For businesses, the question is not whether to accept credit cards but how to do so in the most cost-efficient and effective way. Signing up with a merchant services provider like TransFirst® to process your credit card transactions is a big step, so it’s important to ask the right questions beforehand so you’re not stuck with a contract that really doesn’t work for you.
Credit card processing costs are an important consideration for most merchants. They break down into several categories:
- Start-up costs include application fees and/or programming fees. You should be provided a complete list of these costs and an explanation for each. You may be able to negotiate to lower or eliminate some of them completely, or you may be able to take advantage of a special offer from the provider.
- Equipment costs cover the hardware and/or software needed to collect the credit card information needed for processing. These can run from several hundred dollars to thousands of dollars, depending on the type of credit card processing you plan to do. There are two basic options: buying or leasing. Discuss both with the processor to determine which makes the most sense (and cents) for your specific situation.
- Assorted rates and fees charged by the merchant services provider. These include (but are not limited to) the discount rate (paid by merchants to credit card processors as a fee associated with accepting general-use credit cards like Visa® and MasterCard®), interchange fee (a portion of the discount rate that’s set by the credit card associations and passed along by the processor to the issuing banks), batch processing fee (charged for settling a batch of transactions at the end of each day) and transaction fee (also called a swipe fee because it’s charged each and every time a merchant swipes a credit card through a terminal).
Another factor of key importance to merchants who accept credit cards — but one they often forget to ask about — is customer service and support. Let’s face it: Technology is great right up until it isn’t. If you experience a credit card processing system or equipment failure, you can’t accept credit cards until the problem is fixed. That’s why you want a reputable merchant service provider like TransFirst working for you to make sure your downtime is as limited as possible.
Specific credit card processing options are another issue you should discuss with a potential merchant services provider. Most offer traditional POS retail solutions, which are fine if your business is limited to a brick-and-mortar location. However, many merchants today have diversified, expanding onto the Internet or going mobile in their local community or region. If you’re among them, you’ll need some specific options like online credit card processing, mobile credit card processing or wireless credit card processing. Not all merchant services providers offer all processing solutions, so be sure to ask up front.
Finally, before you sign on with a credit card processor, make sure you go over the contract with your sales rep. Understand what you are signing; after all, it is a legal document that ties you to this provider for a set period of time, most likely years. Ask about opportunities to upgrade your system if the scope of your business changes over the course of the contract. And be sure to ask about termination fees, which some providers charge if you end the contract ahead of schedule.
As with most business decisions, choosing the right merchant services provider for your needs is a process that shouldn’t be rushed. Take your time, ask lots of questions and make an informed decision before signing on the dotted line.
TransFirst, LLC is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA, and Synovus Bank, Columbus, GA, for Visa and MasterCard transactions only.