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Tuesday , September , 26 2023

5 Things Every Merchant Needs to Know

In choosing a credit card processor, every merchant , large or small,

may benefit by following a few steps in order to avoid costly mistakes that can take years to correct.


Never sign anything on the initial contact with a sales rep or with someone on the phone.

You might be surprised at how many businesses do just that only to find out latter that they have locked themselves into contracts that cost several hundred if not thousands of dollars to get out of. Some processors teach their reps use hard sell tactics and high pressure to try and sell you on the first visit. The easiest tactic is for the rep in front of you to say "Let me get my manager on the phone to speak with you." Trust me when I say that you are in for some high pressure sales pitch for you to sign right there and then. Just ask them to leave you a copy of the agreement so that you can look it over. If they refuse, show them the door. It is not a company that you want to do business with.


Ask a lot of questions.

The main questions that you should ask are: "What is the length of the contract?" "Are there any Early Termination Fees and if there are, what are they?" "Do you have any references of businesses in my area that have your service and could I get the names to contact them?" "Are there any fees that we have not covered that I need to know about?" The list of questions can go on but, the more questions you ask upfront, the better prepared you are to understand what you may be getting your business into.


Do not play the "Rate Game".

"What is your rate?" I have heard this one a thousand times if not several thousand times before. Reps generally smile when they hear this question. It means that the person in front of them really doesn't know or understand credit card processing at all. The merchant is under the belief that all they pay is just one rate and nothing else. Most reps will answer that question with the question, "What are you paying now?" I will guarantee you that if the merchant gives a half way believable answer like,"I pay 1.89%" the rep will come back with a lower rate. Really hate to break it to you but all cards are not created equally. There are different rates for different cards. Some companies use the one rate fits all. Those typically have a much higher rate than the industry average and use the theory that most of the cards presented at your business normally qualify for much lower rates and that you may only take a few that don't. They more than make up the difference on costs. While rates are an important part of processing, there many more fees that comes into play. Transaction Fees, Regulatory Fees, Statement Fees, PCI Fees, Reporting Fees, etc. These fees all impact the cost of processing each month. The better question and the smart question the merchant should ask is, "What is the overall cost each month in doing business with you?" This question puts you in control of the conversation and leaves about 75% of reps scrambling for an answer.


Do a little research.

A couple of keystrokes could end up saving you a lot of money. Look up the company that you are talking with on the internet. No, not their website like the one you're on now. Check for reviews and complaints. I always compare it to buying a car. You get a new car with a good deal that runs great and you may tell two or three people about it. Overpay to buy a lemon of a car and you will tell the whole world about it. Most companies may have a knock or two on them because you cannot make everyone happy. However, there are some out there that have numerous complaints against them. Some have even gone so far as to change their name every few months to spread around the complaints. Avoid those at all costs. Check with the Better Business Bureau or other review sites to find out who you are dealing with.


If you are completely happy with your current processor, stay with them.

Nothing says that you have to switch because someone is promising something they haven't delivered on yet.

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