Choosing a Credit Card Processing Company and Service

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Choosing a Credit Card Processing Company and Service
In todayâ s culture, it seems as though consumers are looking for the most convenient way to pay for their merchandise, which has likely been the cause of increased debit and credit card transactions that many stores are seeing. As a business owner, it is almost necessary for you to have to capabilities of credit card processing. Without it, you could very well end up going out of business, as the majority of people would much rather pay electronically than carry cash on them. In addition, many businesses are also making their products available online in order to reach more customers, resulting in the popularity of online credit card processing services. If you are a business owner that does not currently accept credit cards as a form of payment, reading this buyerâ s guide may provide you with information about credit card processing that causes you to reevaluate your available payment options. If already accept credit cards, this guide will simply provide you with a better understanding of the process, and could be helpful if you are looking to switch service providers. In either case, no matter what size you business is, it is important to understand credit card processing in order to make the best possible decision for your business.

This guide will explain the process of figuring out the best way to choose a merchant account service, along with the expected costs of each service, terminology you should be familiar with, what to avoid, and how to negotiate with competing vendors to get the best rate.

Why you should consider working with an outsourced merchant account provider.

No matter what industry you work in or what size your business is, accepting credit cards as a form of payment is becoming a necessity with any sales transaction. Companies that donâ t offer credit cards as a form of payment are likely to lose existing customers and discourage new customers from making a purchase.

A big advantages of using a credit card machine within your business is that it allows you to receive quick, payments. The funds can also easily be transferred into your account without requiring much work on your part. In addition, you also have the option of offering your customers various incentives, including prepaid programs or automatic withdrawal, which also can influence your customerâ s buying habits. Some credit card companies offer their own credit incentives, such as points earned toward a larger gift, which can make credit card payment a great choice for purchasing goods and services.

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Credit Card Processing Terms
In order to have a good understanding with what will be involved regarding a credit card servicesagency, you should get a feel of the terminology that is frequently used. The following are terms you may come across:

 

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Opening a Merchant Account
Before opening a credit card merchant account, there are a few qualifications with the credit card merchant account company that you must meet in order to ensure that your company is financially stable. In addition, credit card processing companies will also want to make sure that you are not operating an illegal business because they do not want to be responsible for any unpaid debts.

When opening an account, you should also expect that the credit card processor will want to conduct a credit check on your business, so in order for things to run quickly and smoothly, it will be helpful to have all of the necessary information on hand. You should also be prepared to answer any questions they may have. Most credit card companies will require approximately five credit references from current or former product suppliers or business partners.

Chargebacks are what occur when sales are reversed. These refunds are usually the result of fraud or an error on the part of the customerâ s bank. These are more likely to occur with businesses that offer services than just products. Merchant account vendors would rather not accumulate a number of chargebacks, so they will be looking at your past credit history for these actions. If you have too many chargebacks on your business account, you could be disqualified for the services or you may end up getting charged at an increased rate for each transaction.

If you have worked with a merchant processing company before, your new processor will most likely want a reference from this company to review your previous background and statements.

Credit card processors will encourage a high acceptance rate, but you will probably want to find a company that will also address any specific issues with your credit card terminal. It also makes sense to work with a company that has previously conducted with businesses in your similar situation. Working with a company to reduce your risks will most likely also offer the best rates for their services. To be safe, you should consider comparing three to five different vendors in order to find a company that can meet all of your expectations.

If you are a high-risk business that has a questionable financial background, you can expect that the process will take a while to be completed. Be prepared to answer any questions so that your business can get back on its feet. If you find that a business wonâ t be able to qualify you for their services, donâ t be discouraged; keep looking until you find one. You will eventually find a company that is eager to work with you and your business.

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High Risk Businesses
Some businesses using credit card merchant services are considered to be a high risk. This status is usually determined by the type of services and products the business promotes. If you are a start-up company, you should keep in mind that you could be seen as a high risk when compared to an older company because you do not yet have an established line of credit. The type of business you conduct may also put you in the high risk category. For example, if you operate an adult website, you may be at a higher risk than a company that offers retail clothing. Businesses with customers that are frequently dissatisfied with their services can also be considered a high risk. A high number of chargebacks can also have an affect what companies decide to work with you.

Your credit history, chargeback history, type of industry and the amount of time you have been running your business are just a few factors that a credit card processing company will consider before choosing to doing business with you.

A reputable ecommerce merchant account company will know how to work with any type of business situation and you should use them as a touch stone to maintain a positive business plan.

