So, you have been approached by a merchant service company who is promising you a better rate on your credit card processing. Should you switch? Well hold on, not so fast. There is more at stake than just price and often the price quoted is not the real price. Before you switch over ask the following questions.
1. Do you provide local service and support?
If you are in the retail industry then local support is essential. What are you going to do if your equipment goes down? Industries like retail, restaurants and lodging depend on their credit card equipment and can't afford to say "sorry, we are not accepting credit/debit cards at this time." Waiting even a couple of days for new equipment will have a significant affect on the bottom line. A company that offers local support is more likely to have you up and running in a few hours instead of a few days.
2. How long have you been in business?
Unfortunately, the credit card industry is still an unregulated industry. Anybody can start a merchant service business. They get together and form a company and go to one of the big players in the credit card processing industry and buy a rate and then they take that rate and mark it up and resell it to you the merchant. They are known as ISO's (Independent Sales Organizations) and go unregulated. It is always best to find a company that is direct with Visa/MC and not a reseller of services. Make sure you are dealing with a company that has a good track record and always ask for referrals.
3. Are your merchant statements easy to understand?
Most of the merchant statements that I see out in the marketplace seem to be written to either hide the true rate the merchant is paying or just too complicated for the average person to read and understand. Ask to see a copy of the company's statement and have the sales representative walk you through it. Is it formatted so that it is easy to read? If so, you probably have a good company to work with.
4. Do you offer a variety of equipment to meet my needs?
There are many options for processing credit/debit cards today. There is no one size fits all solution, so make sure that the company you are dealing with has the equipment to meet your needs. Often times they can reprogram your existing equipment that you already own, but if it is a few years old you should upgrade to take advantage of the latest encryption and security features.
5. Should I lease or buy new equipment?
There are advantages to both, however don't get trapped into leasing overpriced equipment for way too long. I usually recommend to my clients to purchase the equipment over a six month time frame and most good companies will do this interest free. If the company you are looking to switch to can reprogram existing equipment, then you might even look into buying used equipment on the internet at a reduced cost.
6. Do I have to wait until the end of the month to check my deposits?
Most of the larger merchant service companies offer you a way to check transactions and deposits online. You can even go back in time and check historical data. Your accountant will love that.
7. What other services does your company offer?
Today's marketplace is very competitive and some of the bigger merchant service companies are branching out to offer a variety of services. These services can often help grow your business, save money and reduce liabilities. They might offer payroll services or electronic check processing or other services that when bundled together can save your company money and improve its bottom line.
This article is the property of W. Edmund Dykes, II - you may freely publish it on a website or newsletter as long as it is not modified in any way. It must include the author bylines; all hyperlinks and URLs must be made or remain active.
About The Author:
W. Edmund Dykes, II is a sales professional who works in the Tampa Bay area in Florida. He has an extensive sales background in insurance, employee benefits, investments, merchant services, payroll, and electronic fund transfers for companies. He can be reached at WEdmund.Dykes@e-hps.com or 813-802-1708.
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