How to Choose a Credit Card Processing Company for Your Small Business

How to Choose a Credit Card Processing Company for Your Small Business
How to Choose a Credit Card Processing Company for Your Small Business

As a small business owner, it can be tempting to choose not to accept credit and debit card payments. Accepting card payments can mean opening yourself up to the risk of fraud and charge backs due to customer disputes. But if you’re a small business owner who’s not accepting credit or debit card payments, you’re at a disadvantage; plenty of people don’t even carry cash anymore, and almost half of those who do say they carry less than $20 cash at any given time.

So, you’ll need to accept credit and debit card payments, and that means you’ll need to choose a payment processing company. But choosing a payment processor can be overwhelming. There are so many factors to consider, like fees, equipment, payment method coverage, and more. Here’s what you need to know to make the right decision for your business:

Consider the Costs

Fees for credit card processing can vary widely, and can even differ depending on the specific type of card being processed, the type of transaction, and the size of the transaction. You might pay larger fee for purchases made through your business’s web store, and a lower fee for transactions processed at your point-of-sale (POS) terminal, because of the decreased risk of fraud for card-present, POS transactions. Some card processors charge a monthly service fee, while some charge a per-transaction fee; others may charge both. Look for a processing company that charges a fixed flat fee; this will protect you from paying different rates to process different types of cards.

However, transaction and service fees aren’t the only fees you might have to pay. Other fees to watch out for include:

  • Early termination fees
  • Monthly minimum fees
  • Monthly statement fees
  • Monthly gateway access fees
  • Compliance fees
  • Application fees
  • Setup fees.

You shouldn’t pay more than $200 a year for these additional fees, or more than $300 if you’re running an online storefront. If you end up going with a provider that charges a per-transaction fee instead of a monthly service fee, keep a close eye on what you’re paying. Those per-transaction fees can add up, and if you’re paying for a large volume of card transactions, it may end up being cheaper to switch to a provider that charges a monthly flat fee.

But Also Consider the Customer Service

When you’re shopping for a card processing company, it can be easy to get caught up in the costs of such a service and forget that sometimes, you get what you pay for, even when it comes to merchant services. The cheapest credit card processor you can find might be great, right up until you have a problem with a transaction, with your equipment, or with your software and need to speak to a customer service representative. Then, you find out that you can’t get a single human being on the line to talk to about your problem.

Before you choose a card processing company, call up the companies you’re considering. You want a company that will offer you support, preferably from a human representative, 24 hours a day. Just reaching out to companies should give you an idea of how easy it will be to get customer service, and once you’ve reached someone at the company, you can ask further questions.

Don’t Overpay for Equipment

Plenty of small business owners using their first merchant services accounts get taken advantage of when it comes to equipment, like card readers. Some services offer these for free. Others charge fees ranging from less than $100 to more than $600, and still others charge steep monthly rental fees. Don’t pay to lease a terminal; you can probably buy the same terminal for a fraction of the cost of a yearly lease. If you buy a new credit card terminal, try to get one that you’ll be able to keep using if you switch merchant services providers.

Look for Interoperability and Payment Methods Support

You want an interoperable system, one that’s compatible with your POS system. Some merchant services providers offer POS software that will integrate with your system, while others offer a range of compatible partner options. You might want to add invoicing, bookkeeping, reporting, and other functions beyond mere payment processing to your POS and processing systems, so keep that in mind when shopping for service providers.

It might also be worth looking for a payment processing system that will make it easy to connect to other services, like Shopify or Intuit. Consider, also, whether you want to offer your customers the option to pay with methods other than cards, like Apple Pay or Google Wallet.

Make Sure Security Is a Priority

Fortunately for small business owners, most credit card processors are familiar with security concerns facing the card processing industry, and they build security features into their services. Get a card reader that handles EMV chips, and make sure that your processing company also uses tokenization and encryption. Protect your POS from malware to keep customers’ card information safe. If you want to sell items online, make sure that processor you choose offers CVV2 verification and SSL certificates. Finally, ensure that any processor you use complies with Payment Card Industry Data Security Standard (PCI-DSS) regulations.

Choosing a credit card payment processing company can be a daunting task, but as long as you know what to look for, you’ll soon find a company that can help you offer your customers the payment options they need – at a price that’s great for your bottom line.