Important Questions to Ask a Merchant Services Provider Before Signing Up

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The credit card industry doesn’t have the most solid reputation, but there are many good ‘eggs’ in the basket. You just have to know what questions to ask so you can find the right merchant services provider.

No two providers are created equal, just as no two businesses are identical either. Before you sign up with just any merchant services provider, ask these questions.

1. What equipment is included?

Don’t focus just on the processing prices, but on the equipment included for the prices. Is any equipment included? If so, which equipment and what other fees exist? Are there monthly rental fees or cancellation fees for the equipment?

If the provider can’t answer the question straightforward, look elsewhere. Whether you’re comfortable paying a monthly rental fee or not is your decision, but knowing all the facts upfront helps you decide.

2. What are the terms of the contract?

Know the contract terms. Are you locked into a contract, or is it a month-to-month subscription? If it’s a long-term contract, ask about the cancellation fees if the service isn’t right for you.

Also, ask about auto-renewals. Many services automatically renew your contract unless you specify otherwise. Know the terms of renewal so you know how far in advance to give notice to cancel.

3. Do you offer chip card processing?

Today most consumers want to use a chip (EMV) card versus magnetic stripe cards. This requires specific equipment and not all processors offer it, but they should. If a company offers chip processing, ask about the cost of the equipment.

If you don’t offer EMV processing, you could be liable for any costs incurred from chargebacks or fraudulent activity because EMV processing is much more secure.

4. How do you protect the merchant and customer’s privacy?

Security is a big issue with credit card processing. Not only are customers at risk of having their payment information or identity stolen, but merchants are at risk of chargebacks and other expensive fees because of the issues.

Ask a merchant services provider what measures they take for security. How do they protect you and your customers? Are they PCI compliant? What measures do they take for fraud protection?

5. What are the true processing fees?

Many merchant services providers offer introductory rates to lure you in. Once you’re a customer for a while (a few months), your true rate appears and it’s often much higher than the ‘teaser rate.’

Each provider has different charges for different payment methods. Make sure you know all of them, including card present and card-not-present (CNP) transactions. CNP transactions are inevitable, especially if you have an online presence, but you can minimize your costs by shopping around.

6. What are the customer service options?

You need customer service from a merchant services provider just like your customers need it from you. If your customer has a credit card question, you need to get the answers fast.

Ask about methods of communication, hours, and how quickly you’ll hear from them. Don’t assume you’ll have 24/7 support – ask.

7. Do I have a dedicated support specialist?

Dealing with payment questions and problems is urgent. Dealing with different people in each situation can be overwhelming, especially in the times you need help the most.

Some providers offer dedicated customer support specialists. This gives you a chance to get to know the specialist and vice versa. You’ll be able to conduct faster business and get the answers/solutions you need.

8. Are your processing services compatible with my current setup?

If you’re an existing business, you may not want to change your equipment or e-commerce setup. Know what you have and what you need to make sure the provider’s system will talk to your systems.

Switching over equipment and systems is possible, but it also could be a lot of work. If you want a seamless switch, work with someone who can work with what you currently have.

If you don’t have equipment, but want to buy your own instead of renting from the merchant services provider, ask if that’s an option for you. Not all providers offer this.

9. How transparent are the reports?

Figuring out your payment processing fees at the end of the month can seem 100 times worse than learning to balance a checkbook. If you can’t understand the fees charged or make sense out of the lingo used, it may seem impossible to budget for credit card processing fees.

Ask to see examples of the reports so you can see for yourself if it’s something you’ll understand. Ask as many questions as you want and make sure you have a solid understanding.

10. Will my rates increase if sales increase?

Credit card processing companies usually charge fees based on your sales volume. The more sales you do, the more your rates may increase, with some providers.

Ask how ‘fixed’ the rates are and under what circumstances they might increase. Make sure you read the contract’s fine print, too to make sure you understand how it works and if/when your rates may increase.

Ask the Questions Before Signing up with a Merchant Services Provider

It may feel like an interview, but a merchant services provider handles your business’s payments. If you choose the wrong company, it can hurt your bottom line in ways that could even put you out of business.

Ask as many questions as necessary so you feel comfortable that you’ve chosen the right company. With fintech becoming more popular today, there are more payment service providers than ever before. Shop around and find the company that provides the services at the prices you need.

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