Your Credit Card Processing?
With 80% of online shoppers using credit cards, you can’t afford NOT to take credit cards. Did you know that merchants offering credit cards as a payment option increase their profitability by estimated 50%? With the inherent advantages involving credit card processing, should you really go with your initial instinct and choose the cheapest option?
Let’s face it – we all strive to have that BMW as opposed to a Dodge Neon, and even shop around for the best appliances. Knowing this, have you ever stopped to wonder why we, as business owners, opt for the lowest bidding credit card processor for something as important as our business?
As with other products, cheaper does not necessarily equate to better. How about reliability? If your customers are charged the wrong amount, or transactions are declined due to an unreliable or inaccurate gateway, who do you think they will blame? That’s right, YOU! Consider this – is the money you’re saving using the cheapest solution worth the cost of losing future business?
Let me share with you this example, a few weeks ago, a merchant was having trouble getting cards approved on his website. He then had his funds held by his processor. His merchant services provider told him it was his gateway and conversely, the gateway provider told him it was his merchant services provider. Needless to say, this merchant chose his provider based on the lowest bid, and what he got as far as service and reliability was a whole lot of finger-pointing and denial of liability.
I’m sure as business owners you are bombarded with calls and mailers from merchant services companies on a daily basis claiming their fees are the lowest. Fees for merchant services are an unfortunate reality, irrespective of the processor you choose, so it is important to choose the right company to partner up with.
Here are some things you should know when deciding on a merchant services provider:
Make sure whatever gateway you choose is compatible with your shopping cart software.
Rates and fees are determined by many factors: length of time in business, percentage of sales made over the phone or the internet, type of business, personal credit rating, and dollar amount of sales per month. A typical rate should be about 2.30% to 3.5%, but some companies charge as high as 6%. Poor personal credit or business type may warrant a much higher rate.
- Do not agree to a high discount unless you are sure no other company will process your charges for lower.
- Be sure to ask about all fees involved such as Gateway fees, ACH fees, monthly minimums, Address Verification Fees, transaction fees and statement fees.
- Read all agreements closely to determine the circumstances for which your money can be put on hold.
- Find out if there will be a hold or reserve on your account. If so, how much with be held and how long will it be held for?
- What types of fraud and risk monitoring does the processor and gateway provide?
- Who do you call when you have questions? For instance, a processor offering its own gateway is a better choice since there will be fewer support calls to make in the event of service interruption.
In my experience in this business, I have come across numerous merchants that got exactly what they paid for – very little.
Take my advice, do your homework and don’t settle for the lowest bidder.
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