Software Development
Choosing a Payment Provider: The Questions Nobody Asks
Updated June 15, 2021By the CalliArc team
Key takeaway
The headline percentage is rarely the biggest cost. Authorisation rates, settlement timing, chargeback handling, and support for the payment methods your customers actually use move the economics far more — and a provider you can't migrate away from has priced you without telling you.
Payment provider selection usually turns into a comparison of transaction percentages, which is the easiest number to compare and one of the least consequential.
Costs that aren't on the pricing page
- Authorisation rate — the share of legitimate payments actually approved. A one-point difference here typically outweighs a meaningful difference in fees.
- Cross-border and currency conversion charges, which apply more often than expected.
- Chargeback fees, and whether you're charged even when you win the dispute.
- Settlement timing — money arriving in two days versus seven is a working capital difference, not a rounding error.
- Reserves and rolling holds, which some providers impose on newer or higher-risk merchants.
- Minimums, monthly fees, and the cost of features like recurring billing or invoicing.
Questions to ask before committing
- Which payment methods do my customers in each market expect, and does this provider support them natively?
- What is the dispute process, and how much of the evidence submission is automated?
- What happens to stored card details if I leave — can they be migrated to another provider?
- Is there a sandbox that genuinely reproduces production behaviour, including failures?
- What's the support path when payments are failing in production at 9pm on a Friday?
- How are refunds, partial refunds, and disputes exposed in the API and in reporting?
The engineering considerations
- Use the provider's hosted fields or elements to keep card data off your servers and your PCI scope small.
- Rely on webhooks as the source of truth for payment state, and verify their signatures. The browser redirect is a user experience, not a confirmation.
- Make payment handling idempotent end to end, so a retry cannot charge twice.
- Reconcile daily against the provider's settlement report; discrepancies surface quickly and quietly.
- Abstract the provider behind your own payments interface — not to be provider-agnostic on day one, but so that changing later is a contained project.
On switching providers
Card-on-file migration is possible between major providers through a compliant transfer process, but it requires planning and cooperation. Ask about it before you sign, not when you want to leave — the answer tells you how much leverage you're giving away.