Payment processing companies can help businesses to accept credit card payments. However, as a business owner, there are a few questions that you can ask any of the payment processors before you choose a provider.
Perhaps one of the most important factors that will influence the choice of a processor is the costs, and since the industry is not regulated, costs can and will vary. By getting the needed answers to the right questions, you can determine which of the payment processing companies will be most suitable for your situation. Your first task is to get a firm handle on the discount rates that will be charged to your merchant account.
The discount rates are charged by the issuing credit-card companies, and are usually based on a percentage of your monthly sales. They can vary from 1.5% to over 5%, and may depend on the type of business, the volume, average ticket prices, or average sale per customer. Businesses that are considered as high-risk, such as those with higher ticket prices, or e commerce businesses, are usually charged higher discount rates.
Agreement contracts offered by the payment processing companies usually last for a 3 year period, but you should find out what fees are charged for early termination. In addition the agreements may also state that your contract may be automatically renewed for an additional 3 years at the end of the period, if they are not contacted within a certain time. Although automatic renewal may be convenient, you should be fully aware of the conditions, if you wish to explore other options.
There may be different rates applied to transactions that swiped with cards as opposed to those that are entered via keypads. You may wish to structure your transactions, so that you take advantage of the process with the lower rates, or with recurring billing options.
You may need to determine whether your best option is to rent the Point-of-sale terminal, or if the better option would be an outright purchase. There is also the lease-to-own option, that may be available from some of the privately owned payment processing companies.
When considering a purchase, you should be fully aware of the conditions of any available warranty, and the features of the terminal. With new technologies being developed, you may wish to include features a such as smart card readers or NFC communications, which can add to the cost of the POS terminal, however, at the same time, the purchase, may add an asset to your business. On the other hand, rental will provide a replacement or repair at no additional costs.
The set up fees and application fees may vary. Some companies may offer free set-up, while processing fees may be higher. The set-up fees are one-time charges for programming the POS terminals, or they may be charged to training. The fees for set up may also differ, based on the card issuer, and may also differ based on the type of payment card.
There are several other fees that may be included in the costs. Fees such statement fees, gateway fees, processing fees, or settlement fees can vary, and can have an effect on the profitability of your business.