For most merchants, their relationship with their payment processor is rocky at best, and parasitic at worst. Here are 5 reasons you may not be getting the most out of the relationship you have with your processor.
Payment Processing Fees
If you ever look at the monthly bill you receive from your current processor and think “this is too much” or “why am I paying for this?” you may be overpaying for some of the basic services offered by providers. For example, some processors will charge you PCI fees, PCI non-compliance fees, set-up/activation fees and a whopping cancellation fee if you try to exit your contract with them. In some cases, the combination of these costs can add up to anywhere in the range of $40-$100 per month, and that’s besides what you’re paying for processing!
You’re paying too much for processing
In the world of payment processing, there are a few different pricing structures employed by providers custom tailored per merchant account. Some, like flat-rate pricing, are simple to understand for merchants, but end up costing the merchant more (especially as your processing volume increases). Others, like tiered or differential pricing, are designed specifically to benefit the processor and take advantage of merchants who feel like there may not be another option out there for them.
The good news is, unicorns do exist in the payments industry, and there are a few providers that offer what’s known as Interchange Plus pricing.
Why Interchange Plus Pricing?
This model is wholly transparent and allows merchants to see clearly what their processors’ margin is. It passes the true cost of processing on to merchants and significantly reduces the cost of processing overall (especially as volume increases—as compared to flat rate pricing).
Your equipment is either outdated or ridiculously expensive
Some processors peddle exorbitant terminal leasing programs that result in merchants paying more for the terminal over the lifetime of the contract than they would have if they had just bought it outright in the first place. This is one of the most devious tricks employed by processors in an industry that has a reputation for shady practices and should be avoided at all costs.
In other cases, merchants might own their equipment, but paid a significant amount for it way back when, and don’t want to think about upgrading and the costs associated with it. This costly equipment also doesn’t just include terminals, but an expensive POS and POS software. These are often unnecessarily pricey and can give merchants buyers remorse when they think about the amount of money they’re going to need to bring in just to cover off this expense. As a merchant, you should look for somewhere that is going to offer you the best equipment possible at a reasonable price.
You’re not getting the support you need
Customer support is not just an added convenience. When it comes to payments, your customers want to be serviced efficiently, and their experiences with your business go a long way toward winning their loyalty. If one day, something goes wrong and you’re unable to provide them with the experience that keeps them coming back, you’re going to need answers and solutions immediately.
Some payment processors outsource their support to somewhere across the world, or charge you extra for it—others have none at all. The last thing you want is to have to send an email and wait a week for a response you needed yesterday. That’s why it’s important for your payment processor to have a dedicated team of experts that will help you solve problems as they happen. When it comes to building your business, having a
payment processor that cares about you and your customers can make all the difference.
Your toolbox is limited so choose wisely
When you started your business, what you needed from your payments processor might have been limited simply to accepting credit cards, but as any business grows, more tools are often necessary to help run it effectively. Some of these might include online invoicing if you’re a professional service, an online ordering platform if you’re a restaurant, or inventory management software if you’re in retail. So whether it’s a card reader that allows you to accept payments on the go, or a virtual terminal set up for recurring payments, you should be looking for the processor that offers you an all-in-one solution.