Important Questions to Ask a Merchant Services Provider

Becoming an active merchant with an account can be a straightforward task, but things get complicated when setting up an online credit card processing system. There are several different merchant account service providers, and each of them will have a different structure of provided services, features, rates and fees, software compatibility, and security measures. As a merchant, you must ask these questions, as merchant account providers have a history of charging unnecessary fees, taking away your hard-earned money. Even though at a distance you may feel that all of them are essentially the same, upon a little research, you will see how different each provider is.

Payments are the soul of a business, and frankly, a company cannot thrive without regular and safe payments. Rushing into a payment processing relationship without considering the crucial details of what the processor offers can leave you and your business in jeopardy in several areas. Therefore, here are a few questions that you should ask before committing yourself to a merchant services provider.

What are the terms and conditions?

The first thing you need to ask here is whether or not you will be signing a contract, and if so, what would be its duration? This can be one of the most essential questions as some services may offer a month to month based contract while others may offer a very lengthy one. It can be very troublesome for a merchant to be stuck in a contract with a provider that does not meet your needs and has many fees for their services. The truth is, if a merchant service provider is transparent and reasonable in their services, they do not need to bound you by getting a contract signed. It should always be at the discretion of the merchant if they wish to take their business elsewhere. However, if you choose to sign a contract, you should know how long it shall go on, what happens upon the end of contract, and what happens upon early termination of contract? Some merchants have an auto-renew clause in their contracts and can sign you up for another contract without even notifying you. Therefore, the need to go through all the minor details of the contract is essential.

What should I expect to pay?

Some services provide an introductory rate that is due to increase after some while, or the processing rates may vary upon the details of the transaction. You need to clarify beforehand whether the rate that is being told to you applies to all transactions or changes for other transactions and how much. You can ask your merchant services provider whether or not they can give a guarantee of the consistency of their rate.

Each payment processor has its structure of fees. Some have a fixed rate, and some have a variable rate. There may be recurring fees included as well. You need to know for sure is the provider’s policy on charging markups on top of the interchange. This means they will make a percentage profit varying with the money you make. The more money you will make off a transaction, the more the merchant services provider will profit from that transaction. Some payment processors purposefully make their statements challenging to read so the client wouldn’t easily catch their hidden fees. Therefore you need to know the complete details of what you will be paying to the said provider.

Are there any Ancillary or Cancellation fees?

As aforementioned, merchant service providers tend to saddle their clients with many unnecessary and often unjustified fees, just as a way to make more money off their clients. You need to know that if a provider starts to list fees such as customer care fees, batch fees, statement fees, or even monthly maintenance fees, other providers would not.

Furthermore, there are charges like fees of PCI non-compliance, fees upon cancellation, fees of account change and chargeback fees. You need to understand in all detail the exact fees that you will get involved with and how to avoid them if possible. You need to make sure that you know whether you are getting into a flat rate agreement or a variable one. Even the most superficial difference in the calculation of the fees can result in a tremendous difference in the amount you will pay in the long run.

What software or equipment integrations will I receive?

You need to make sure that your provider is compatible with the way you are working currently. Also, transactions that are token-based or use an EMV chip for the transaction should be available to you as a merchant. Since October 2015, if a merchant does not have the ability to perform EMV chip enabled transactions, in case of a fraud, they shall be held responsible.

Also, you need to know whether the provider will be giving you new hardware that is compatible with your business. For example, managing online inventory or setting up an eCommerce store, a POS system would greatly benefit your business’s efficiency and working. You need to confirm from your payment provider what services and tools they are ready to provide you and at what costs to make sure that you are making the right choice of a merchant services provider.

How do You Assist with Fraud and PCI Compliance?

The solutions of token and EMV based transactions are steps that prevent the customers of a business to fall prey to fraud. But when you go to a merchant services provider, you need to know what they will do so that your business has all the protection against fraud or breach of security. Your provider should always have your safety as the top priority, and it should reflect clearly through both their history and their terms that your business will be safe with them.

Your merchant service provider should give you complete PCI compliance and end-to-end encryption mandatorily. PCI DSS is the standard of data security set by the payment card industry, and it sets minimum security guidelines for online credit card transactions. End-to-end encryption prevents third-party criminals from gaining anything from the data, even if they manage to intercept it. Fixing a payment breach can be very expensive, not to mention the loss you may have already faced. Therefore, choosing a payment provider that protects your business from fraud is utterly necessary.

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