1. Is my representative telling me the whole story?
It's sad to say, but credit card processors are notorious for leaving out all of the necessary information you need to make an educated decision when it comes to their proposals. Their sales pitch may seem like a great deal, but they may not be telling you about additional percentage rates for certain types of cards. Processors are also ill-famed for failing to list the catalogue of junk fees that accompany their contracts, catching the business owner unaware until the first few statements come in. An easy way to avoid this is to ask to see a sample statement from one of the processors current clients. They can protect the current clients private information while revealing what their charges will actually look like month to month on paper. Once you get the sample statement, ask as many questions as possible about everything on it that you do not understand. If the processors answers are too convoluted and couldn't be easily understood by an 8th grader, chances are, something is foul. If they refuse to provide a sample statement, give serious thought to looking elsewhere.
2. Do I fully understand what the processors profit margin will be?
With the many different pricing options available today due to heavy competition in the payment processing industry, there is no reason for any business owner to process credit cards without utilizing either a 'flat rate' or a "cost plus" processor. We say this simply for the argument of transparency. These two methods allow business owners to know exactly what they are paying for every card that comes across their counter and why they are paying it. Cost plus pricing allows the business owner to know their processors fully disclosed profit margin, for instance with the OGroup our profit margin is fully disclosed and comes in the form of a flat fixed fee. Flat rate credit card processing may not allow you to know the true profit margin for your pricing but it simplifies the fee structure so you can easily understand exactly what you will pay for every single transaction. If you don't hear one of these two methods being offered in the credit card processors sales pitch, then move on, or your going to be on the raw end of the deal.
3. Is the credit card processor underwritten by a credible bank?
A credit card processors essential function is to act as liaison between you and the major credit card issuers like Visa and Master Card. Since their is so much financial information being managed on any given day, the money from your customer that just bought that $350 appliance from your store can't be immediately transferred to your account. The credit card processor, through their underwriting bank, fronts that money to you either on the day of the transaction or the next day. Through a monthly batching of your businesses swiped credit cards, the processor collects what they are owed from those customers at the end of the month. A good processor gets you your money on time and they themselves wait to get paid. That's essentially the service you are paying for when it comes to credit card processing. If you're dealing with a merchant service provider that can't get money into your account within 1-2 days of the transaction, they're not worth your time.
4. What does exceptional customer service from a credit card processing look like?
We all know this truth: The bigger the company, the more machines and red tape you will have to trudge through in order to get the information you need to keep your business running smoothly. Who has time for that? There is so much competition out there for your business that there is no reason you should accept any proposal from a credit card processor if they cannot provide you with a 24/7 support line AND the direct line of your merchant services representative. If something goes wrong with your card swiper, or problems, like frozen funds, arise with your account, you should have solutions immediately. You work hard to keep your business running, so why should you accept anything less?
Having a difficult time finding a processor that satisfies all of these questions with integrity? Let us help.