If you plan to run any type of online business, you will typically have to decide on a payment processing provider to handle credit card and other transactions for you. While there are many different companies providing these services in this day and age, the breadth of choice can make it difficult to know who to actually choose and what level of service will be best for your specific needs.
If you’re keen to find the right provider of merchant services for your business in 2016, read on for some tips to keep in mind before you sign on the dotted line.
Online credit card processing costs can come in various forms. For starters, many providers charge a start-up fee that covers setting up an account in their system and having things configured to work with your website or physical point-of-sale machine/system.
Next, merchant services businesses may charge for their services by way of a flat fee per transaction (no matter how many transactions are processed in the month or year); a variable fee that is calculated according to a minimum or maximum number of transactions in the month; or a monthly payment plan.
Some providers will expect you to commit to an annual service (and may charge a cancellation fee if you want to stop the service early), while others may provide monthly plans with no minimum service periods or cancellation costs to worry about.
Obviously price is going to be a top consideration for most businesses, but when making your decision, it’s important to ensure you really understand all of the potential fees involved. When comparing providers, keep in mind the overall costs to make sure you get the best deal. This will include:
- Start-up price
- Percentage fee for each transaction
- Cancellation costs
- Withdrawal fees each time balances are transferred to your bank account
- Extra charges for customer service
- Costs for integration with your system
- Any other potential fees
You should also look into the access to your funds that is provided by each company, as this can certainly affect your cashflow. Merchant services firms with cheaper rates may turn out to also be those who hold onto the money you receive from transactions for weeks at a time, rather than depositing funds within a day or two. Always ask about the deposit times before you sign on the dotted line.
It also pays to ensure that the processing provider you are considering can take all forms of payment, and to determine if there are higher rates involved for doing so. For example, check whether you can incorporate payments using PayPal, Amex, and all debit cards, and what fees you will be charged for these types of transactions.
As well, some providers can offer volume discount options whereby you pay lower fees as your number of transactions or monthly or annual revenue increases. To save some money it is worthwhile asking providers directly about these types of discounts, as they might not be advertised publicly but can often be negotiated.
Digital security is another particularly important part of finding the right payment processing provider. Unfortunately hackers around the world are becoming more sophisticated all the time, and continually find new ways to break into websites and point-of-sale information in order to steal credit card data and the like. This means that it is vital to choose a merchant services business that provides adequate security.
Proper systems will provide things like data encryption; support for comprehensive SSL certificates; CVV2 verification; and security for the billing addresses provided during transactions. The better systems will also take additional measures, such as tighter restrictions on how data is sent and stored, and more complicated encryption algorithms that are harder to hack.
While you probably hope that you never have to get in touch with your merchant services provider because everything runs smoothly, this is not likely to be the case. As a result, it’s important to select a payment processing firm that can address any issues immediately, and not leave you unable to take sales for a time and thereby missing out on revenue.
When investigating potential packages, look for a company that can provide you with comprehensive customer assistance including phone support 24 hours per day and rapid email responses or online live support. Although these packages will generally be more expensive, they can certainly turn out to be worthwhile over the long run.