Although credit cards have been around for nearly a century, their use has only become commonplace throughout the past few decades. Previously, people made almost all purchases with a personal check or cash. Today, most consumers have access to various debit and credit cards. Furthermore, many prefer them over cash.
As a business proprietor, it’s more significant than ever to accommodate credit cards in your business whether you run a brick-and-mortar or online store. This way, you’ll enjoy more sales and profits. Nonetheless, credit card acceptance comes at a cost. After all, issuing banks, credit card associations, and transaction processors must get a share of every accepted credit card transaction.
While it’s understandable to seek ways of decreasing transaction costs, other costs are equally significant. Remember, the processor with the least processing rates might not necessarily offer the best service overall.
If you’re choosing a merchant account provider, you’ll want to consider these important elements:
Hardware that meets your business’ unique needs
Regardless of the business you operate, you’ll require equipment for processing sales. In the case of receiving debit and credit payments, you’ll require technology that can read your client’s credit card information before sending it for approval to the processor.
Options for credit card reading are more robust these days than they were a couple of years back. Along with the conventional wired terminals commonly seen in retail locations, several mobile processing and wireless terminals exist that merge a smartphone with a simple card reader to provide similar capacities as a dedicated terminal.
Most of them permit EMV chip reading. Wired terminals are the most commonly used card readers and provide various distinct benefits. Perhaps their most important benefit is their reliability. You don’t need to worry about sudden disconnections with your wireless internet connection, leaving you stranded in the middle of processing a sale. Furthermore, they’re generally better at supporting newer elements, for instance, contactless payments.
Business Needs
Choosing a merchant account is dependent on your business needs. This means that your kind of company and goals are worth considering. While some businesses handle hundreds of transactions per week, some providers impose transaction limits. It’s also important to note that high-risk account holders might obtain different charges.
Support
Accessing the necessary help when you require it must be a major consideration when assessing an MSP. Efficient, simple payments are among the major elements that drive customer satisfaction. Therefore, a provider with these aspects could make all the difference.
When vetting a service provider, obtain a clear understanding of who will provide support with payment-related matters. You should equally establish the availability of support and the amount it will cost.
Establish whether there’s a fee to accept support services and whether it’s a la carte, all-inclusive, or tiered for various service levels. An excellent merchant provider will provide numerous support options that are accessible 24/7 via live chat, email, and phone. It will equally offer resources like training and fact sheets that cover an array of payment subjects from software and hardware to bulk processing and funding.
The provider’s support services must be able to provide guidance concerning the equipment for payment processing. This includes offering referrals and access to processing software and hardware like standalone terminals, incorporated POS systems, virtual terminals, and card readers.
As payments undergo continuous evolution, so must businesses. To maintain a competitive edge, it’s significant to evaluate your payment equipment, processes, and make upgrades when needed. With advice and support from experienced and reputable merchant providers, you’ll feel confident investing in the payment services and products needed to grow your business.
Pricing Model
Conventionally, payment facilitators typically offer flat-rate pricing. While such plans are straightforward, they aren’t cost-efficient for high-processing businesses. Irrespective of reward levels and credit card risk, which conventionally define processing rates, you pay similar rates for all transactions with flat-rate pricing.
Although you’ll recognize the precise processing rate, you’ll incur more for medium and low-cost transactions since flat pricing comes with a high transaction rate to account for all likely reward and risk levels.
On the other hand, merchant providers usually provide interchange-plus pricing, which yields fewer charges for lower-cost transactions, leading to more cost-efficient processing. Therefore, if your business processes $10,000 or more monthly, you should collaborate with a provider that provides more affordable rate plans.
Other factors worth considering include a trial period and a money-back guarantee. You should also seek discounts that differ depending on the kinds of sales. Overall, it’s essential to perform a rate comparison for reliable account providers.
Customer Reviews
You should evaluate a provider’s reputation by watching out for complaints on the Better Business Review. Although some reviews are untrustworthy, most are beneficial and truthful. Although numerous people neglect this step, the ability to trust a provider is more significant than you believe. Be wary of untrustworthy providers who find ways of deceiving their clients and don’t offer quality service.
Red Flags to Watch for in a Merchant Service Provider
While numerous providers want to help clients, others have their selfish interests at heart.
You might want to watch out for these red flags:
Hidden Charges
If you spot unexplained charges on your statement, you’re probably incurring more charges than you should. Unfortunately, hidden processing charges are a common incidence, and spotting such discrepancies might be almost impossible unless you recognize what to look for. That’s why you must read the contract carefully to spot needless expenses before signing the agreement.
Unanswered Questions
Like many small business owners, you might be new in the industry with a lot to learn. Therefore, it’s natural to ask questions regarding the process so you can familiarize yourself with the industry while at the same time understand your service provider.
However, when you discover that your questions aren’t being answered to your expectations, it can be frustrating. The last thing you want is to be full of uncertainties and lack confidence in your provider. You want to work with a provider who’s transparent and ready to answer whatever questions you might have.
No Partnerships
MSPs with direct partnerships with key companies in the industry can deliver faster, more efficient services. Keep in mind that a provider can’t work alone to complete transactions. Rather, they collaborate with processing platforms and banks.
That implies that you can’t merely look at your provider’s credentials. You must equally examine the companies your provider is collaborating with. Remember, those organizations could mean the difference between a superior processing experience and a terrible one.
At Loyent, we go against hidden fees and contracts. To learn more about how we can serve your business, connect with one of our payment advisors. We’re always happy to answer any questions you may have.