Would you ask your next door neighbor to temporarily deposit your business funds in their bank account? Probably not. Especially if they told you that meant they could temporarily hold your money for no good reason, or even worse, that you were limited in how much money your business could make on any given day. Sound ridiculous?
If your business is processing payments through a payment aggregator, you are likely being exposed to these kinds of risks and restrictions. A payment aggregator allows businesses to process payments without setting up their own merchant account. By setting the business up to process payments through the aggregator’s merchant account, they offer a quicker, more simplified onboarding process. This creates the illusion that their services are somehow more convenient, but when the business gets busy processing payments things can start to get pretty ugly.
Holding Funds – It is not uncommon for aggregator systems to hold business funds for a variety of arbitrary reasons, often calling them “verification” holds, or giving no reason at all. A quick Google search will tell the tales of many business owners currently involved in litigation trying to get their funds released from a variety of payment aggregators. These arbitrary holds can go on for as little as a few days, to months, to years… Unfortunately, many businesses cannot survive these kinds of cash flow issues and go out of business indefinitely.
Processing Limits – Correct me if I’m wrong – but most people start businesses to make money, don’t they? Most payment aggregators place processing limits on businesses, RESTRICTING how much they can process in any given time period. Because the nature of these accounts are designed to serve micro merchants and businesses processing at a very low volume, businesses that are looking to make some serious cash are upset to learn that they will be cut off after a certain amount. This means your customers will want to do business, ready to pay with their cards, and you will have no choice but to turn them away until you can find another way to process the payment or get it worked out with your aggregator.
Higher Fees and Fixed Rates – This is a pretty basic concept. The more hands in the pot, the less everyone makes. When an aggregator uses their own account to process your payments they are naturally going to increase the fees and rates to accommodate their costs. When a business applies for their own account they are able to customize processing rates to fit their business needs and types of cards typically used by their customers.
Contacting Customer Service – If you are experiencing problems receiving funds or processing payments and need to get someone on the phone quickly, forget about aggregators. Another quick Google search will reveal the difficulties businesses have getting access to support with their aggregator accounts. Payment aggregators are well known for using avenues like Twitter and Email as their primary source of customer service for their customers. Are you interested in tweeting to find out where your money is?
Setting Up a Traditional Processing Account
Can feel like a daunting task at first, filling out paperwork, understanding rates and fees… But like anything else in life, this work will pay off in the long run by creating a payment environment that will help your business thrive and grow. Traditional processing accounts won’t arbitrarily hold funds, place limits on how much your business can process and will offer competitive rates customized to your business needs. Most importantly, when problems arise, you will have access to 24/7 phone support ensuring your access to help and your ability to conduct business.
Are your processing through a payment aggregator? Contact NTC Texas today for a complete rate review and learn about alternatives for your business.
About the Author – Rachida Arteaga, Director of Marketing at NTC Texas is a successful five year marketing veteran, running events and campaigns for large to small enterprises and non-profits. She specializes in blogging, social media, branding/ identity and search engine optimization, striving to provide NTC Texas customers and fans with entertaining and valuable educational resources to find success in all areas of their businesses.
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