9 Questions to Ask When Shopping for Merchant Services
How do I choose a credit card processor?
It's a tough question. Choosing the right merchant account provider can influence your customer satisfaction, your brand, and ultimately your bottom line.
Payments are usually the last interaction your customer has with your brand, and it’s always important to end that experience on a good note.
However, finding a payment processor with the products, services, prices, and features that are the right fit for your business may not be a simple task. Especially, when you don’t even know what separates a bad processor from a good processor.
So, we came up with the top questions to ask your prospective or current credit card processor.
How to choose a credit card processing company and nine important questions to ask:
1. What can you offer me that other processors can't?
A processor could be in business for only a few years and have all the features, services, and support that your business needs — they may even offer more than another processor who’s been in business for 30 years.
The fact of the matter is, you want someone with a proven track record, with credibility and consistency, and with a steadfast reputation.
Many contracts last for 3 to 4 years so treat them like a prospective employee and check their references. Call their existing clients and ask about their experiences, read up on their case studies, and ensure you are checking their reviews online.
2. How much time will it take to get set up with your technology?
Setting up a payment terminal should be as easy as “plug and play” and an eCommerce solution shouldn’t take more than a few minutes.
Your focus should always remain on your business operations and sales opportunities, and more importantly, your workday should not be interrupted.
There is a myth that being able to accept digital payments needs to be a complex, lengthy project. But, most payment processors can get you approved for a merchant account in under 2 business days and get your equipment shipped to you in under 2 business days.
Getting the hang of new technology can be a bit of a learning curve, so a good payment processor should give you all the necessary resources and even assign you an activation specialist to ensure your experience is hassle-free and seamless.
3. What types of payment methods can you process?
Some payment providers only allow you to accept a credit card by swiping it on their technology and force you to purchase another product of theirs to accept alternative methods such as contactless debit transactions or Apple Pay and Google Pay. Talk about a money grab. If you find yourself discussing business with one of these processors, you should start looking elsewhere.
Most providers offer debit and credit machines that accept contactless NFC tap payments, EMV chip dip payments, mobile wallet payments such as Apple Pay and much more all on the same payment terminal for the same low monthly rental cost.
These are some of the most basic terminals on the market, so why would you settle for anything less? You'll want to be able to accept the payment pBy not accepting all payment methods, you’re inviting them to go do business with one of your competitors.
4. What types of pricing models do you offer?
And are there different rates or fees associated with different card types?
Some payment providers charge different fees and rates to process different types of credit cards (basic, business, and rewards), as well as different fees and rates depending on the way the payment was accepted and the industry your business is in.
It’s important to know exactly what you’ll be paying to process each type of transaction and to understand your bill.
Processors that use discount pricing or tiered pricing models often charge hidden fees and use shady sales tactics to lure merchants in.
By advertising low rates that get you to sign up, only to find out that the majority of your customers do not use cards that qualify for these rates is just one way that payment processors can rip your business off.
For more information on pricing models and their pros and cons read our Pricing Made Simple eBook.
If you do not want to get lost in the world of processing fees and interchange rates and you want to know exactly how much your business owes each month on your payments bill, then your best option is to choose a provider with a flat rate pricing model. One low flat rate no matter the card type, and no matter the payment method.
This makes for simple accounting and reporting each month. You should choose a processor that is flexible in their pricing options and will accommodate your business and personal needs.
5. How long is my contract / how long am I committed?
Contracts are usually 36 months long. However, as per the Code of Conduct, at the event of any rate change that may affect your cost of processing payments, you are entitled to cancel your agreement free of cost, regardless of the time remaining on your contract.
These rate changes typically happen twice a year and you have 90 days to decide to cancel each time this occurs. This means that for 6 months out of the year, you are basically a free agent. But, if you cancel during any other part of the year, you will likely have to pay a cancellation or liquidated damages termination fee to pay off the remainder of the contract.
Be wary of longer contracts or merchant service providers that do not abide by the Code of Conduct. The best type of provider is one that will lay everything on the line and be fully transparent in their costs and opportunities to cancel.
If a new processor says they will cover the cost of your cancellation fee if you switch, be extremely suspicious as there is never a free ride. This processor will likely recoup those costs by charging large setup fees, higher than normal rates, hidden fees, and unnecessary charges on your bill.
6. How quickly do I receive my funds after an approved transaction or authorization?
If your provider does not offer you next day deposits, you should look elsewhere. You worked hard for your money and the last thing you need is an accounting nightmare tracking down your settlements due to funding delays.
Some providers offer payment terminals that automatically settle at the end of every night, other terminals require manually settling your terminals every day.
Some processors advertise next day deposits, when in reality it could take up to 5 business days. So read up on their reviews and make sure you confirm it with your account manager.
7. What fraud protection services do you offer?
Accepting EMV (Europay, Mastercard, Visa, better known as chip card) can vastly reduce card-present fraud due to its numerous security features such as pin entry.
If you have an e-commerce site, card-not-present fraud prevention tools such as mandatory entry of card expiry date, AVS (Address Verification System) and CVV or CID (Card Verification Value or Identification Number) are highly important as they verify the owner and possessor of the credit card being used.
These are security standards in payment processing. If your provider wants to charge you more for these services or does not offer them, you should go elsewhere.
Your merchant service provider should be your fraud prevention guru. They should customize any added security features based on your business’s needs and risks.
Features such as IP velocity filters or IP country blocks that limit what countries can make purchases or how many times one can make a purchase on your site.
8. Do you assist with my business PCI compliant?
PCI (Payment Card Industry) Standards ensures your business accepts, processes, stores, or transmits cardholder data in a secure environment.
This helps your business prevent all types of fraud and theft, both in-person and online.
PCI Compliance is as simple as following a checklist and answering a questionnaire annually.
Some payment processors are notorious for charging a PCI Compliance fee per month and not helping your business in actually becoming PCI Compliant. Then when your business fails its annual assessment, they charge you a non-compliance fee per month.
Payment processors like us help ensure your business is PCI Compliant up to $100,000 per incident by walking you through the questionnaire and fulfilling the checklist and do so at no extra cost to your business.
9. What customer support is available?
You want to make sure you have support no matter what time of day it is. If something goes wrong, any interruption to your business can cost you a loss of revenue and a loss of time troubleshooting the problem.
Pick a processor that offers 24/7 phone, email and live chat support and has a reputation for solving technical issues efficiently and quickly.
You also want to be sure you have the necessary resources and tools to troubleshoot the issue yourself. Whether it’s terminal guides or online support articles, sometimes the issue is simple to fix and does not require a phone call to customer support.
Now that you know what questions to ask, see why we might be the right fit for your business.