Merchant Services: 5 Tips for Choosing the Right Provider
Trying to select a merchant services provider can be an overwhelming experience. With so many providers out there, who do you choose? Read these 5 tips for choosing the right provider.
A quick web search will reveal that there are tons of merchant accounts available from a copious amount of providers. It’s very important to do research. Not all companies are created equal. Don’t just select a company simply because they offer merchant account services.
1. Stay Away From Banks
When making your selection, it’s best to stick with true merchant account providers rather than banks. There aren’t really any advantages to using your bank. We live in an online age. Most banks lack the latest computer technology to provide top-notch merchant account services, particularly when it comes to ecommerce and wireless activity. An interesting note: nearly all banks that offer merchant services actually outsource everything to a bona fide merchant account provider. Considering this, now which option do you think is best, a bank or a merchant account provider?
2. Ask Questions
The savvy business owner always asks many, many questions. This should always be done when choosing a merchant account provider. Consider these points.
- How is their track record? A great way to find the answer to this question is through the Better Business Bureau. Any company that has a record filled with complaints should be quickly dismissed. You don’t need that headache, no matter what they promise you.
- How is their customer service? Does the company have a toll-free number available for customer service concerns? What are the hours of the customer service department? Make sure they’re frequently available to address any concerns or questions you might have.
3. Know Your Fees
This is a very important point. Different companies have different fees, and they can vary widely. Make absolutely certain the fees are reasonable. Beware of overly-reasonable fees, however. If a provider is offering substantially lower rates than all the other companies in the biz, don’t take the bait. You’re guaranteed to get hit with hidden fees down the road. Chances are they also have a less than exemplary customer service department.
Finally, make sure of your providers reserve policy. Reserves are fees that processors retain as insurance against high-risk clients and chargeback concerns. If you’re facing these issues, search high and low to find a provider that doesn’t impose oppressive reserve demands on you.
4. No Caps
Whatever you do, be sure that your merchant account provider doesn’t have a cap on your monthly volume. Say you’re having a great month. Sales are sky-high, and it’s only the 12th day of the month. All of a sudden, you’re unable to process any credit card sales. That nightmare is called a cap, and it can literally ruin your business. If you don’t make sure ahead of time that your service provider doesn’t impose caps, then you’re in deep trouble. Take the time to find an account that allows for maximum flexibility from month to month. This will prove well worth your effort.
5. More Questions
Remember tip #1? Good. Here is its cousin, tip #5. The importance of asking lots of questions can’t be emphasized enough. Sure, you might feel a little overbearing while you’re grilling these service providers, but after it’s all said and done, you’ll be so happy you did. Take your time and be thorough.
- How long have they been in business? This is always good to know. A brand-new company might offer cutting-edge technology, but how is their customer service? Does the new staff have enough experience to provide the level of service your business needs?
- How accurate are their records? This question is best answered by current and/or former clients. They’ll give you the real story. Find out if the company has a solid history of providing accurate statements and deposit reports. How is their online presence? Do they provide quality online reporting? Again, we live in an electronic age. Online reporting is paramount. Also, if you’re able to track down another client, find out about their technical skills. If your system is down, you lose money. Some companies take far too long to resolve technical problems. This should never be tolerated. Insist on a company with a skilled tech department and stellar customer service.
Now that you’re armed with these tips, you’ll be better able to make an informed decision about which merchant account provider you select for your business.