Choosing the right credit card processor for your company can be confusing. There are literally dozens to choose from and every one of them promise you the lowest rates as well as promising you low minimums, high maximums and more. This leads you to the point of knowing who to use and why.
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One thing that you need to understand is that the biggest credit card processors may not be the best one for you. However, the largest credit card processing companies are:
Each offers something positive to those who use them, but you should carefully compare them against some of the quality smaller credit card processing companies available to you and determine which one is going to provide you with the services that you need at the lowest rates.
A company like FirstData, for example, is one of the largest credit card processing companies in the business and they handle many very large companies like Wal-Mart as well as many smaller companies. So if you are a small home based company, then you would be able to qualify for the First Data credit card processing program but that of course you should still do your research to determine which company is best for you as size does not necessarily mean that First Data is the best credit card processing company for every business in every industry. This does not mean that you cannot accept credit cards, only that you will have to do some more research to determine which company is best for you.
Do I Need a Credit Card Processing Company?
Many companies start out thinking that they can run their business without taking credit cards; however, they learn pretty quickly that credit and debit are the primary ways of paying for services and products. If someone is ordering online, they do not want to wait an additional week for an echeck to clear or wait for you to receive a money order or cashiers check before they send out their items. As such, you need to have a way of accepting credit cards online.
A credit card processing company is a company who manages your credit card transactions for you. Companies like PayPal, for example, are credit card processing companies, although they do not necessarily bill themselves as such.
What to Look for When Choosing a Credit Card Processing Company
There are a lot of things to consider when choosing the right credit card processing company. Companies like FirstData offer a history of solid credit card processing at a low rate. However, as mentioned above, their specialty is large companies and their requirements would likely be too much for a small company.
Companies like PayPal work with any size company, but their merchant fees can be high.
With that being said, the first thing you should consider is whether a company will work with your size company. If they do, will they charge you more fees because you will not be making as much money as a larger, more profitable company? Here are some of the fees that you will want to look for:
Chargeback Fees & Retrieval Fees – these are fees incurred if a person who uses a credit card to purchase something from you reports that you charged them erroneously or that there was a problem with the transaction. At this point, you will not only lose the merchandise you sold, you will also lose the actual payment and you will be charged a fee because there was a chargeback. Some credit card processing companies offer you protection from these fees, so check for this kind of additional charge.
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Termination & Cancellation Fees – these fees occur if you terminate your account with your credit card processing service. However, you can negotiate a fixed fee up front and also negotiate that a fee would not apply after a certain amount of time (such as a year). If you have a dispute with your credit card processing company that cannot be resolved, then you should not pay a termination fee.
Hidden Setup Charges – these are surprise fees that are unexpected during setup. You should always check your contract before signing, as there are really no such things as ‘hidden charges’ only charges that are disguised. If possible, have a lawyer go over your contract before you sign, tell him or her your expected charges. Then see if they match up with what your lawyer finds. If you find these fees, consider using another company as this is a sneaky way to get you to pay additional fees for your services. If you cannot afford to hire an attorney, look for these ‘hidden’ fees:
- File fee
- Security fee
- Audit fee
- Conversion fee
- Over the limit fee
- Excessive transactions fees
- Discount rate fees charged on refunds
- Bill back fees
- Licensing fees
- Software fees
Non-Refundable Setup Charges – many companies do not charge a set-up fee and those that do should keep their rates reasonable. If you see non-refundable set up charges, take the time to compare their services with other companies, you will probably do better elsewhere.
Batch Fees – these fees apply when you transfer your money into an account at the end of a business day. Every company charges these fees and they should be very low.
Minimum Fees – every company charges minimum fees that range from $20 to $25. This does not mean you will be charged this amount every day, rather it means that your fees from your transactions (every company gets a fee per transaction) need to equal the minimum amount. If your total fees for the day do not equal that minimum amount, then you will have to pay the difference out of your total transactions.
Pass Through Fees – fees that your credit card processing company has to pay to Visa/MasterCard/Amex for using their cards that are passed on to you.
Voice Authorization Fees – there are times where you will have to call your credit card processing company and have them verify a card. In this case, you will pay a fee for the service.
Annual Fees – some companies charge annual fees while others do not. A lower volume of sales will probably garner you an annual fee.
Customer Support Fees – this is a common fee that is used to send you your monthly report as well as provide you with access to 24/7 live phone customer support through a toll-free number.
Technical Support Fees – many companies do not charge technical support fees, so consider this fee very carefully if it is on your contract.
Compare Credit Card Processing Companies
There are many companies to choose from and as such, you will want to do your research. There are companies that offer you side-by-side comparisons so that you can see what each company has to offer. Limit your search to companies that work with businesses of your size so that you can avoid getting excited about the rates from a company that offers very low rates but only to companies that meet certain criteria, such as a high volume of customers or longevity in business.
If you are a start up company who is not only looking for a company to handle their merchant services, but who are also looking for business credit cards for the company itself then try our credit card chaser tool. You tell us what you are looking for and we will find it for you. This will make your search quick and easy and you can occupy your mind trying to find a great credit card processing company to handle your companies other credit and debit card needs.
Also, if you are looking for a great credit card then take a look at our credit card “Chaser” tool to find and compare the very best credit cards online!
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