The 5 Most Important Factors to Consider When Choosing a Merchant Services Provider

If you're a business owner, then you know that accepting credit card payments is a must. Not only does it make your customers' lives easier, but it also makes it easier for you to manage your finances.

That's why it's important to choose the right merchant services provider. Not all providers are created equal, so it's important to do your research before making a decision. In this article, we will discuss the most important factors to keep in mind when making your decision.

I'll also share some tips on how to get the best deal possible.

Before we get in depth, you may ask " What EXACTLY is Merchant Processing?"

Let me break it down for you as simply as I can: Merchant processing is the acceptance, processing, and settlement of payment transactions for a business aka merchant.

A bank that contracts with (or acquires) merchants is called an acquiring bank, merchant bank, or acquirer. Acquiring banks sign up merchants to accept payment cards for the network and also arranges processing services for merchants. They can contract directly with the merchant or indirectly through agent banks or other third parties.

A bank can be both an issuing bank and an acquiring bank, but banks most often specialize in one function or the other. Merchant processing, however, is a separate and distinct line of business from credit card issuing. It is generally an off-balance sheet activity with the exception of merchant reserves and settlement accounts.

Merchant processing involves the gathering of sales information from the merchant, obtaining authorization for the transaction, collecting funds from the issuing bank, and reimbursing the merchant.

It also involves charge back processing. The vast majority of merchant transactions are electronically originated (as compared to paper-based) and come from credit card purchases at merchant locations or the point-of-sale (POS).

Merchant processing increasingly includes transactions initiated via debit cards, smart cards, and electronic benefits transfer (EBT) products.

Ok... so now that that is out of the way, let's discuss what you should be looking for in a merchant service provider.

#1. Find a provider with a proven track record without numerous complaints.

To find a merchant service provider with a good track record, you need to look for three things: a lack of complaints( let's say minimal for arguments sake), a long history in the business, and good reviews.

First, check to see if there are any complaints against the provider. If there are, that's a red flag....even if there are few complaints, be sure to read them carefully to see if they're valid. Next, see how long the provider has been in business. A provider that's been around for a while is likely to be more stable and trustworthy than a new provider.?The longer they've been around, the more likely it is that they're doing something right. Finally, check out what other people are saying about the provider. If you can find positive reviews from happy customers, that's a good sign that you've found a merchant service provider with a proven track record.

#2. Make sure the company has excellent customer service.

As a business owner, it's important to make sure you're working with a merchant service company that has top notch customer service. After all, you rely on their services to process payments and keep your business running smoothly. You definitely don't want anyone playing with your money! I know I don't.

Great customer service support will be able to answer any questions you have and resolve any issues that may come up. They should also be available 24/7 in case of an emergency. By working with a company that has great customer support, you can rest assured that your needs will always be taken care of.

#3. Know what the fees are and the rate plans offered.

As a business owner, it's important to know what fees you'll be charged for processing credit and debit card payments. Merchant service providers typically charge a flat rate which is equal to the percentage of the transaction amount, along with a per-transaction fee. These fees can vary depending on the type of card being used. In addition, rates can also vary depending on the transaction type meaning:

Is the customer physically handing you a card in person, or are they on your website buying online?

The typical flat rate fee for an card present transaction is 2.6% + 10￠ and 3.5% + 15￠ for card not present.

The rate plan you choose will affect the overall cost of processing payments. Make sure to compare the costs of different rate plans before choosing a merchant service provider. By understanding the fees involved, you can make sure you're getting the best possible deal on credit card processing.

#4. Be sure they don't have caps on transaction volume.

Whether you're a small business just getting started or a large enterprise processing millions of transactions per month, it's important to make sure that your merchant account provider doesn't have caps on transaction volume. If your provider does have such caps, you may be charged additional fees for every transaction over the limit, which can quickly add up and eat into your profits. Additionally, transaction volume caps can also limit your growth potential, as you'll be unable to process more transactions than your provider allows.

To avoid these issues, be sure to check with your merchant account provider in advance to see if there are any transaction volume caps in place and if they'll be able to accommodate your needs. In doing so, you can be confident that you won't be surprised by hidden fees or getting your accounts shut down as you scale.

#5. Verify if it's PCI compliant and registered.

When you're looking for a merchant account provider, it's important to make sure that they are PCI compliant and registered. This means that they adhere to the highest standards of security for processing credit card transactions and ensures that they have the proper security measures in place to protect your customers' sensitive information.

A PCI compliant provider will be transparent about their security practices and will have up-to-date encryption technology. They will also have a dedicated team to monitor compliance and address any concerns. A good merchant account provider will work with you to ensure that your business is successful. By verifying that your merchant account provider is PCI compliant, you can be confident that you and your customers' information is safe and secure.

Did You Know?

If you have ever seen a payment processing company advertising 0% processing fees it is usually because they are promoting a cash discount or surcharge program.

This means that a business may offer a discount to customers who pay by cash or check instead of a credit or debit card. When they pay by card, either a 3 or 4% fee is added to the bill to cover the credit card fees, eliminating all the business' owners fees, saving business owners 2,000 - 3,500 monthly on their credit card fees for every 100k they process.

It's kinda like when you go to use that atm that is not associated with your bank and they hit you with that $3 convenience fee just to get some cash. Or when you got to the chinese takeout and they charge you a fee if you use your card and your food is under $10. It's an overall good strategy to save money and increase revenue.

The bottom line is that there are a lot of merchant services providers to choose from, and it can be difficult to determine which one is the best fit for your business. By taking into account the five factors we’ve outlined in this post, you should be able to make an informed decision about which provider is right for you. Have you chosen a merchant services provider yet? If not, which of these factors will be most important to you when making your decision?

Questions? Did I miss anything? Share below in the comments---I'd love to hear them! ????

P.S... If you are interested in getting a transparent merchant services provider with the best rates, excellent 1 on 1 customer service, with no volume caps that is 100% PCI compliant I am at your service!

I am offering a free cost savings analysis to review your merchant statement & help save your business money. Click here to schedule a call with me.

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Terrina Taylor Is a Business Consultant and Payments agent at Terrinataylor.com aka The Payments Connoisseur, a direct merchant services provider for small businesses. Growing up in a family owned small business, she knows firsthand how difficult it can be to understand all the back-end technical processes that go into running a successful business. Her goal is to provide clarity and support to any size business or entrepreneur whether they have been in business for years or is just starting out. She is a self-proclaimed techie that loves software, systems and automation.

Terrina is also a wife and mother so she knows all about work/life balance and raising a family. She resides in Baltimore, MD with her husband of 14 years, and her two daughters.