CEO, National Retail Solutions (NRS). NRS POS, NRS DIGITAL MEDIA, NRS PAY, NRS FUNDING and NRS PETRO: Helping independent retailers succeed.
In recent decades, it has become more common to rely on electronic methods for payment. Paying with cash is a rarity and is usually seen as an inconvenience. Therefore, trying to avoid processing companies would cause more harm than good. This is why it is important to pick the one that works best for your business. Doing research before committing to a processing company can save you time, money and stress. In this article, I’ll present a few factors that merchants must look into before selecting a credit card processing company.
The first aspect most merchants look into with processing companies is the transaction fees. Each time a customer uses a card in the store, it costs the business owner money. In the United States, consumers are moving away from cash transactions. Instead, they prefer to use debit and credit cards or touchless transactions when shopping. Each time a customer uses a card, the merchant is charged a transaction fee, which is how processing companies make money. Therefore, it’s important to know what the transaction fee is before signing a contract with a processing company.
These fees can vary, though the average is between 1.5% to 3.5% per transaction. Nevertheless, they add up over time and can cause a dip in the merchant’s profits. Furthermore, these fees are more damaging to small businesses because their larger counterparts have opportunities to make deals that they can’t. So it’s also important for merchants to stay up to date with processing companies’ partnerships and policies.
Let’s imagine a scenario. A merchant of a small coffee shop is looking for a better way to integrate electronic payments for their customers. They receive a call from a processing company that offers them a seemingly great deal. Instead of researching the company, they accept the offer. A few months later, they realize they made the wrong decision. They have been losing money, experiencing many technical issues and engaging with terrible customer service. The merchant decides to end its partnership with the processing company. But when they look into the contract, they realize that if they end it early, it will cost them a fortune. So they’re forced to either stay with the company or pay a high cancellation fee.
To avoid cancellation fee issues, consider asking other merchants, reading reviews and closely looking over your contracts are all important before committing to a processing company. Hiring someone to read a contract for you could be beneficial. Finally, it is important to compare different companies before selecting one.
Lack Of Transparency
The above example represents another factor merchants must consider: whether the processing company they’re considering is transparent about its operations. Some are known for hiding their processing rates, changing costs within similar companies and hiding aspects of their policies until after the merchant has signed a contract. This is a struggle that hits smaller businesses the most because they don’t have the resources that larger merchants do. Small merchants often do not have a team of lawyers ready to aid their every decision.
Nevertheless, even though these practices are common, merchants can avoid falling victim to them. Researching a variety of processing companies can save you from future trouble. It’s also important to stick up for yourself and your business. Some processing companies get away with their dishonest practices because merchants don’t speak up. So, be sure to do your research and negotiate contracts instead of taking the first deal offered.
Finally, it’s important to recognize your different wants and needs when it comes to processing companies. For example, you may want the ability to accept a range of payments, such as Apple Pay, greater fraud protection or the option of mobility. Not every processing company can offer what you’re looking for, so it’s vital to know your standards to make the best decision for your business.
Regardless of what a merchant is looking for, research can greatly benefit them. It will help them figure out what a processing company thrives in and what they lack. Nevertheless, it can still be beneficial to check in with other merchants about processing companies!
Doing research before choosing a credit card processing company can lead to a long, successful relationship with a trustworthy provider. There are many processing companies to choose from, but it’s not impossible to find reliable ones. As long as you do the proper research, you’ll be able to make these critical, informed decisions.
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