The internet has evened the playing field for small businesses that want to compete effectively. As more and more purchases are made through online retailers, a business needs to accept credit card payments if they want any chance at capturing a share of the billions of dollars consumers spend online. The statistics are very clear in demonstrating that businesses that accept credit card payments see a dramatic increase in sales and repeat customers.
So, the question isn’t whether to accept credit card payments, it is which questions to ask when choosing a merchant services provider (MSP).
What Are All The Fees Associated With Your Service?
One of the confusing aspects of a merchant account is that there can be quite a few separate fees that are charged and not all fees apply equally to all accounts. The basic fees associated with all accounts are the discount fee, which is the fee charged by the processor per transaction, and the statement fee which is for generating your monthly statement. There are some additional transactions fees charged for dialing into the network to verify a transaction or if the buyer doesn’t have a physical card.
You should also be aware of a monthly minimum formula that can trigger a fee if your transaction totals don’t hit a minimum threshold. Other fees that can be applied are over limit fees, voided transaction fees, and debit card fees. To project the costs to your business, you’ll need a complete listing of fees to determine precisely how these fees may be applied in your particular business situation.
How do Your Services Help Me to Set up my Website to Accept Credit Card Payments?
The MSP provides you with access to its secure server (which enables you to display a secure server certification on your website) and a gateway. Most MSPs will also provide you with payment collection tools such as shopping cart interconnectivity. But you need to make certain that your MSP’s service works with any existing shopping cart function you have on your website, what technical assistance comes with their plan and what charges, if any, apply if you need technical assistance integrating it with your website.
How Are Payments Handled?
The MSP provides the merchant with an electronic terminal or access to an online processing tool that interacts with the credit card authorization centers. When a transaction is entered and is authorized, the funds are held for your account. Once you close out the day’s transactions, the funds are released and generally transferred to your bank account within the next 48 hours.
What Are The Costs For Equipment And Software?
Prices for terminal equipment or online processing software ranges from free to as much as $1000. When pricing equipment be sure to find out what add-ons may be required that are not included in a basic package, such as printers, check readers, or pin pads. Some MSPs offer a lease plan which may appear attractive if you don’t have the funds up front; however, the total lease costs are typically much higher than for an outright purchase of the equipment.
What Else to Consider?
The arena of merchant service providers is highly competitive and MSPs must find ways to add value and win your business. Don’t limit your criteria to pricing alone, as you may prematurely eliminate MSPs that offer superior customer service, better technical assistance in setting up your e-commerce site, service upgrades, and discounts for referred business. You also should get details and costs on technical service outside the initial setup period and warranty terms.
Last, but definitely not least, consider is how easily the information downloads to your accounting and order processing software. And, definitely negotiate with whichever provider you choose for additional discounts or “free” service upgrades.