> The Internet has become a very popular place to purchase goods and services, and with that, credit card processing companies are also noticing the increase in fraudulent credit card transactions. If you have experienced fraudulent charges, the companies will also take this into consideration and may apply this situation to your costs for their services. Credit card fraud usually happens online because all that needs to be stolen in order to make purchases is a credit card number. Businesses that instill customer satisfaction policies, or guaranteed money back promotions are also a high risk because they may experience many chargeback transactions. You can research credit card companies in order to find a online merchant account agency that can prevent these occurrences.

If you know that your businesses will be considered a high risk by credit card companies, you can expect your rates to be higher as well as a reserve with your credit card processor.

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Evaluating Credit Card ProcessorsThere are many types of credit card processing companies available to provide you the service that you need. The following are descriptions of the different types of vendors to choose from:

 

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Hiring a Qualified Credit Card Processing Provider

 

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Making Sure Credit Card Processor Meets your Businessâ NeedsBefore you make your final decision on a credit card processing service provider, there are several factors you should consider.

Make sure the vendor you are working with offers reliable customer service. If any problems should arise, you will want to be able to quickly get in touch with your credit card processor in order to quickly resolve the problem. This is necessary in preventing the possibility of losing sales because your credit card system isnâ t working.

Study the reputation of the company you decide to work with and ensure that their business is legitimate and lawful. Be aware that there are a few businesses out there that are just looking to take advantage of new business owners. If you have bad feeling about a particular company, it is best to pass them up and choose to work with one that you are completely comfortable with.

Check to see if the potential company you want to work with is listed under the Better Business Bureau. Donâ t ever go into business with a company that cannot guarantee financial protection or security. You should always verify the businessâ address, contacts, email addresses, phone numbers and any other necessary information to contact the company. If you find yourself working with an unauthorized company, all of the gathered information will help you to recover any losses, and in addition, can help prevent other business owners from working with this company.

Gather information on how long it takes to get into contact with an actual customer service representative and how many times the company deals with chargebacks. You should find out as much as possible regarding their merchant services and make sure the company can meet your expectations. Test the knowledge of their customer service representatives and any other information they should be familiar on.

You should also consider getting references from other businesses that have worked with the same credit card processor so you can assess positive and negative business feedback. Ask about any personal experiences and how well the company dealt with business issues. You will probably not want to work a company that receives a lot of negative feedback.

If your business does a lot of transactions where credit cards are not physically present, see if your provider can encrypt credit card information, known as Secure Sockets Layer (SSL) protocol. This may be one of the most important services offered for an ecommerce merchant account .

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Credit Card Processing Service Costs You will need to consider the cost of the equipment needed to process cards in addition to the standard fees associated with credit card providers. You should also be aware of hidden fees.

Equipment The cost of credit card processing machines will usually range anywhere from $150 to $700 for basic models and can increase to much more. Wireless systems and models with other specialized features can start at $500 and go upwards of $1000. The more technologically advanced a machine is, the more expensive you can expect it to be. If donâ t have the budget to purchase the machine, you may want to consider leasing a credit card processing machine, which will usually cost $20 a month. Ultimately, the cost will depend on how many additional features you include to the machine and how many additional services you will need to use. If you forecast your business making a long-term investment goal, you may want to fork over the initial fee because it may save you a nice chunk of money in the long run. If you are interested in testing out various models, leasing out credit card processing machines may be the best way to go. If you are still unsure about using credit card processing in the long run, you should lease out different machines and then make the purchase based on your past experiences with each model.

Other Fees Apart from fees for machines and terminals, you should expect to be charged a discount fee when you use merchant account provider services. A discount fee is the percentage each merchant provider will charge you for each business transaction. Banks and larger companies will consider your amount of charges, types of transactions and credit history to come up with this percentage. Credit card processors will have two rates. One will be for transactions where the credit card is not present, such as purchases made online, and another rate for when the actual credit card is present and the transaction happens instantly.

Problems may arise when companies implement additional fees. Some companies may charge fees in addition to their discount fee, such as set-up fees or a non-refundable application fee. Depending on which provider you choose to do your business with, the aforementioned fees can range from $200 to $300. Many merchant account providers will charge a discount rate of almost two percent for transactions where the credit card is present. For transactions where the credit card is not present, the discount rate can be nearly three percent. You can also expect a monthly minimum fee, which is an average of $20.

Before you sign a contract with a credit card processing vendor, it is recommended that you get all fees in writing and review them thoroughly before agreeing to anything. Customer service fees or programming costs can also be added, so make sure you look for any details regarding these extra expenses. Donâ t be afraid to ask for detailed information in the case that the wording in your contract seems ambiguous.

Finding and signing with a reputable merchant account provider should be a priority to maintain the success of your business. You may have to agree to a higher transaction fee, but working with a reputable and legitimate vendor may be worth the extra costs. We hope that this buyerâ s guide provided you with useful information about credit card processing that will help you make the best decision for your business.

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