Top 5 things businesses should know about credit card processing
5. All Payment Processors have the same fixed cost
There are hundreds of processors, independent sales offices and sales agents. It’s a little known fact that all of us have the same fixed cost for accepting Visa/MC/AMEX, etc. This cost is called “Interchange”. The rates are established and regulated by the Federal Reserve of the United States. They are updated and posted on the individual credit card company’s websites each April and October, the most important thing to understand for the merchant is what you are paying on top of that cost, and what you are getting in return.
4. Find the right fit
The best advice is to pick a payment solution that is right for you. If you are a small volume merchant processing less than $2-3,000 a month on credit cards, your best option is usually a basic, “flat rate” provider. Stripe, Square and Paypal are good solutions for these merchants because they are easy to setup and have no monthly, PCI or hidden fees. On the other hand, if you are doing a higher volume, or a large amount of transactions each month, those “flat rate” providers could end up costing you significantly more! Educating yourself on Interchange and industry pricing trends will help you find the best fit for your business.
3. Get the right #paymentstacks
Businesses accept payments in a variety of ways. In person, on the go, over the phone, through a website, custom software, or with a mobile device, the possibilities are endless! Start by mapping out the most ideal solution for you and your customers. Next, do your research to find the best tools to help you achieve that goal. While saving money is important, it’s not worth frustrating your customers or creating more headaches for yourself!
2. Understand PCI compliance and security
Payment data security is paramount for any business. If you or anyone you know has had their card stolen, you understand how painful that process can be. For merchants, it is much worse! Not only can it irreparably damage your reputation, there are a number of fines and other penalties you may be responsible for. Merchants are often on the hook for the lost products or services from fraud as well. There is also the possibility of PCI card violation fines that can start at $5,000 per record breached! It’s essential that businesses get serious about PCI Compliance!
1. Do your research
Finding the right payment processor takes time and research, but it is well worth the effort! For example, an eCommerce company who chooses a partner without data portability (ability to move saved customer cards) could end up having to lose the data, or pay thousands of dollars more to make the switch. Merchants need to be sure they have thoroughly researched and understand the fees, technology, security and service before they decide to use a credit card processor.
