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
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
savvy business owner always asks many, many questions. This should
always be done when choosing a merchant account provider. Consider these
- 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
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
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
5. More Questions
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
- 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.