There are so many variables that go into choosing a credit card processing company to handle your credit card transactions. It’s not like the old days, when the merchant services industry wasn’t so competitive. Now that the field is flooded with new companies that have found new ways to process credit or debit card payments, it’s easier to find a rate that works best for your company.
Processing companies will go to great lengths to secure your business, including giving big discounts and extravagant customer service. However, you have to be shrewd (most small business owners are). After all, these companies are still looking to make a buck, so you need to know how to make the best decision when it comes to choosing a merchant service company. Here are a few tips that can help you save money with credit card processing companies.
Read the Contract!
Seriously. Read the contract all the way through. There are a lot of ways that these credit card processing companies can make a little extra cash, especially in the fine print. Many times this hard-to-read section of the contract will include small sign-up fees, cancellation fees and hidden monthly fees that the processing company hasn’t otherwise advertised. Sometimes the processing fees will go up after the first few months following the entry period, and if you're not careful, you'll be locked into a compounding fee structure for the duration of your contract.
Contracts to Avoid
Sometimes, credit card processing companies will have a minimum length contract. You want to avoid this because you don’t want to get locked into something you’ll need to change later on down the road. Perhaps you'll see a cheaper credit card processing rate six months down the road and you won't be able to make a change or use it as leverage against your current company. Make the credit card processing company earn your loyalty, rather than require it. Otherwise, you’ll be stuck with a company that can provide poor service without any repercussions.
Accept Mobile Payments
It’s hard to argue the benefits of this method of processing credit cards. For one, the devices needed for this method are far cheaper than using a traditional POS cash register. The traditional cash register can cost as much as $5,000, whereas accepting mobile payments only requires a smartphone or tablet as well as a device for swiping a credit or debit card. Then, you can download an application that will handle all of your processing needs. The fees associated with this method are usually cheaper, too. The popular Square credit card processing software charges a fee of 2.75% per transaction, which is the same fee that several others charge.
Don’t Use A Bank to Process Payments
Most of the time, a bank doesn’t handle its own merchant services. They’ll bring in a third party to do it, which means that they’re marking up the price in order to make anything off of the service. This also means that there is probably a cheaper rate out there, which can be found with the little hard work.
About the Author
Michelle Latham is a credit specialist and frequent blogger for Switch Commerce, a credit card processing provider based out of Texas.