Essential Questions to Ask When Choosing a Credit Card Processor
As a merchant, you might have faced hidden fees, unexpected rate increases, overcharged terminal leases, or poor customer service from payment processors. To help you avoid these pitfalls, I’ve compiled a list of crucial questions to ask when shopping for a new credit card processor. I am Gingergaye, president of Electronic Money Company, and here is what you need to know:
1. How Long Until Funds Are Deposited Into My Merchant Bank Account?
Timely access to your funds is critical for maintaining cash flow. Ideally, you should look for a processor that offers next morning deposits. This ensures that your earnings are available almost immediately after a transaction.
2. Do You Provide a Free Credit Card Terminal?
Some processors offer free credit card terminals, which can save you from the high costs of leasing or purchasing one. Ensure you understand any conditions or fees associated with the terminal.
3. Am I Under a Contract? If So, For How Long and What Are the Early Termination Fees?
Contracts can lock you in for extended periods. It’s important to know the length of the contract and any early termination fees that might apply if you decide to switch providers.
4. Do You Have Liquidated Damages for a Termination Fee or a Flat Fee or Both?
Liquidated damages mean the processor will continue to collect the fees and profits they expected to make until the end of your contract, even after termination. This can be very costly. Clarify if the termination involves liquidated damages, a flat fee, or both.
5. What Is the Processing Fee Model That Is Being Proposed? Flat Fee, Tiered, or Cost +?
Understanding the fee structure is vital:
- Flat Fee: A single rate for all transactions.
- Tiered: Different rates for swiped cards, keyed-in cards, and corporate cards.
- Cost +: Charges wholesale rates plus a markup.
6. Do You Have Chargeback Support?
Chargebacks occur when customers dispute a charge and the amount is withdrawn from your account. Ask if the processor offers support to help you contest these chargebacks and recover your funds.
7. What Is the Phone Number to Your Support Line? When Is It Accessible?
Reliable customer support is essential. Verify the accessibility and responsiveness of the support line by calling it yourself. Ensure they provide prompt and effective service.
8. What Other Fees Are There Besides Rate, Transaction Fee, and Monthly Fee?
Be aware of any additional fees that might be hidden in the fine print. These could include annual fees, setup fees, or fees for certain types of transactions.
9. What Are the PCI Compliance Fees and the PCI Non-Compliance Fees?
Payment Card Industry (PCI) compliance is mandatory for all businesses handling card transactions. Inquire about the fees associated with maintaining compliance and the penalties for non-compliance.
10. Do You Raise Rates Over Time?
Some processors gradually increase their rates. Ensure you understand their policy on rate changes over time and get a clear commitment on rate stability.
Contact Us for a Quote or Advice
Choosing the right credit card processor can significantly impact your business. If you need assistance or want to compare quotes, consider giving Electronic Money Company a call at 505-296-2847 or visit our Contact page. We’re here to help you make the best decision for your business.
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