by Bob Kagan, WorldPay
If you’ve been in business for some time, you probably realize that not all Credit Card Processing Companies are created equal.
Virtually every Processor vying for your business approaches you with the same tired pitch about how their Rates are the lowest in the industry, that they have eliminated the middleman and will pass that savings onto you or that they promise to “meet or beat” your current rates or you get $100.
Don’t be fooled…Here’s how it works…
The Credit Card Companies (MC / Visa / Amex) assign a “Cost” to every Credit and Debit Card in the marketplace. The “Cost” is identical for Every Processor (If you happen to be Walmart you can negotiate a different Cost). The Processor then, based on their overall “Business Costs” set the Rates they will charge. There is no Middleman to be eliminated and rest assured when someone offers you $100 if they can’t meet or beat your current Rates…you will NEVER see the $100.
So, when you are bombarded with Merchant Services Providers seeking your business…how do you choose?
Your “Rates” should be fair, reasonable and competitive. They don’t have to be the lowest (Unless you are processing $10MM per year, there is no noticeable difference between 1.69% and 1.72%).
Pay attention to the “Fees” you are being charged. This category can get out of hand if you’re not careful. Items such as Administrative and Security Compliance Fees are common. There is no need to pay a Statement Fee (get it online) or a Batch Fee ($.25 per day doesn’t sound like much but it’s your $10 at the end of the month).
Do you receive your funds within 48 hours? Next Day Funding is what you should be seeking.
Customer Service in the Merchant Services world does not have a good reputation. The most common complaints are the long wait time on the phone (God Awful Music further complicates this issue). You should be seeking more from your Local Sales Representative. They should be your first call when something goes astray…not the 800#!!
The Merchant Services world is flooded with competitors. There are actually only a handful of Processors while the vast majority of salespeople belong to an Independent Sales Organization (ISO) which align themselves with a Processor. When choosing who to do business with, select a company that has a history, a following and presents themselves in a reasonable and fair manner. Remember the adage…if the deal sounds too good to be true…it probably is. This is especially true in the ultracompetitive world of Credit Card Processing
