Credit Card Processing: A Guide to picking a processor that will help you.
In choosing a credit card processing company, there are many considerations and factors to consider. Do not attempt to do this alone, or without the advice of someone in the industry who knows what they are doing/understands. Its typical that merchants get set up by processing companies that do not have the best interest of the merchant at heart. This is seen in many situations where a credit card processing company hires sales reps on a commission structure to sell merchant processing/ credit card processing services to customers. If a merchant is set up this way, its most likely beneficial to the sales rep over the merchant processing the credit cards.
How do you avoid this? Approach your local bank, however, ask if they outsource the credit card processing or do it in the house. Banks tend to outsource this processing of credit cards to sales negotiable negotiable negotiable have high turn-over, thus giving you a rep who isn’t looking out for your best interest. On the other hand, its somewhat better; because now you have a point of contact when a problem/fee arises on your statement that you didn’t know was going to be there. Rates often change , so its typical for processors to add fees to your account to offset the fees, and gain higher residual profit.
Picking a processor
What is the best way to select a processor? Ask a friend who owns a company or do your research. Its important to understand the difference in pricing models for credit card processing. Some processors will charge interchange, and others tiered rates; as previously mentioned in our blog. Make sure you know how you are set up, so you know what you are paying. This factor is critical in determining a start to understanding your rates for processing credit cards. Furthermore, you must understand that you are not safe just because you have interchange pricing, but you are at a start to being safe.
What are other measures to make sure you are safe in credit card processing; so you aren’t being ripped off? Well, this is a complex question, so we’ll try and give a simple answer; as best as we can, in regards to merchant services. Credit card processing and merchant acceptance for credit cards is charged based on rates of the interchange. After you pay a surplus above the interchange rate, you will notice misc. Fee’s that are tacked on monthly, and sometimes annually. We’ll break down the monthly common fees, which are negotiable, and touch on the annual fees you may see later on your credit card processing statement from your merchant services provider.
Monthly, you will see fees called: Statement fee, batch fee, monthly minimum, and on file fee; Along with PCI fee, and other misc fees that are listed. The true cost of merchant services is around $6.00 to keep an account open (on file), so we’ll need to make sure that monthly you are not paying too much over that; if no cards are ran. This can add up though, however, to much more if priced high, and can be very dangerous and costly to the merchant for processing credit cards.
Picking a processor with least fees
The last thing to touch on is the annual fee, or fee that is charged annually. This is a big part of the problem merchants see when processing credit cards. The reason they see such issues is because they are never told about a fee annually, and this could be related to the PCI Fee, or Annual Fee and cost to keep accounts open. This fee captures extra profit for the merchant processing company to allow for additional profits to be spread throughout the account and give a buffer on the annual residual the account pays out. This fee is very high typically around $100.00 on average and ranging up to $500.00 on some cases, but rare. You want to ensure you are not overpaying for merchant services and credit card processing in this area, and make sure that an annual fee is set and is fare. In a lot of cases, and in the cases with Centurion Payment Services, we’re always looking to avoid an annual fee at all costs, in addition to giving you the best credit card processing rates monthly as well, and lowest monthly fees.