Key Considerations When Applying For A Merchant Account

As a merchant, deciding which credit card processing company to partner with can be a Make or Break issue. As such, the decision should be made with the utmost care.

Weighing profitability versus reputability can be a difficult process especially if one hasn’t dealt with finding a credit card processing company previously.

Unfortunately, poor quality companies are abundant, so choosing an appropriate company for your company’s needs will require thorough vetting and knowing exactly what your company’s needs are. There may be various pressures to choose quickly, but it is important to make thoughtful deliberations to avoid pitfalls.

High and Low-Risk Accounts

Hopefully, you already know whether you are designated as a high or low-risk merchant account. This makes a huge difference in the types and willingness of credit card processing companies to work with your company.

Low risk

These accounts are typically well-established industries with a limited chargeback, low average ticket size, and low monthly processing totals. Because these industries are easy to predict and require limited investment from the company to process your totals, these accounts are very attractive to banks and processing companies. Because of how attractive these accounts are and how plentiful processing companies may be, they can become the target for poor quality companies

High risk

These accounts are typically in an industry that is highly regulated, a possible reputational risk, or e-commerce. These accounts often face a difficult time finding quality companies to work with because of their drawbacks. However, there are companies that specialize in high-risk industries and actively seek high-risk clients in specific industries.

Customer (Service) is King

These two account types seem to have opposite obstacles but it boils down to the same decision-making process. For a business to function efficiently it is important to work with a reliable company that can cater to your needs to ensure reliability in case of an issue and keep your costs low.

An ideal credit card processing company will have easily contacted customer service representatives and is willing to tailor service to your needs, saving you money.

Easily reached customer support is vital in case of an issue, being able to speak with someone immediately to resolve an issue will vastly change the experience if something was to occur.

Although making this one of the utmost priorities may seem unnecessary, in the event of an emergency this may be the only attribute that really matters at that moment.

So How Do They Get You

Unfortunately, some of these companies operate with some impunity which makes it difficult to find companies that are reputable. Some companies will employ shady business practices which make them seem inexpensive compared to the competition then overcharging higher than industry standards. Some of these shady practices might include:

• Undisclosed charges and fees masked by seemingly low rates
• Locking in the long term or non-cancellable contracts which may have outrageous termination fees or monthly/annual fees that change as time passes
• Non-disclosed information or a misleading website that makes an informed decision possible

Options that employ these tactics may try to undercut the competition while not disclosing all the important information before signing with a processing company.

Even if you are quite savvy, research, and read through the contract you may still be taken advantage of; there are many ways for companies to save money. This can be done with non-competitive rates, poor quality equipment or requiring the customer to purchase/lease the equipment, and low functioning or non-existent customer service.

What To Look For

Now that we can spot and avoid poor quality companies, it’s time to start identifying what an ideal company looks like:

• Flexibility: A provider that is willing to tailor service to provide only what is necessary with quality products and services is ideal.
• Communication: It is important to be able to get into contact with someone at a moment’s notice in case of an emergency or an issue.
• Price: The most important aspects of price are early termination fees and competitive rates. Strangely enough, if it’s a quality company, the rate is not the most important issue. They will probably save you money in other ways like providing great equipment or showing extreme visibility regarding fees.

As with anything, not very much of this is cut and dry. All companies fall on the sliding scale of quality, it’s just important to avoid over compromising and protect the integrity of your business. There are good options out there!