Starting, owning, and operating a small business can be scary. Every decision made has the potential to make or break the company, even small decisions like when the best time to order business cards should be. Every decision can have an impact on overall performance. It goes without saying that one of the most nerve-wracking decisions business owners have to make is choosing a merchant account to handle and process transactions. Being that this is how money is actually put into the bank accounts, choosing a payment processor should be the result of extensive research. Researching and doing some digging should organically produce questions to ask before signing an agreement with a processor, but there are some basic questions that should always be asked before signing, ensuring that you’re getting the best merchant account for your money. Let’s take a look.
Let’s Talk Rates & Fees
We’ll cut right to the chase with fees – there’s going to be some, it’s just a matter of why they’re being charged and how much. You want to ask as many questions about rates and fees before signing a contract that could potentially lock you into being robbed with every transaction. That being said, according to PayPal, here are some of the questions you should be asking in regards to fees and rates of different payment types.
Are there different rates or fees associated with different types of cards?
Depending on the type of industry, transaction amount, and even card type, processors charge different fees for different transactions. Ask and see if you can lock down an exact fee that you’ll be charged based on your business transaction types.
What rates or fees do you charge when I swipe credit cards, enter them manually (key-enter) or accept them online
How you get customers credit card information to charge them comes with varying degrees of fraud risk (i.e., sharing CC info over the phone poses a higher risk than inserting a chip at the POS.) that reflects on the fees charged at the time of the transaction. Generally speaking, transactions, where the card is physically present, are charged lower than payments taken over the phone or online.
Do you charge a separate fee for your gateway?
This may be charged in addition to your processing fee.
When I refund a transaction, do I get any of the original fees refunded to me?
Usually, credit card processors keep the fees and charges associated with the transaction even if a customer returns something, meaning that businesses lose even more money with returns.
What’s the contract term and are there early termination fees?
Some agreements last as long as 2 years, with cancellation or early terminations fees built into the contract if you would want to leave the merchant or processor before the end of the agreement.
What fees do you charge each month?
“This question is deceptively simple since some processors might provide you with a seemingly low upfront monthly fee. But be sure to dig deeper: Some additional fees might be hidden in the fine print. These can include fees for batch processing, fund transfers from a merchant account to your bank account, as well as statement fees. Processors might “waive” some of these fees to get your business, but could add them back in after a promotional period.”
Is there a monthly minimum processing requirement or fee?
Some processors charge a minimum fee when the monthly transaction volume is lower than normal. This can be frustrating for small business owners just starting or seasonal businesses.
According to the PCI Compliance Guide, “The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that ALL companies that accept, process, store or transmit credit card information maintain a secure environment.” Basically, the set of standards that all transactions have to follow to ensure that credit card information is secure. Any organization that accepts, processes, and/or stores cardholder data must be PCI compliant regardless of size or transaction amounts. The answer to this question should always be “yes.”
What About EMV and Tokenization?
Just like being PCI compliant will ensure safe and easy transactions, so will encryption, tokenization, and using EMV processing. It’s almost unheard of in 2020 for a business to not accept chip cards. This is due to the fact that in 2015, a law was passed that says the merchant is responsible for card fraud if they don’t accept EMV payments.
Century Business Solutions breaks down these terms:
Encryption and tokenization. Encryption protects card data when it’s in transit, while tokenization protects stored data. Your processor should offer both encryption and tokenization with their service.
EMV chip card processing. Make sure your physical terminals are EMV compatible so you may process and authenticate chip cards. EMV chips reduce fraud and are substantially more difficult to counterfeit than the magnetic strip on a card.
Am I Going to be Supported?
This is a question that should definitely be followed up by some research, as any salesperson knows how to sell customer service. Try and find reviews from real customers that have used that processor you’re looking into. Ask your payment processor what their customer service looks like. Is there a number to call? Is there online support 24/7? While no one wants to run into issues with accepting and processing payments, it’s important to know what kind of help to expect if one comes up.
True Merchant Offers a Wide Range of Payment Processing Solutions
True Merchant is proud to offer payment processing solutions that are simple, secure, and supported by a qualified team of industry professionals. Our products range from online payment solutions, credit card machines, mobile credit card machines, and of course payment processing.
At True Merchant, we understand that choosing a payment processing service is not what most business owners look forward to. It can be daunting, confusing, and it isn’t the most thrilling part of operating a business. However, working with a well-established payment processor will allow your business to meet customer expectations for convenience, stay protected from fraudulent activity, and avoid costly fees.
This is a very important decision for any business. Contact True Merchant today to learn about how our payment processing services can help your business reach the next level!