Changing Your Credit Card Processor? Ask These 8 Questions.

Credit and debit cards are ubiquitous these days for purchasing power. More than one generation doesn’t carry checks or cash anymore, and with the majority of shopping done online, every business has to understand how they will get paid. Using a credit card processor is an absolute necessity, but the service can be costly.

As you shop around, and shop around you must, get into the nitty-gritty of how each prospective processor can improve your offerings. From easy transactions to low fees to online gateways, educate yourself and ask lots of questions to ensure the smoothest financial transactions for you and for your customers. 

1. What are all the costs? All of them. A low rate may be accurate, but insidious fees creep into the contract with some processors. Check daily vs. monthly discounting (avoid the former), assessments, surcharge, and one-time fees for credit and installation. Forgo the “platinum” type accounts; instead, negotiate for a solid, consistent rate and fee structure that is easy to reconcile. And check on a contract cancellation fee. You should be able to leave any vendor without penalty.

2. What are your primary markets? It is better to choose a processor who has a working knowledge of your type of business—from hospitality to medical services, transportation to e-commerce. When they understand your market, they will have more resources and understanding about your needs. 

3.  Do you offer EMV-compliant processing and fraud protection? These days, EMV (Europay, Mastercard, Visa) compliance should be automatic, but you must be sure. If you choose not to offer it, your customers will not be happy, and you will be responsible for any fraudulent activity. And while we’re at it, your processor should also provide encryption and meet PCI compliance minimums. 

4. What are my pricing options? Credit card processors should provide pricing options including flat-rate, tiered and interchange-plus. These can be a bit confusing, but if they know your market and can evaluate past transactions, a good processor will compare each type and suggest the best deal for you. Also, ask about ways to reduce the cost of each transaction. 

5. Is it truly next-day payment? Credit card processors with any credibility do pay the next day, but often, there are exceptions. American Express may get held up while Visa and Mastercard flow easily. For small businesses, cash flow matters, so be sure of how each type of card is processed and ask about situations that could delay any payment. 

6. Is your system compatible with online sales? The payment gateway that connects a buyer’s shopping cart and processor must connect. Proprietary software might not work, so ensure that the software meets the needs of every purchase location (phone, in-store, online). 

7. Can I buy the terminal? Leasing fees are a profit center for processing companies. For a bit more initial payout, you can probably purchase terminals and save money overall. When you do buy, be sure the terminals are useable with other processors should you change your mind and cancel your agreement. 

8. Are account and technical assistance available 24/7? The answer must be yes. No exceptions here. When someone is trying to give you money, you must be able to solve issues right away. Likewise, real-time account access is expected—you should be able to see all reports and transactions at any time with fully transparent details. 

Credit card fees and the effects of a poor agreement add up. Choosing a credit card processor who is a true partner in your success is critical. Be sure to ask questions to fully understand the services provided and how credit card processors charge for their service.

Author Profile Jon Forknell is the Vice President and General Manager of Atlas Business Solutions, Inc., a software marketing company specializing in employee scheduling software, including ScheduleBase employee scheduling software, and other business software solutions. In the past, Jon has been recognized by the U.S. Small Business Administration as a SBA Young Entrepreneur of the Year. Atlas Business Solutions was named as one of Software Magazine’s Top 500 Software Companies in 2004 through 2007, and 2010, 2013, 2014, 2016, 2017, and 2018.