Picking out a credit card processing service brings up some crucial questions such as Will the service improve my business?, How much will it cost?, Can I depend on them?, Are they responsible?, etc. The internet is an excellent tool to survey the market for credit card processors. But, what are the parameters involved in determining which processing service will best fit your trade requirements?
Here is a breakdown of a few of the critical factors in selecting a small business credit card processing service:
The fee charged to accept credit cards is undoubtedly a critical factor. You want a service that is affordable and well worth its cost. Different card processors charge varying fees but the most common are explained below:
- Startup fee: Many card processing firms don’t levy this charge. For those that do, the fee is around $250. This is a “one time” fee.
- Gateway fee: If you have an e-commerce website, you will need a payment gateway to process credit card payments. The gateway fee is charged monthly and can be any amount from $10 to $50.
- Statement fee: Majority of service companies collect a statement fee that averages around $10 per month.
- Monthly minimum fee: A monthly minimum fee ranging from $20 to $30 is billed to guarantee minimum earnings from each client.
- Transaction fee: This fee is charged by all card processing services. A set sum that varies from 24-35 cents is collected for each transaction processed. Apart from this fee, the service also charges a percentage (discount rate) that averages to 2.14%-2.40% of the payment amount processed.
- Address verification fee: Address verification is an additional security measure against credit card fraud. Some agencies charge a fee for each address verified. The charge for verifying addresses is around 5-10 cents per address.
What to expect from a credit card processing service
Once you know the costs, you need to verify if the service can serve all your business requirements. List your needs against the offerings of the processor.
Kind of credit cards accepted
Verify the most common cards used by your customers or the card types you would like to accept. Then, check if the credit card processing service accepts them. The most widespread card types are Visa, MasterCard, Discover, and American Express.
Kind of services
Whether you manage a brick-and-mortar store or run an e-commerce website, your credit card processor should offer comprehensive services.
Find out if the services include:
- merchant account
- virtual terminal
- electronic check clearing services
- point-of-sale (POS) credit card machines
- shopping cart
- recurring billing
- reasonable payment clearing period
Credit card processing security measures
Credit card transactions are vulnerable to fraud and thefts. Credit card processing services should provide basic security features such as:
- fraud protection
- CVV2 verification
- real time processing
- address verification
- SSL and encryption
Customer support services
What makes credit card processing services trustworthy? A very low error rate and easy to get to customer support service. Service providers should be able to render help as and when required. Features that should be part of the contract are:
- customer support numbers, email, fax, and work timings (24×7 is always preferable)
- fixed response times
- toll-free telephone number
- live online chat, if required
Businesses should weigh costs and services before finalizing a service provider. The deal should not only fit your business financially but also fulfill all your requirements. Daljeet Sidhu is the author of this article.
