How to Find the Right Merchant Account Provider

Whether you’re already established as a business or just starting, choosing the right merchant account provider isn’t an easy task. With proper research, you can be confident that you found the right provider for your business. See our list of helpful hints when choosing a merchant provider. 

Know Your Requirements.

Are you an online business, retail environment, and on the go processor? Understanding your processing needs will help prepare you for any questions a payment processing company might have. If you’re unsure of what your needs might be, ask questions as to any limitations of a given processing system. If you plan to expand and grow in the future, you also have to know if the provider is flexible enough to meet your future needs.

Do Your Research.

An excellent way to check a provider’s credibility is going through the Better Business Bureau profile. By doing so, you can see right off the bat if the provider has negative reviews. It’s crucial to review complaints to assess if the claim disqualifies the provider or was simply a miscommunication. If you want to go an extra step, ask the merchant provider you’re considering for client referrals. 

Technical Support Options

A good provider offers several technical support options, such as a toll-free customer service number or an online ticketing system. Ticketing systems can also be beneficial if you have general questions, but the ability to reach a customer service representative via the phone in an emergency is preferred. In the case of a situation where a terminal is not working correctly, can you call in transactions or use a manual credit card imprinting machine? 

Reasonable Rates

Do your research and collect the rates offered by different merchant account providers to compare. Identify those processors with the most competitive rates and be wary of providers that advertise significantly lower rates than others. Chances are those rates will increase dramatically over time, or they are not fully transparent with their fees. Advertised rates “as low as” may not apply to many of your transactions. 

The four different types of rates offered are Interchange-Plus, Flat rate, Subscription, or a tiered processing rate structure. Each structure provides a different way to process your transactions.

Tiered Pricing: In a tiered processing system, not all cards process at the same rate. Rates are determined by meeting specific requirements. These are typically broken down into qualified, mid-qualified, and non-qualified rates. Of the four different processing options, tiered pricing can be the most confusing as each transaction is subject to several different rates and add-ons.

Subscription Pricing: In a subscription-based processing plan, the vendor pays a monthly fee, and card transactions are processed at a flat rate plus a markup. For example, the monthly fee might be $99 per month, where each transaction is processed at 1.15% plus $0.10 per transaction with an additional markup of $0.15 per transaction. This type of system is good for companies that do a high volume of transactions.

Flat Rate Pricing: In a flat-rate processing plan, all transactions are processed at the same rate regardless of the type of card or how it was accepted. The transaction fees in this plan are very straight forward but typically very high. This type of plan is recommended for those with few transactions. 

Interchange-Plus Pricing: In an interchange-plus processing plan, a merchant provider typically offers a percentage and transaction fee on top of the non-negotiable wholesale fee. Let’s say the non-negotiable fee for each transaction is 1.15% +$0.10 per transaction; a processing provider will then apply an additional rate (0.5%) plus an additional transaction fee ($0.15) per transaction. This model works for most businesses and tends to be the most cost-effective. 

Monthly Processing Volume Capping

Let’s say you are having a record month for sales. You don’t want to discover that you can’t accept any more payments without paying extra fees because you’ve exceeded your agreed-upon processing limit with the provider. When choosing a provider, make sure that you understand any processing volume or transaction limits. If rates change based on volume or number of transactions, make sure you know when you’re approaching those limits. Make sure that your merchant account can grow as your business does. 

Bottom Line

These are generalized tips that you can use, but you are going to need to do your homework for selecting a merchant account to provide because there is no one-size-fits-all answer.

Boston Payments

Boston Payments offers complete payment solutions for all kinds of businesses such as restaurants, retail, e-commerce, and more. Talk with us today, and we’ll help you find the perfect payment solution for your business!

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