As the world of business continues to evolve, it is almost impossible to operate a business, even a small business, without the use of technology. As plastic replaces cash more and more often, merchant services are a necessity for business – even for small businesses. Each business must choose a merchant service provider based on its unique needs. Ask these four questions when reviewing the best merchant services for your business.
What is the pricing structure?
Understanding the pricing model of each merchant service provider can help you understand if that provider is the right fit for you. Three common models are labeled as flat, tiered, and Interchange Plus.
- Flat: Pricing models that make use of flat rates are often most suited to businesses that have low monthly credit card volume. There is a flat (fixed) rate per transaction.
- Tiered: In this model, merchants are “qualified” and then assigned into one of three categories: qualified, mid-qualified, and non-qualified. The qualified merchants received better rates than the mid- or non-qualified merchants.
- Interchange Plus: The Interchange Plus model works by taking a fixed percentage fee and adding it to the Interchange fees established by major credit cards including Visa®, MasterCard® and Discover®. Traditionally, this pricing model was only available to merchants with high volumes ($25,000 or more), but as the industry changes, more and more businesses are taking advantage of this pricing model.
The best merchant services reps should be able to clearly explain what model they use and how it benefits your company.
What is the contractual obligation? What are the termination fees?
The key to making a smart business decision is knowing exactly what you are signing up for and how long you are obligated to keep your contract. Your sales rep should be able to clearly explain the terms of your contract and what the early termination fees are.
What kind of customer service is available?
You can tell a lot about a company by its customer service, and merchant service providers are no exception. When looking into different providers, inquire what type of customer service is available. The most common form of help comes from either a help desk or a 24/7 hotline. Most reputable providers will offer a 24/7 customer service and tech support.
What are the fees?
Learning about the startup and/or monthly fees associated with merchant services can help you be prepared; no one likes to be surprised when the bill comes! The best provider’s clearly state what (if any) fees you should expect to pay. Some common fees include:
- Application fee
- Monthly service fee
- Batch fee
- Annual fees such as a PCI compliance fee
- Monthly minimum penalty
When looking for the best credit card processor, your sales rep should answer all of your questions and address how they can provide you with the business solutions to take your business to the next step.