The merchant services industry is a competitive space. With such competition, comes the opportunity for businesses to potentially find themselves a better deal to save on credit card processing fees by switching to different merchant processors.
However, all merchants need to be both cautious and smart when it comes to changing providers. Picking up and moving for the next better deal doesn’t always result in the best opportunity for the business. Without checking the following details before making the switch, a business could end up being stuck in contracts with multiple credit card processing companies.
As a business owner, the following are important details in which you must confirm with your credit card processor about your current merchant account:
1. Check with your Current Provider to Find Out if your Merchant Account is still Under Contract
When you started your relationship with current merchant processor, you signed a contract. You may believe that it was a certain length of time, but confirm the length and that you are no longer in contract and only in a month-to-month situation at present. You can do this by finding the original merchant processing contract that you signed. If you cannot find your contract, contact your current credit card processing company. The easiest way to find their contact information is to look on your monthly merchant statement or to call the support phone number on the side of your POS system or credit card terminal.
If something doesn’t seem right when speaking with the customer representative, ask for a copy of your merchant processing application or lease agreement that you signed. This should be able to be delivered relatively soon and should not take several days.
2. Check with your Current Credit Card Processor to see if your Merchant Account Automatically Renewed its Contract
Some credit card processing companies automatically renew your merchant account for another term if you don’t contact them within a certain length of time prior to the end of your original contract. The typical time frame which you need to contact your credit card processing company to let them know you want to end the relationship is between 30-90 days from the date you signed the original contract.
3. Find Out the Status of your Credit Card Terminal or POS System
Understanding who truly owns your credit card processing terminal is important. Most credit card terminals and POS Systems are not shown as line items and billed with your merchant statement. To find out if you are leasing your credit card terminal, look through your initial paper work when you signed your merchant application to see if there is any documentation relating to leasing or processing equipment. Also refer to your bank account to see if there are any charges from a Leasing company.
If you are not leasing your credit card terminal, then you either purchased the terminal and own it outright or it was provided to you for “free.” Contact your credit card processor and confirm which scenario it falls into. If the credit card terminal was provided to you for free, most likely the credit card processor will request it be sent back. If you fail to return the device, often the credit card processing company will charge you for terminal at a much higher cost than the terminal is worth at the present time.
4. Contact your Merchant Processor after you have Switched to Cancel your Account
Just because you stop processing transactions through you previous credit card processing company doesn’t mean your merchant account has been shut off. Your merchant account does not end until you call the credit card processing company and let them know you want to cancel your account. In fact if you leave your merchant account, most likely you will incur monthly fees for having an idle account known as a monthly minimum on top of other potential fees such as a statement fee, PCI Non Compliance Fee, and among other monthly fees depending the provider. We recommend cancelling your previous account 3 business days after you have stopped processing to confirm that all pending transactions have deposited into your bank account.
5. Confirm the Cancellation of your previous Merchant Account
Upon requesting cancellation of your merchant, ask for the customer service representative for a confirmation or ticket # for proof that your merchant account has been cancelled in case for some reason you continue to receive fees.
6. Gift and Loyalty Cards
If you currently run Gift of Loyalty cards through your merchant processor, confirm these work with your new provider. Some programs aren’t transferable. If the cards won’t work with your new company, put an action plan in place for a successful transition to a new gift or loyalty card system.