When you are ready to accept credit card payments, the first crucial step is choosing the right merchant account partner. Take note that not all companies that offer merchant account and processing services are reliable. Choosing the wrong credit card processor may cost you a lot more on processing fees than what you deserve. Below you will find 2 of the most common credit card merchant processing mistakes made by small businesses.
How To Avoid Credit Card Merchant Processing Mistakes
In this article, let’s discuss two essential issues that you need to consider to avoid getting ripped-off by unscrupulous and deceptive credit card processors.
Watch out the cancellation fee!
Some processors are completely unreliable but you may not know that until you’ve already signed for their service. To discourage a client from switching to another provider, some companies may charge an excessive penalty if you cancel your account.
The cancellation fee may cost you $200 or even thousands of dollars. Hence, a small business owner may be forced to stay with the same provider to avoid paying an unreasonable fee, despite unsatisfactory service.
A credit card merchant processing company that guarantees good service should be confident that a customer will not feel inclined to terminate the account. Imposing an excessive cancellation fee need not be necessary. In fact, you should request the sales representative to have the cancellation fee waived and have it stipulated in your contract.
A representative of a reputable processing company is most likely to waive the fee without hesitation. Before signing up, see to it that you can easily find your way out without having to pay a high price.
Compare merchant account companies.
Typically, the discount rate for retail credit card processing is cheaper than other processing types. Retail processing applies to transactions where the actual credit card is presented and swiped into the terminal. Meanwhile, online credit card processing and MOTO (Mail Order Telephone Order) credit card processing may have a higher discount rate than retail.
Spend time comparing quotes from at least three or more credit card processing companies. This way, you’ll have a better idea about the pricing of services. Keep in mind that there are different types of merchant services and the discount rate and fees may vary for each type.
You need to understand which particular processing service you need for your own business and be sure that the quote you are given correctly applies to that service.
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About the Author:
Melanie James, an Entrepreneur and writer. Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.