You’ve got a full array of credit card processing companies to choose from when you want to hire a team you can trust. It isn’t always easy to tell some of these groups apart, especially since there are so many choices out there that all look the same.
You can use a few ideas to help you pick the right credit card processing company that will manage whatever needs you hold. The goal should be to find a solution that is affordable and works for you.
Things to Look When Choosing Credit Card Processing Companies
Understanding the Duties of the Processor
A credit card processor will help you accept credit card payments. The processor will provide access to a gateway that links you to the necessary credit card networks. You’ll require access to that gateway if you want to accept credit cards from your customers. But the challenge of finding someone you can trust can be daunting.
What Are the Charges?
Every credit card processor will charge different fees for services. A processor can charge anything from 1 to 3 percent of each transaction you process.
Processors can produce different charges based on:
- The unique rates they have for different industries and risk factors
- Whatever unique fees a company may charge
- How much it costs to set up a system
- Whether there are any monthly or annual fees for using the service
- What it costs to get your equipment ready
These charges are negotiable, which is different from what the major card networks can provide. The networks have non-negotiable interchange rates that you must spend on all transactions. But with your credit card processor, you’ll have the option to negotiate a new deal depending on your work efforts and your business credit rating. You may get a better deal on services, although some parties may not be as flexible with work as you wish.
What Payments Do They Accept?
Credit card processors should be open to accepting various payments. These include cards from all major networks. A processor should support cards like these:
- Traditional credit cards
- Debit cards from all debit networks
- Gift cards
- Prepaid cards
- Corporate or business cards, including fleet cards
How Does the Customer Service Department Work?
The customer service department at your process should also help you with whatever needs you hold. The department should be accessible at any time of day. It should be open to cover your questions by email, phone, or through a live chat service. Any provider that can answer your questions will help you well.
What Equipment Works?
Your credit card processing company should help you find the equipment your business needs for collecting payments. The best processor will help you with a few points:
- A processor should not offer a lease for services. A lease can be expensive and restrictive, plus you’d likely return your equipment after the lease ends.
- A processor should offer desktop and mobile equipment. These include items that can accept EMV, magstripe, and NFC payments.
- Anything you use should be easy to program. You can ask a processor to help you program your existing setup and to configure your POS platform with a system that handles whatever functions you want to run. Some POS setups use Android-based platforms that let you add different apps as necessary.
- A quality processor’s services will be compatible with any equipment you currently own.
Some processors are flexible in what you can manage. Many processors will not require you to have specific items. But others may ask you to stick with a certain solution, especially if that processor has a partnership with such a group. Not all processors will do this, but just be careful and aware of what you’re getting.
Review Contract Info
Some processors will provide monthly deals where you can pay for services by the month. The service is better than if you are stuck with a long-term contract. A processor that gives you a monthly agreement will let you leave the company if you ever find someone else you can trust.
Sticking with a long-term contract isn’t always the best idea when finding a processor. A contract may be expensive to get out of, plus you may be locked into certain terms during the agreement. You could also be stuck with an unfair lease.
The Billing Method
Look at the billing method a credit card processor uses when finding a suitable party. The billing method can entail many points:
- An interchange-plus system has a processor charging an extra percentage of a transaction alongside the interchange rate a network charges.
- A flat rate will involve the same charge for each transaction. This option sounds convenient, but it may be cost-prohibitive for businesses that handle low-value transactions.
- A tiered pricing platform can entail different rates surrounding the type of card being used or the value of the transaction. The tiered system is best if you tend to accept specific transaction types more than others.
The processor should help you review what you’re getting out of a service. But the group should also be direct and honest over what you’re spending. Sometimes a processor might charge additional fees for services.
What Fees Are There?
Watch for whatever fees someone might charge when helping you with something. These fees can be high and restrictive. Some of these fees include ones for:
- Maintaining your account
- Processing chargebacks
- Maintaining PCI compliance; some entities may also charge more expensive non-compliance fees
- IRS data preparation fees
- Equipment fees
Each company will have different rules for what you can handle. But some processors might hide their charges. They can make their contracts confusing enough to where you won’t find the proper data on what they’re spending here. Talk with whatever processing company you want to hire when finding something of value.
Be certain when looking for a credit card processing company that you know what’s available. Processors can do many things for your business needs, but you must watch how you’re going to choose someone you can trust.
Frequently Asked Questions
Who are the key players in credit card processing?
The key players in credit card processing are merchant service providers (MSPs) or payment processors. These can include well-known companies such as PayPal, Square, Stripe, Authorize.Net, and First Data. They facilitate the processing of credit card transactions between merchants, customers, and the respective credit card networks, such as Visa, Mastercard, American Express, and Discover.
How do I choose the best credit card processing company?
Choosing the best credit card processing company involves considering several factors. Evaluate the pricing structure, including transaction fees and any additional charges. Assess the provider's security measures and fraud prevention tools. Consider the compatibility and integration options with your existing business systems. Look for reliable customer support and responsiveness. Additionally, consider the provider's reputation, industry experience, and the availability of features that align with your specific business needs.
What types of payment processing solutions are available?
There are various payment processing solutions available to merchants. These include traditional point-of-sale (POS) systems, mobile payment solutions, virtual terminals for online payments, e-commerce plugins, and APIs, and integrated payment gateways. Each solution has its own features and benefits, catering to different business types, sizes, and payment preferences. It's important to evaluate your business requirements and choose a payment processing solution that aligns with your specific needs.
What are interchange fees, and how do they affect credit card processing?
Interchange fees are fees charged by credit card networks (Visa, Mastercard, etc.) to the merchant's acquiring bank for each credit card transaction. These fees are set by the card networks and can vary depending on factors like the type of card (debit, credit, rewards), transaction type (online, in-person), and merchant category. Interchange fees are an essential component of credit card processing costs and can significantly impact a merchant's overall processing fees.
Should I consider additional services offered by credit card processors?
Yes, it's worth considering the additional services offered by credit card processors. These services can include fraud protection, chargeback management, recurring billing options, customized reporting and analytics, integrations with accounting software, and loyalty or gift card programs. Assess your business needs and determine if these additional services can enhance your operations, streamline processes, and provide a better experience for your customers.
What are the contract terms and cancellation fees associated with credit card processing companies?
Contract terms and cancellation fees can vary among credit card processing companies. Some providers may require long-term contracts with early termination fees, while others offer month-to-month agreements or no cancellation fees. It's crucial to thoroughly review the terms and conditions of the contract, including any potential penalties or hidden fees, before committing to a credit card processing company. Understanding the contractual obligations will help you make an informed decision and avoid any unwanted surprises in the future.
