Who knew it would be so complicated to accept payments from customers? Every small business owner. That’s who. To sit down and compare credit card processing vendors and rifle through complicated fees is enough to give anyone a headache. And when you have limited time and resources as it is, this challenge could really set your business back.
When it comes time to choose a merchant service provider, you’ll likely be met with frustration. That’s because no two vendors offer the same pricing structure. Some may charge you for setup and customer service fees, while others will waive those for higher processing rates. You have to understand what structure fits your business the best.
Do your homework.
When researching potential vendors, it pays to do your homework ahead of time. Is that vendor really looking out for your best interests? You won’t know unless you ask some prodding questions, like:
- What are your monthly fees?
- What are your cancellation fees?
- Do you charge for setup?
- What does your customer service look like?
- What type of equipment is needed?
- Do you integrate with my current POS system?
These are just a few examples of some considerations you should be investigating when searching for a merchant service provider.
Tips to follow when choosing a merchant account.
While every vendor is different, there are some general considerations that apply. These are some of our most important tips for you to remember when you choose a new vendor.
- Know your terminology. Understand the difference between various types of processing rates.
- Lower rates doesn’t always mean you’re getting the best deal. You could be sacrificing quality elsewhere, like in service and support.
- Understand all fine print details and make sure you clearly understand the length and termination conditions of the contract before you sign.
- Choose a vendor who emphasizes security.
- Choose a vendor who is enthusiastic about growing your business.
Compare credit card processing vendors on costs
It’s not all about the costs that your credit card processing vendor charges. All of these things should be taken into consideration to make an informed decision about which vendor is right for your business. But, for small businesses who have an eagle eye on the bottom line, cost savings are understandably attractive.
So how can you compare credit card processing vendors based on cost? It’s difficult when they all boast different prices and savings. Here are some strategies to keep in mind:
- Your processing rate will differ from your neighbor. So even if you were referred to a great vendor, you might not get the same deal as your friend did.
- Most costs will be tied to transaction processing fees. These fees depend on a few things: personal and business risk, percentage of the transactions that are card not present, and average volume and dollar amount per sale.
- Even if a vendor promises you a great rate, it might turn out to cost more based on the types of cards you accept. Some credit cards traditionally cost more to process than others. So do your homework on each credit card brand you accept.
It’s hard for anyone to claim to offer the lowest rate, that they will save you the most money, or that they won’t raise your fees overtime. Unexpected shifts in the market can account for changes that maybe even your vendor wasn’t prepared for. The best advice that can be given is to do your homework. You are your own best advocate. If you don’t fully understand the rates, fees, and costs associated with processing credit cards, get some clarification. Reach out to colleagues, social networks, community groups, etc. You don’t have to settle for what seems like the easy choice.
Grow your business with a partner who cares. Learn some of the major trends affecting small business in 2016, and how we want to help you achieve them. Download the infographic below.