In today’s competitive market, businesses that don’t offer customers with the convenience of credit card processing risk more than just dwindling profit. In fact, given modern society’s go-go mentality, a business (small or large) simply cannot afford abdicating merchant services to its consumers.
It’s no secret that smartphone usage and online spending has exploded. Consumers are more likely to be purchasing something while walking on the street than walking through the aisles. It’s essential to keep your business up-to-date with today’s trends in order to stay afloat within an ever-evolving marketplace.
Partnering with a merchant account provider can be one of the most beneficial (and efficient) investments you decide to take. But settling on the right merchant account provider is not as simple as a “swipe of the card.” It takes proper research, thorough thinking and even trail-and-error in order to find the right provider.
Here is what every business owner should know before partnering with a credit card processing provider:
What is credit card processing?
A merchant service provider (MSP) is the intangible process that involves businesses, banks, individuals and any other third-party entity agreeing to trade goods and services via credit, debit and/or any other form of electronic payment.
Also known as a merchant account provider (MAP), merchant services work collectively between four key players:
1.) Merchant bank (financial institution that handles transactions to your bank)
2.) Processors (third-party entity a merchant bank partners with to share responsibilities)
3.) Individual (customer)
4.) Issuing bank (financial institution that lends credit to the individual.
What should you watch out for?
Involving your place of business into the credit processing ‘realm’ certainty doesn’t come without its drawbacks; and most often, the threat of ‘being taken advantage of’ has become the priority for most businesses to watch out for.
Merchant services have been infamously linked with the notorious title of “the used car salesmen of financial services.” Being as though merchant card processing is a complex and auxiliary industry, providers are easily able to manipulate their tactics and maneuver their words in just the right way, leading you right into their trap.
Find a service with a solid reputation; a reputable service provider with a proven track record and history of client satisfaction is imperative when searching for the right account candidate.
What should you ask?
Depending on your agreement, there can be numerous hidden fees associated with aligning your company with a merchant account provider. Asking questions is a key component in making sure you have the right contract associated with the services you not only need, but also want:
- Are you being charged on a yearly basis?
- When deciding to forgo an agreement, what is the cancellation fee?
- How much are paying on a monthly basis?
- Are you paying a batch fee?
- How will your fees be debited? Monthly or daily? (It should be up to you to decide).
- How (or will) you are able to track online reporting?
- Are there reprogramming fees?
What to do when wanting to switch providers…
Once your credit card processing agreement is in place, it’s not uncommon to feel as though you made a mistake, and want to seek a different provider. It may very well be that you’re spending more money than what you should be paying, and that a different provider has the features better tailored to your needs.
Some services may allow you to use the same equipment as with your previous provider, so make sure to thoroughly review your options when switching services. If your current contract is expiring soon, explore whether or not your service provider will allow you to pay a lower fee.
Make sure your equipment is up-to-date and functioning…
There is no better time than now to make sure ALL your software equipment is properly operating. Depending on the time of year and fluctuating market value of your product, your point of scale (POS) needs to be up-to-date. For example, during Black Friday, you may want to alter the price of your product(s); so, it’s essential that you work collectively with your merchant account provider well in advance so that you’re ready for large-scale productivity.