There are plenty of merchant account providers out there to choose from, making it a difficult task deciding which one is right for you. Different business models require different considerations to ensure that payments are optimized and payment processing costs remain low.
Working with a trusted merchant account provider can help a business streamline payments for customers without breaking the bank. The key is finding the right fit, not only in price, but in an advisory capacity as well.
Here’s what you should consider when evaluating merchant account providers.
Consider Fee Structure
There are several different types of payment processing rates offered by merchant account providers. Interchange plus pricing represents the interchange rate that payment processors pay for each transaction plus a markup. In this way, payment processors pass along the fees they pay plus an additional markup to the merchant. The markup will vary among merchant account providers, so it’s important to look for a rate that is reasonable for your business.
Other pricing structures include tiered pricing and blended pricing. Each type of pricing has different considerations so it’s important for merchants to do their homework, ask questions, and consider any other fees that may be insured before signing on with a merchant account provider.
Additional fees to consider include application fees, per-transaction fees, monthly minimums that affect your fees, voice verification charges, address verification fees, statement fees and more. Most merchant account providers will be flexible in terms of how they present your proposal, which could result in a lower discount rate with a higher per-transaction fee if your average ticket price is on the low side but your transaction volume is high.
Consider the Equipment
You should also pay heed to how much your merchant account provider is charging you for the equipment and the software to process your transactions. The price of equipment can vary in cost among multiple processors by hundreds of dollars, even for the same piece of equipment.
Some merchant account providers may offer the option to purchase equipment outright or to purchase term-contract with the equipment. Each options has different benefits and drawbacks, depending on the needs of your business, so be sure to get clarity around the pricing and features of each before signing a contract. Make sure you research the equipment and software you’re using as well; a good merchant account provider will be able to answer your questions and make recommendations in terms of the best equipment fit for your business.
Choose a Dedicated Your Merchant Account Provider
Take note of how hands-on a merchant account provider is during the application process. Some merchant account providers simply offer merchant accounts, pending a successful application. Other merchant account providers provide additional benefits and act as a trusted advisor in dealing with everything from chargeback management to fraud prevention and more.
The response time of your merchant account provider matters a lot too as it can affect your business’ customer service levels. Consider whether or not the merchant account provider is available 24/7 or if there will be long wait times to get a hold of someone who can help. Is the merchant account provider knowledgeable in all areas of payment processing or can they only help answer questions about certain things?You know your business better than anyone else, but it can be helpful to retain a merchant account provider that is invested in learning your business and helping to optimize payments.
Reputation and Communication Matter, Too
When choosing a provider, listen to what they have to say and focus on the level of detail they’re providing you with from the start.
Your merchant account provider should keep you informed of any changes in their policies, new laws that affect credit card practices and promotions that can help you save money. Ask about their communication with you and how these would work, as well as what features and services they offer.
When evaluating merchant account providers, look at each option holistically. While rates are important, they should not be the only measuring stick when it comes to finding a trusted partner. Look at quality and speed of their services, rates and fees, and level of customer service. You want to strike that perfect balance between experience, quality and affordability that very few providers can actually offer. The best merchant account providers will understand nuanced business models and be able to offer sound advice on the best way to streamline payments.
