If you’re joining the competitive world of processing credit cards, it can be a bit overwhelming to look for a credit card processor.
Now that you have an idea of who not to choose, you’re probably wondering who you should choose to do your processing.
Before you agree to anyone, here’s some questions to ask any potential credit card processor.
What do you support?
Knowing what services a credit card processor provides is key. You need to know if they will provide you with the best service for your business. This will require you to know how much volume you produce each month, and if you’re phone orders, online, or face to face.
It’s normal for them to ask to see a statement (if you had a previous processor). They’ll need it to get of an idea what service would be a best fit for you.
If you want to process electronic checks, or be a moto merchant, make sure that processor can provide the right services for your business by asking questions about their services.
Will you lease or sell me the equipment?
We have this mentioned in a previous blog, leasing is a dangerous red flag, and there should be almost no circumstance where you should go with a lease on equipment.
It may sound like a non commitment, but leasing is an expensive mistake compared to just buying a $200 terminal. If you lease, you’ll roughly $600 a year for just renting a terminal.
They may give you a bunch of reasons why it’s a sound decision to rent, such as, less upfront costs, or it allows you to stay current with technology. Unfortunately those answers don’t hold up to reality. The truth is it’s just an easy way for the processing company to pay a nice up front bonus to their salesperson that signs you on the lease. It only benefits the salesmen for your business to rent.
What kind of support do you offer?
Many processors will end the relationship at the sale (minus the statement they send you every month). They usually don’t have an inbound support team to help you if you have questions about your statement, or if your terminal has problems.
More often than not (and this is an industry secret so shhh), most credit card processing salesmen have no idea how to read your statement.
We’ll be honest, those statements can be confusing.
Ask your the processor sales guy if he can read your statement (and test to see if he can), and if he can’t see if there’s someone in his company that actually can.
Make sure you’re not going to to get outsourced to some call center through another company, where you’ll be on hold for a long time.
Will you raise my rates, and why?
Alright, we’re going to brutally honest, that at some point, everyone’s rates will go up no matter who you use as a processor.
Don’t walk away!
The fact is, every company will raise their rates after a few years, due to the costs of inflation, and sometimes the company’s own needs. Sometimes there’s behind the scenes costs processors have to pay that benefit you, and they’ll raise your rates to compensate for the loss.
Sorry! It’s unavoidable.
So why ask?
Because many processors (banks included) will raise your rates with no rhyme or reason. Most commonly every quarter.
All things must go up eventually, but it doesn’t be every quarter! If a business is going to raise your rates every 3 months, you need to stay away!
Will I be in a contract?
Asking a processor will help you understand what kind of business they are. If you are a non risk business and plan to buy your terminal, there’s no reason to be locked into a contract.
They they say “Yes, you will be in a contract”, it begs the question;“Why are you so afraid that I’ll leave you have to force me to stay?” Chances are, they turn over merchants quickly; so they’re trying to get what they can out of you, since they know you’re not going to stay.
There are some cases where you’ll have to enter into a contract. If a processor feels that you’re a certain risk (based on your industry), or they’ll be investing a lot of money with you up front, they may require a contract to protect them from the liability if your business fails.
Other then that, there is no reason you should be locked into a contract.
Are there any cancellation fees?
Chances are, the answer will be yes. If they say no, always double check the paperwork to be sure.
Sometimes if you go through a sort of third party, (like BNG), they can negotiate the fees to be waived.
The cancellation fees are not pretty, sometimes they’ll be a percentage of whatever would have been the estimated amount of the total volume of transactions of the month you cancelled.
Worse cases we’ve seen is having to pay out the average that would have been due every month if you hadn’t broken the contract.
Questions will reveal a business’ true intentions
It can be in daunting trying to navigate the world of credit card processors, but it’s important to ask them the above questions.
You want a company to do your processing that cares about more than just a bottom line.
Talk to a company that cares about your business
If you’d like to learn more about what our company can do for your business, or would like a free consultation, contact us here.