Securing the Lowest Possible Credit Card Processing Costs

Securing the Lowest Possible Credit Card Processing Costs

The Following is Our Advice for Securing the Best Deal for Your Business:

  • Avoid Worrying About Rates – Focus on Cost

As mentioned above, the merchant service providers are very experienced at marketing to small business owners. So they try and grab your attention by advertising the “lowest rates” available. Many even offer available rates on their websites’, and you’ve likely seen banners offering “Rates as Low as X.YZ%”. This approach from a small businesses owners perspective is very effective, compare rates, find the lowest, sign up. While an effective marketing tool, it is exactly the type of trap that leads to businesses far overpaying on their processing costs.

The reason for this is that the processor’s advertised rate only applies to a single card and transaction type. Visa or Mastercard, Business or Personal, High Risk or Rewards, each card type is unique and has its own rates; which rate is determined by the transaction type, was the card swiped or keyed in, does the business keep receipts, are the transactions handled online? Each of these impacts the type of rate the processor can offer.

This is a long explanation for why focusing on rates is a trap that many business owners fall into, when what they really need to look at is overall cost. This is not easy, but a trained and qualified sales representative should be able to understand your business, the type of transactions and typical card types the business will see. They can then craft a merchant account that fits the business and has the lowest overall cost.

  • At All Costs Avoid Specified Length/Term Contracts

One of the most frustrating parts of the merchant account industry is the use of contracts. Many processors have standard 3 year contracts with hefty cancellation costs. These contracts have no place in the industry, yet have somehow become the norm. Worse yet is that some processors are actually devious enough to have no “cancellation” fee, but do have an “early termination” fee, or perhaps a clause that entitles them to a monthly minimum payment each month through the remainder of the contract. Avoid contracts at all cost.

  • Customer Support and Service

Often this is one of the most overlooked items when comparing merchant service providers. Many small business owners assume that if they have a problem the processor will “just take care of it”. Unfortunately these are exactly the types of assumptions that have made this industry so reviled, as those same merchants find out very quickly that not all credit card processors are created equal. Many processors are small operations, maybe even a single sales rep working out of his basement. Customer Service is outsourced to the cheapest bid, with the hope that issues will not arise, and even if they do when the merchant is signed into a 3 year contract, what is the penalty to having a poor customer service experience.

  • Level of Trust

You are entrusting one of the most critical aspects of your business to a third party. It is a relationship that you need to trust in, and to do so you need to trust that you are working with a processor that realizes their success is dependent on your success. The higher your profits the more you can invest in your business, which in turn will lead to more sales and processing in the future. While difficult to quantify in a phone call, one of the best measuring sticks you can use is the level of knowledge the individual you are speaking with has about your business and credit card processing. As noted there are so many factors that go into setting an account up correctly, any call that does not involve the processor learning more about your business, the type of cards you will see, and the ways you will processing credit cards is not one to put much trust in.

We hope that this guide on what to look for, and look out for, can help you find the merchant processor that with best fit your specific needs. Each business is unique and finding the best merchant account for your business is not a cookie cutter process, by asking the right questions you can put yourself in a great position for success.

We here at have also attempted to grade many of the top and most popular credit card processing companies on the market today. Our full list of reviews is available here, each has been graded on their standard rates, any dues/fees typically assessed to merchants, along with the customer service offered and any contract/cancellation fee concerns. Please use these ratings as a guide, but most importantly make sure you feel comfortable with the company you speak with. If you are not being asked the right questions, or the answers to your questions are not what you expect to hear, try someone else! Ideally finding a merchant account provider will be a one time process for you; set your account up with the right processor and with very little maintenance you will be happy with the results, while rushing through the process quickly or comparing rates through emails means risking potentially thousands of dollars a year. Good luck and please let us know if we can help in any other way.

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SMB Reviews
SMB Reviews 473 posts

SMBReviews is committed to providing small and mid-sized business owners with the information and resources they need to select the best service or product for their company.

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