Choosing the right credit card processor can be a stressful decision for any business. After all, it can dictate a lot about your business going forward. Therefore, you want to do your research to identify the right processing company to go with. There are so many to choose from, it can be very easy to make mistakes. In this article, we will be going over some of the top credit card processing mistakes that you will want to avoid making.
1.Don’t Deny Credit Card Users
A lot of small business owners might think that it makes sense to avoid accepting credit cards at all due to the high fees associated with it. While it might sound like a good way to save money, it is not the route to go as a business in today’s marketplace. Businesses that fail to accept credit cards as a method of payment miss out on a lot of sales every single year. After all, a majority of consumers now utilize credit cards as their preferred and primary form of payment. Because of this, you will be selling your business short by avoiding credit card processing altogether. In fact, the Federal Reserve estimates that small businesses that fail to accept credit cards as a form of payment miss out on up to $7,000 annually.
2.Look Closely At The Terms
When you are shopping for a merchant processor, the biggest thing that you want to avoid doing is getting stuck in a complicated pricing scheme. This is especially true when it comes to bundled pricing. A lot of merchant processors might try to get you into a bundled pricing structure which bundles together all of the different rates associated with the various credit cards into a simple rate that is easy to identify, calculate, and follow. While this might sound convenient, you will be paying dearly for it.
There are simply too many negatives associated with this type of bundled and simplified pricing strategy to be ignored. With this type of pricing structure, you are never going to be able to identify or know what fees are being charged on the back-end which will cause you to be completely unaware of how much you are being overcharged by the processor. By avoiding this altogether, you will be able to see a much more transparent listing of all of the associated fees for each credit card transaction which is going to give you much more peace of mind knowing you are not being overcharged and that you are paying the proper fees.
3.Do Not Lease
Similar to other types of services, you want to avoid leasing the hardware associated with the merchant processing. While credit card processing companies will surely look to get you into a leasing agreement, it is something that you want to avoid entirely because you will end up losing in the end. A lot of the merchant processors will try to convince you that it is a much better idea to lease than to purchase outright because they are going to replace the hardware for you if it fails and so forth.
While it might seem as if it’s a good deal and you will be saving a decent amount of money upfront not having to shell out a lot of money at the very beginning stages, you are going to end up losing over the long haul. After all, you will be paying a monthly fee to lease the machine which you will not own at the end of the agreement. Instead, you can simply buy the machine outright and you will effectively own it and avoid having to add monthly fees on top of your other operational business costs which you are paying to run your business. Therefore, if ever needed, you will be able to sell the machine and bring back some money to offset the cost. It is always a better idea to own the machine outright rather than lease it.
4.Don’t Just Look At Rates
While it might seem tempting to look at rates and pick the merchant processor such as www.highrisk.solutions with the lowest upfront rates, things are not always as they may seem in the merchant processor industry. Believe it or not, often the merchant processors that have the lowest rate end up being the most expensive in total. The amount that you end up paying in credit card processing fees is almost always going to be much more than the low rate that you were quoted. The low rate is primarily there to get you to sign up through low rate incentives.
The credit card processors utilize this type of ‘bait and switch tactic when signing up clients to the best of their ability.
They typically only apply the low rate to a small portion of the transactions. They are able to get away with this by disclosing the facts in their terms which they know and understand a low of small and medium-sized business owners never even read.
Overall, there are plenty of mistakes that you are going to want to avoid when you are looking to sign up with a credit card processor. By following the tips above, you should be able to effectively maneuver your way through the field and figure out what credit card processing company to go with. Always look at the different processing companies as a whole and see what the true rates are. Don’t simply go for the rates they quote you. Instead, look at the terms and see how much you will be paying based on your specific business factors including the number of transactions you make and more.
Also, you want to avoid leasing any machines that they might be offering as it is never a wise business tactic. Instead, you should spend the money upfront to purchase the credit card processing machines outright to avoid adding to your monthly operational expenses. Doing all of this should help you pick out the right processing company to choose.