Choosing the right vendors is incredibly important for your business. Choosing the best credit card processor can save you thousands. The companies you choose to partner with to help your business grow have a big impact on not only your day-to-day operations, but the overall health of your business as well. One vendor that touches all aspects of your business is your payment processing provider. It should go without saying that sales are vital to business success, so making sure you get paid fast and do so in an affordable way is a key element in maximizing profits.
Whether you’re looking for a payment processor for a new business or you’re re-evaluating your current one, the following tips will help you find the best credit card processor for you and your business.
Get to Know the Industry
Before you get too far into sales calls and specifics, first start with ensuring that you understand the payment industry and how it works. This will help you feel more confident and spot red flags with potential vendors before signing the dotted line.
The first thing any business owner should understand about credit card processing is the term interchange. This is an inescapable cost because credit card companies like VISA and Mastercard determine what this cost will be in exchange for the ability to accept their cards.
Every merchant pays interchange and the rate varies based on card type and the way the card is processed.
Another aspect of the industry to understand is who is involved. There’s the cardholder, the merchant, the acquiring and issuing banks, and the card associations.
- Cardholder: This is the customer who is in possession of a credit card and is making the purchase.
- Merchant: This is the business that is accepting the credit card as payment for a purchase
- Issuing Bank: These banks issue cards to cardholders and pays the acquiring bank for the purchases of their cardholders.
- Acquiring Bank: This is the merchant’s bank and accepts the payment from the issuing banks.
- Card Association – These are VISA, Mastercard, Discover, and American Express and are responsible for maintaining their card networks and setting interchange prices. Finally, a general understanding of pricing models is important to have when talking to payment processing vendors, especially since so many providers aren’t very transparent in their pricing.
- Percentage Markups: The majority of payment processing providers operate with a percentage markup payment model, meaning that a percentage is added on top of interchange for each transaction. This means that the more you process, the more you pay. With variable markups, it’s difficult to know what you’ll be paying each month in fees from your provider.
- Subscription: With this model, merchants are charged a monthly membership in exchange for the wholesale cost of interchange.This way, all you have to worry about is the direct cost of each card you process and one membership fee, making it easier for you to anticipate your monthly costs no matter how much you process.
Ask the Right Questions
Now that you know a little more about the payment processing industry, you’ll be able to ask all the right questions during your sales calls. There are a few areas that you should focus on, however, to make sure you cover all of your bases.
One of the most important things to ask about is what sort of fees you can expect. Not only do processing providers charge for the processing, they often add hundreds of hidden fees to your monthly statement that aren’t necessary. You can ask questions like:
- What are your fees above interchange?
- What are your monthly recurring fees? Yearly?
- Is there a setup fee?
- What is your contract policy? Is there an early termination fee?
Another area to discuss on your sales calls is customer service and values. Not only does the price need to make sense for your business, but the experience needs to be seamless and stress-free – you already have so much to worry about as a business owner!
- What hours is your customer service available?
- What are my options for communication? Phone support? With a real person? Online chat? Email?
- Will I be given a dedicated account manager?
- Do you have a self-service knowledge base for when I have a quick question?
Understand Your Technology Needs
Every business is different, so understanding exactly what you need before starting your search for a provider will save you countless headaches. There are many different ways you can accept payments, but they can be boiled down into two main avenues – card present and card not present. Do you have an online-only business? In-store only? Maybe you have a combination of the two. Regardless, make sure you have a good understanding of what you would like to have before you get on the phone with a provider.
However you process, it’s important to be able to view your transactional data in one place. Finding a payment provider that can give you access to a dashboard with all of the data you care about most should be included on your list of technology must-haves. More and more businesses are accepting payments through more than one channel to meet the demand of modern consumers, which can get complicated if you’re using more than one vendor for each. By choosing a vendor that can supply each processing solution you need and connect them all in one dashboard, you’ll be saving yourself countless headaches.
With this knowledge of the credit card processing industry, what to ask for, and what to look out for you’ll be able to tackle your next sales call with confidence! Choosing the best payment processing provider for your small business is vital, so write down what’s most important to you and your business and use that as a guide as you navigate your options.