3 Questions to Ask Payment Processing Providers Before Signing on the Dotted Line
No matter the type of business you run in this day and age, if you accept credit and debit card payments (the most popular choice of payment for consumers), then it’s definitely a good idea to use a payment processing provider to ensure transactions are handled securely and on the spot. These systems are generally quick and simple to set up, and can be up and running in just a day or two.
However, while it’s cheaper and easier than ever to find a top merchant services company to accept card payments online or through an app or other tech-driven device, it can be difficult to know who to go with. There are dozens of different firms providing these services, and at first glance they can all appear quite similar. This is where doing your research and knowing the right kind of questions to ask can really come in handy. Read on for three questions you should put to payment processing providers today before you sign on the dotted line.
1. What Is the Payment Structure?
The first thing to be very clear about before choosing a merchant services firm is what their pricing structure is. Keep in mind that companies can charge in different ways, and for different things. For example, some providers will charge a startup fee in order to get your account set up in their system, while others do this for no cost.
As well, some businesses operate under a fee-per-transaction structure, whereby you may be charged a certain percentage rate on each transaction; while others have a minimum monthly payment amount plus additional charges for extra transactions. Alternatively, many payment processing firms also have different levels of fees that are calculated according to the number of transactions processed per month, with cheaper rates per payment if you achieve a certain volume of sales. Note that not all providers necessarily advertise that they can offer volume discount options if you hit certain targets, so it pays to ask about this upfront to see if you can negotiate the best rate.
Another payment-related area to look into is how long each merchant services company takes to give clients access to cleared funds. This is important to note as, if you have to wait seven or even more days until funds are transferred to your bank account, this can quite substantially affect your cashflow. Sometimes this term can be negotiated too though, so it’s worthwhile asking about it sooner rather than later.
2. Are There Any Early Termination or Other Hidden Fees?
Sometimes payment processing firms can seem to be offering the best prices on the market, but actually aren’t as cheap as they seem when you factor in some hidden costs. For example, some businesses expect you to commit to a yearly (or even longer) service when you sign up, and then will charge a steep cancellation fee if you decide to cease the service earlier. Make sure you read a contract through carefully for this type of charge before you sign.
Furthermore, there can be other potential fees involved that make overall costs higher than they first appear. These can include extra charges to accept some forms of payment (such as debit cards, or Amex or Diners credit cards); withdrawal fees for each balance transfer to your bank account; and costs for integrating the payment processing system with your particular e-commerce checkout or device. In addition, some companies can also add on charges for customer support, if you need to phone, email, or Live Chat with a company representative to get an issue resolved.
In this day and age, digital security is an incredibly important factor when you trade online. Hackers across the globe continually come up with more and more sophisticated ways to break into websites and access point-of-sale data, and as a result it can be tough to keep customer credit and debit card information safe from prying eyes. One way to increase your security level is to ensure that you only sign up with a payment processing firm who takes security seriously.
When selecting a provider, make sure you find out all the details about their level of security. Adequate systems will have things in place such as CVV2 verification; data encryption on all transactions; support for all higher-level SSL certificates; and security to cover the billing addresses that customers provide when they complete a transaction.
Top systems also usually take some additional precautions such as using more intricate encryption algorithms that are very difficult to hack, and placing tougher restrictions on how data is sent via the Internet, and also how it is stored.