If you are a merchant looking for the best credit card processing company there are a lot of choices out there. In fact, practically from the moment your company is registered, you will be bombarded with advertisements from credit card processing firms wanting your business. For the vast majority of businesses, accepting credit cards and debit cards is definitely a capability you will need in order to succeed. Therefore the only question that remains is what is the best credit card processing company for your business?
What Differentiates Credit Card Processing Companies
Credit card processing companies exist because even though banks will offer credit card processing, typically they will not do so for many small businesses, nor for new businesses. Therefore, most people who are looking for credit card processing will need to choose between the many third party providers out there. There are many things to look at as there are multiple differences between them.
Some credit card processing companies specialize in offering services to online businesses only. Others prefer brick and mortar businesses. Many companies offer higher rates to new businesses because they know that established businesses will have higher volume. Others offer lower rates to get new companies in the door. However, the monthly minimums and additional fees will often provide extra revenue from these firms.
All businesses want a credit card processor that offers the lowest rates possible, so they can keep as much profit as possible on their sales. This is one of the major areas in which credit card processing companies are very different. They each set their own rates based on a variety of factors and the rate you are quoted from one processor can be very different than the rate from another.
The options you have concerning the machine you use for your credit card transactions is another way credit card companies differ. This is especially important for brick and mortar businesses. Some companies will rent their machines for a fixed amount per month. Others will sell you the equipment, which is a better option as it is cheaper in the long-run to buy it than to rent it. Still others will provide you with the machine free of charge if you sign a multi-year contract with the credit card processing company. Usually such contracts come with steep cancellation fees.
The Credit Card Processing Company That Fits Your Business
The most important thing when it comes to finding the best credit card company to fit your business is the cost. However, the discount rate you have to pay for each transaction is not the only thing to look at. Compare the other costs involved, such as statement fees, monthly minimums, variations for different types of transactions, cost of the machine you will be using and of course, transaction fees . While the companies are trying to beat each other in terms of the discount rate, the small details and extra fees can mean a much larger cut of your sales is taken than you expected.
Some companies work well for start-up companies while other credit card processing companies charge higher rates until a company is more established. Most processing companies offer progressively lower rates the more transactions you do in a given period. However, this scale changes from company to company and industry to industry, therefore the best provider for your neighbor’s company may not be the best for yours.
The duration of the contract is another thing you need to consider. We all start businesses with the expectation that they will do well and will be around for many years to come. However that is not the reality for most. In fact, the majority of new businesses will fail in the first year. Therefore if you are a brand new business starting out, you should look for a credit card processing company that does not make you sign a multi-year contract or one with reasonable cancellation terms.
Processing companies offer different rates for the different types of transactions one can do. The best credit card processor for a hair salon, where cards are swiped, may not be the best processor for a company that is based online. If you have an online business you will also need to make sure the credit card processing company is compatible with the type of check-out system you are using on your website. If your company does mostly keyed transactions, for example if many of your orders are by phone, you will need to look for preferred rates for that type of transaction. This is a very important aspect in finding the best credit card processing company for your firm.
In addition, it is important to make sure the company you are dealing with treats credit card processing securely. Check with the Better Business Bureau and do some online research into the company before signing with any credit card processing company.