Five Often Overlooked Details when Choosing a Merchant Services Provider

When you’re ready to accept credit card payments at your store, you need a merchant services provider to put all the pieces together for you. Not only do you need the equipment, but you need a processor to handle transferring the information back and forth between the credit card issuer, the card network, and your bank.

Choosing a merchant services provider is a big decision and one that requires a lot of consideration. Many merchants overlook the most important details when choosing their providers, leaving them with less profits or a less than desirable company processing their payments.

Check out the top five details you must not overlook when shopping for a merchant services provider.

Missing the Hidden Fees

Don’t take any pricing at face value. Many processors quote attractive pricing to get your attention, but once you sign up and use the service, you pay many more fees than you expected.

Ask for complete transparency when you sign up for a credit card processor. Not only do they charge the processing fee, whether interchange plus, tiered, or flat-rate pricing, but there are often other fees they don’t disclose.

Start by reviewing their pricing page on their website. Look for fees, such as:

  • Cancellation fees
  • PCI compliance
  • Minimum balance requirement fees
  • Equipment fees

Ask processors if they listed all fees, or if there are other ongoing and one-time fees you should expect.

Another ‘sneaky’ way to watch out for hidden fees is with qualified rates. Many processors charge one low rate for qualified rates, but not many cards qualify for this rate. You don’t know the rates until you receive your statements, after you’ve already processed the transactions and paid the fees. The low qualified rates are often reserved for a select few cards.

No PCI Compliance

As a merchant, PCI compliance is required, but not all processors offer it. If they do, they may charge extra. While many merchants include it as a part of their services, many leave it up to the merchants themselves.

Fraud is a big problem with credit cards and bearing the burden yourself is a major responsibility that could lead to legal issues if you aren’t careful. You’re much better off having the credit card processing company handle the PCI compliance for you for a few reasons:

  • Credit card processors understand all aspects of PCI compliance and can handle it easily
  • PCI compliances is very time consuming and complicated
  • PCI compliance is costly, so finding a processor that includes it in their services is crucial

Statements That Aren’t Transparent

Credit card processing is complicated on its own, but your statements shouldn’t be complicated too. You should be able to read your statements and know exactly what you’re being charged and why. You should see a simple breakdown of fees and be able to tell what each charge pertains to.

What should you avoid with statements? Ask providers about the following:

  • Do they lump all fees together? If so, you can’t tell why you’re paying certain fees or be able to budget at all. You should have a simple breakdown of all fees so you can see where you may need to make changes or where you can save money.
  • Do they show you examples of their statements before you sign up? Don’t be afraid to ask for examples. See if you understand the statements and if you don’t, see how the provider answers your questions. If you still walk away not knowing what the statements mean, look elsewhere.
  • Do they raise rates? If so, do they provide warning or do they just do it and hope you don’t find it in the statements? If the statements offer lumped fees, it’s very possible you wouldn’t know that your rates increased.

Poor Customer Service

Ask specifically about a company’s customer service. What do they offer? Is it dedicated support or are you put in a queue with others? Without dedicated support you may find yourself frustrated, on hold, and even telling the same story repeatedly to multiple agents.

Look for companies that offer dedicated support. This means you have one or a specific team assigned to your account. With everyone on the same page, you can get faster answers to your questions and concerns. Your own customer service levels depend on the service you get from the credit card processing company. If you have a question, need equipment support, or are worried about fraud, you need answers right away to keep providing good customer service while protecting yourself.

Taking a Long-Term Contract

Most credit card processing companies today work on a month-to-month contract. This means you can cancel your account at any time. While the hope is that you’d stay with the same provider for many years, that’s not always the case. You want a contract that you can cancel at any time without paying excessive fees to do so.

If you’re stuck in a contract, you’ll pay penalties for canceling should you decide it’s not a good fit for you. This reduces your profits and makes it difficult to change processors if they processor you chose isn’t working for your business.

Before you choose a credit card processing company, do your homework. You may even want to get quotes from at least three companies to compare your options. Each company has different pricing structures, includes different services in their fees, and even offers different services. Know what you need, including the equipment and decide if you’re comfortable with a contract or if you’d prefer a month-to-month service.

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