Top 10 Tips for Choosing a Merchant Services Provider
INTRODUCTION Choosing the right merchant services provider for credit card processing should be a top priority for all business owners. Unfortunately, merchants are often intimidated by the process and afraid of making a mistake. Some careful thought and preparation can help ensure that the experience and outcome are the best they can be. An important decision like choosing a merchant services provider involves a number of steps. These include researching available options, seeking recommendations from other merchants, identifying likely candidates and carefully comparing their products and services. The final decision comes down to a number of critical factors, such as the provider s experience and reputation, the package they re offering and how well it meets your requirements, and of course, cost. One thing is certain: there are plenty of merchant service providers out there to choose from, and they all advertise that their deal is the best. But best for whom? Credit card processing is not a one-size-fits-all proposition. Consequently, merchants need to take the time to analyze their needs and outline them clearly and honestly to a potential provider, who must then tailor a package of products and services to meet those requirements. TOP 10 TIPS FOR CHOOSING A MERCHANT SERVICES PROVIDER 2
HELPFUL TIPS To ensure that the whole process goes smoothly from start to finish, we offer the following tips: 2 Tip: Free does not necessarily mean free. You will see many providers advertising free merchant accounts, free terminals, free processing or free internet gateway. When it comes to the word free, the devil is in the details (i.e. the fine print at the bottom of the page or contract). Question all free claims with the provider and make sure you understand all the terms of the deal before signing up. Keep in mind that just because no charge for a product or service appears on your statement, it may not be truly free. The cost may have been folded into another charge, or other charges may have been bumped up a notch to make up for the free item. 1 Tip: Carefully research the options available to you. You are creating a business alliance with a provider who will be involved on the financial side of your operation. That s why it s important to choose a reputable provider with a proven track record. Do initial research online, in the Yellow Pages or through local business associations. Ask other merchants if they would recommend their provider. Collect names and data for your short list of candidates, then check out each potential provider with the Better Business Bureau, or type their name into a search engine and see what pops up. Trust your gut if you don t like what you see or hear, move on to the next name on your list. 3 Tip: Fees require an in-depth discussion. As you talk to providers, you ll learn that there are many different fees and rates associated with credit card processing. Some, like interchange, transaction, batch processing, monthly statement and chargeback fees, are standard in the industry and all merchants pay them. Then there are the so-called junk fees. Typically these include charges like file fee, security fee, audit fee, conversion fee, over-limit fee, excessive transactions fees and billback fees. If any of these appear in your contract, ask that they be removed or they ll show up on your monthly bill. Additionally, once you ve signed on with a provider, check your statement each month to make sure you re not charged for services or products you re not using. For example, if you process via the internet and you see a charge for dialup service, question it. TOP 10 TIPS FOR CHOOSING A MERCHANT SERVICES PROVIDER 3
HELPFUL TIPS 4 Tip: Be upfront with providers about your business and your plans for the future. In order to make you the best possible payment processing deal, a provider must have a thorough understanding of all facets of your operation. If you re currently running a traditional retail business from a storefront but expect to expand onto the internet, let the provider know so they can include related products and services in their proposal. Businesses with a mobile workforce can benefit operationally and financially from mobile or wireless credit card processing, but not if the owner doesn t share that information with the provider. Again, the provider wants your business to be competitive and successful. Help them do their job by being open about your plans. 5 Tip: Complete your merchant account application honestly. The provider will request specific information about you, your business and your personal finances on your merchant account application. In addition to contact, banking and tax information, you will also be asked about the type of business you operate, your processing volume and average sales amount. Merchants who are already accepting credit cards are usually asked for several recent statements from their current provider. A personal guarantee and copies of your articles of incorporation and business license or permit are also requested. Merchants who misrepresent their business or tamper with their financial information are likely to be caught and rejected by the provider. 6 Tip: Ask specific questions about the financial side of the process. Imagine not asking about what your monthly payment will be or when the proceeds from your credit card transactions will be deposited into your bank account! You have a right to know upfront exactly what your financial obligations to the processor are, and vice versa. For example, will your rates and fees change without advance notice? How soon will you have access to your funds after a transaction? What is the policy on chargebacks? How much will it cost to modify your package of services if your requirements change? These are all valid questions that deserve honest answers from a potential provider. 7 Tip: Give serious consideration to any fraud protection programs that are offered. Credit card fraud can and does happen to merchants of all sizes. In fact, there s ample evidence that cyber thieves, scammers and fraudsters specifically go after small to mediumsized merchants because they re considered soft targets and vulnerable to a blitz attack. Achieving and maintaining PCI compliance is just the first step in the process of keeping your sensitive information and that of your customers secure. A reputable provider will assist with PCI compliance and offer a data breach security program that helps offset potentially huge expenses following a suspected or actual breach of payment card data. TOP 10 TIPS FOR CHOOSING A MERCHANT SERVICES PROVIDER 4
HELPFUL TIPS 8 Tip: Allow adequate time for setting up your merchant account. Applying for, getting approved and set up with a merchant account doesn t take a lot of time, especially if you re well qualified and prepared to provide all the necessary information. A reputable provider can usually approve and equip you within a few days. However, procrastination will work against you if you put off the process until just before you need to start accepting credit cards. Credit cards are important to your business, so put your merchant account at the top of your to do list and make it one of your first priorities. 10 Tip: Enjoy the benefits of accepting credit cards. The potential advantages of accepting credit cards are numerous: increased customer convenience and satisfaction that builds customer loyalty improved branding for your business that makes you more competitive in your marketplace higher customer conversion rates increased customer spending no more bounced checks or collections 9 Tip: Carefully read the contract. You ve already gone over the details of the deal with your sales rep, so why waste your valuable time on the fine print? The best answer to that question is: protection. You are about to sign a legal document establishing a long-term relationship with this merchant services provider, so you want to be 100 percent sure of what is required of both parties. Reviewing the contract possibly with a legal or business advisor is the last step in the selection process. It s also your last opportunity to make sure the deal you agreed to is the deal you are getting. Ask for your own copy of the contract as well as the provider s terms and conditions or service agreement and then read them all! guaranteed and timely settlement with payment directly into your merchant account new options for growing your business, including internet, mobile and wireless processing fewer trips to the bank to deposit cash and checks Credit card processing may seem like an expensive proposition. In actuality, it s a business expense that can bring in more money than it pulls out, making it an excellent investment in your business future. When you calculate the time and effort credit card processing saves you, it may well turn out to be the most cost-effective payment option of all. TOP 10 TIPS FOR CHOOSING A MERCHANT SERVICES PROVIDER 5
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