.svg)
.svg)
The use of credit and debit cards has exploded over the past couple of decades, accelerating even more last year as many people stopped using cash due to concerns about COVID-19. Eighty percent of consumers now say they prefer card payments over cash and just 10 percent of consumers say they make all of their purchases with cash, according to data compiled by Fundera.
So for many businesses today, it’s not a matter of whether they should accept credit and debit cards. Instead, the question is which merchant service provider should they choose to process their credit and debit card transactions?
There are many potential advantages to choosing the right merchant service provider, including access to the latest technology, responsive customer service and lower costs. Here are 4 things to look for as you decide which merchant service provider to choose.
1. Hardware and software that meet your business requirements — A wide range of different types of equipment and software is now available — from traditional wired point-of-sale (POS) terminals to wireless terminals and systems that combine a basic card reader with a smartphone to allow mobile card processing. Most retail stores still use traditional wired POS terminals while many service providers choose mobile systems that let them accept payments outside of a traditional retail store environment.
If yours is a traditional retail business, you could reap benefits by choosing a traditional wired POS terminal. These tend to be more reliable than wireless terminals and they’re more likely to support chip cards (EMV) and new card processing features such as contactless payments (e.g., Apple Pay and Android Pay). Many wired terminals are also more affordable today than in the past.
If you sell products or services outside of a traditional retail environment — like a plumber or electrician, for example — look for a merchant service provider that offers mobile card processing. Some traditional retailers are also choosing mobile processing systems to allow employees to accept card payments from anywhere in the store, not just at a single point of sale location.
2. Competitive and transparent merchant fees — Merchant fees can eat into profit margins so it’s important to shop around for the most competitive fees. As you shop, also look for transparency in the fees charged by merchant service providers.
Some providers offer a low processing rate but tack on lots of other fees that can increase your total merchant processing costs substantially. These may include monthly and annual fees, account setup fees, statement fees, early termination fees and fees for chargebacks that occur when a charge is reversed. Your merchant services agreement should clearly explain all fees in easy-to-understand language so you can make an apples-to-apples comparison of the total cost of different merchant service providers.
3. Outstanding service and support — Given the complexity of card processing and the fidgety nature of technology, there’s a chance you’ll experience challenges and maybe even some problems with your merchant processing equipment at some point. This is where service and support come into play.
Ask merchant service providers detailed questions about the level of service and support they provide. For example, will you have a dedicated account representative assigned to your business who is personally responsible for answering questions and resolving issues? How robust are the provider’s online support services (like FAQs and chat)? What about telephone and email support — are they available 24/7/365? Are service and support outsourced or does the provider handle it themselves inhouse?
4. Reasonable processing limits and funding times — Most merchant service providers have both minimum and maximum card processing thresholds. Processing limits are usually set per-transaction and per-month — for example, a $1,000/$10,000 limit would mean a cap of $1,000 on each card transaction and $10,000 in total card transactions each month. Make sure a processor’s limits are high enough to accommodate your anticipated card volume.
Also ask processors how long funds will be held from card sales until they’re released to your business. Specifically, ask them about their batch times — time-to-funding begins when you submit your batch. Slow transmission of funds from the processor to your bank account can put a crimp in your business’ cash flow.
Your merchant service provider will become an important business partner, so be diligent when choosing a provider. Carefully examine these and other factors to help ensure that you choose the right merchant service provider for your business.
.svg)
