5 Questions to Ask Before Choosing a Credit Card Processor

mobile_commerce2Selecting a credit card processor is one of the big decisions you’ll make when getting your business started or upgrading your business technology. You might ask yourself questions like, “Aren’t all credit card processors the same?” or “Is it really that important as long as I can accept credit cards from my customers?”

Let me give you a better question to consider:

Will your choice of credit card processor affect your bottom line?

The answer is yes. Not all credit card processors are alike and you will need to do some research to find the best one for your business. Since not all businesses function in the same way, there are many different credit card processors to choose from, each offering a slightly different system, set of fees, customer service support structure, and various other fine print details that you need to consider before you sign on the dotted line.

Below are some more questions you will need to ask yourself and the credit card processor you’re considering, if you hope to end up happy with your choice in the long run.

How compatible is the card processor’s system with your store’s retail model?

I have a friend who is struggling right now to build an individualized Point-of-Sale (POS) system because his credit card processor’s system doesn’t interact well with his website. This process really stinks, and he’s had a ton of difficulty moving products online because of this challenge, which was ultimately cost him money in the long run. You need to make sure that all points of the card processor’s system match up with how you hope to use that system to make sales.

What is the fee scale and how does it work?

If you don’t ask this question, your chosen credit card processor might not explain the exact details of how they charge their fees. And make no mistake—there are different fee scales and different ways of charging. Some companies charge per transaction while others charge a percentage of total sales, and some even charge flat rate fees. If your company does much of its business through several smaller transactions, the first fee scale would be the poorest choice, because you’d end up paying more in the long run. Think smart and make sure to select the company whose model benefits your business the most.

What kind of customer support does the company offer?

Do not underestimate the value of good customer support. You never know when the system might go down or you might experience a malfunction that will require a complete reboot. Technology can be a jerk sometimes, so you need to make sure you have a backup plan. A company that offers 24/7 customer support is worth its weight in gold (but never pay them that— always negotiate). Seriously, there are good companies out there that offer great support to their clients at a good rate. Make sure you select one of those.

What is the fine print?

This question actually breaks down into a few smaller details that you should know, most of which actually relate to the contract you would ultimately sign for service. Is there a cancellation or early termination fee if things don’t work out? You need to know this just in case unforeseen incompatibilities or issues arise. If there is and you have any hesitations, you may still want to shop around. You’ve got to weigh priorities and options until it feels right. A second fine print item is the questions of processing and transaction times. You need to know when to expect deposits into your account and if there will be any delays so you can plan accordingly regarding your ability to access your funds for the business. This information should be discussed in a contract and if it is not, get it in writing so that the company is legally required to adhere to the expectations any sale rep has set for you.

What protections does the company offer regarding data breaches?

Most credit card processing companies should already have switched to EMV chip and pin processing systems or have systems that process both older magnetic strip cards and the EMV cards. This is important because it’s a new standard that all credit card companies are being required to follow and because it helps to prevent theft. You will also want to make sure the company has some kind of system in place for dealing with data breaches, some kind of backup or liability insurance—so you don’t get stuck taking all the pressure in an instance of theft or fraud. Find out what your liability is in those situations, and especially make sure you understand any circumstances under which your company might be held fully liable for any situations that might arise. Yes, it can happen to you—in fact, you should plan for it to happen so you know what you do if the worst occurs.

Part of making good choices about a credit card processor is just asking the right questions. With the information above, you should be able to get a good idea of how a credit card processor works and narrow down your options to a solid list of viable candidates. Definitely keep in mind that there are options out there and that you should shop around before you make any final—and irreparable—decisions.

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AshleyAbout the Author – Ashley Choate is a native of Jacksonville, FL where she lives with her son, dog, and three cats. She graduated Magna Cum Laude from Jacksonville University with a BA in English and holds an MAED in Adult Education and Training. She lives for reading and writing, learning and teaching, and figuring out the day-to-day traumas and joys of mommyhood. .