businesses to start accepting payments quickly, using a library of developer-friendly APIs with low-code or pre-built solutions.
   

2. Lower initial costs
   There are generally no setup fees or monthly fees for third-party payment processors, making them a more affordable option for small businesses or those with lower sales volumes. 

3. Global transactions
   They often support a wide range of currencies and payment methods, making it easier for businesses to sell to customers worldwide.

4. Simplified payment process
   They handle all aspects of the payment process, including payment security, fraud detection and compliance with payment-industry regulations.

With e-commerce booming, you can reach international customers and receive payments seamlessly. For instance, exporters using Transfi’s Bizpay can sell on global markets and receive payments in desired currency directly in their bank account. For more support on third party payment solutions, you can explore the tools and services offered by Transfi. 

Why is Transfi best for third party payment solutions across the globe?

1. Low Fees and Transparent Pricing
   Other payment methods often charge high fees for international transactions to freelancers or any other parties.Fintech platforms like Transfi, on the other hand, offer reduced fees and transparent exchange rates.

2. Real-Time Global Access
   Many fintech platforms offer robust mobile apps that let you manage your funds on the go. Whether you’re traveling or working remotely, you can check balances, transfer money, and convert currencies in seconds.

3. Integration with Payment Platforms
   Modern payment methods often integrate with popular payment systems like Transfi, PayPal, Stripe, or Apple Pay, simplifying global payments for businesses and freelancers.

When choosing the right platform for international trade and other finance operations, users should consider factors such as integration compatibility, processing fees, supported payment methods, security features, and the reliability of customer support. The best platform for you will depend on your specific requirements, such as the volume and frequency of transactions, the countries you're dealing with, and your budget. Checkout Transfi’s Bizpay for easier transactions, faster payouts and collections and simplified transfers.

Conclusion

The shipping industry is becoming competitive. Therefore, it is essential to choose the right payment method to stay ahead of the competition. The ideal payment method ensures seamless transactions and builds trust between importers and exporters. Therefore, always start by understanding the different payment methods used in international trade and how their terms can influence your business.

If you are confused and looking for a credible payment solution you can rely on, look no further than Transfi. The platform makes the payment process for global trade hassle-free, quick and reliable. 

With Transfi’s Bizpay, you can trade globally with a variety of currencies and payment methods. Moreover, this platform ensures that the payment methods you use are safe and provides favourable terms for both parties: the importer and the exporter.

Frequently asked questions (FAQs)

1. What is a third-party payment processor?

A third-party payment processor is an entity that enables merchants to accept credit card payments, online payments, and other cashless payment methods without setting up their own merchant accounts. Examples of popular third-party payment processors include Transfi, Square, PayPal, Stripe, and Stax.

2. How does third-party payment processing work?

Third-party payment processors serve as intermediaries between merchants and merchant services providers or credit card processors. Merchants create an account with the third-party processor, which processes transactions on their behalf using its merchant account.

3. What are the benefits of using a third-party payment processor?

Using a third-party payment processor can reduce setup costs and time, as businesses do not need to create and maintain their own merchant accounts. Many third-party processors offer simple and cost-effective pricing structures and do not charge excessive fees.

4. What are the risks of using a third-party payment processor?

The fees per transaction, especially in high volume sales, may be higher with third-party payment processors compared to dedicated merchant accounts. Additionally, the security and protections offered by dedicated merchant accounts may be lacking with third-party processors.

5. Why is Transfi the best third party payment processor?

• Easy scheduling and managing 
• Low fees and transparent pricing
• Realtime global access
• Integration with payment platforms
• Variety of payment methods
• Security and legal compliance