DIRECTOR, National Retail Solutions (NRS). NRS POS, NRS DIGITAL MEDIA, NRS PAY, NRS FUNDING and NRS PETRO: helping independent retailers succeed.
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In recent decades, it has become more common to rely on electronic payment methods. Paying with cash is a rarity and is usually experienced as an inconvenience. Therefore, trying to avoid processing plants would do more harm than good. That’s why it’s important to choose the one that best suits your business. Doing research before enrolling with a processing company can save you time, money and stress. In this article, I will present a few factors that merchants should look at before selecting a credit card processing company.
Transaction costs
The first aspect that most traders look at with processing companies is transaction costs. Every time a customer uses a card in the store, it costs the merchant money. In the United States, consumers are moving away from cash transactions. Instead, they prefer to use debit and credit cards or touchless transactions when shopping. Every time a customer uses a card, the merchant is charged a transaction fee, which is how processing companies make money. That is why it is important to know what the transaction costs are before entering into a contract with a processing company.
These costs may vary, although the average is between 1.5% to 3.5% per transactionn. Nevertheless, they add up over time and can cause a dip in the trader’s profits. In addition, these fees are more damaging to small businesses because their larger counterparts have opportunities to close deals they can’t. So it’s also important for merchants to keep abreast of processing company partnerships and policies.
Cancellation fees
Let’s imagine a scenario. A small coffee shop merchant is looking for a better way to integrate electronic payments for their customers. They get a call from a processing company offering them a seemingly great deal. Instead of investigating the company, they accept the offer. A few months later, they realize they made the wrong decision. They are losing money, have encountered many technical issues and have had poor customer service. The trader decides to end the cooperation with the processing company. But when they look at the contract, they realize that if they terminate it early, it will cost them a fortune. So they are forced to stay with the company or a high cancellation costs.
To avoid issues with cancellation fees, consider asking other merchants, reading reviews, and taking a good look at your contracts are all important before committing to a processing company. Hiring someone to read a contract for you can be beneficial. Finally, it is important to compare different companies before choosing one.
Lack of transparency
The above example represents another factor that sellers should consider: whether the processing company they are considering is transparent about its operations. Some are known for hiding their processing speeds, changing fees within comparable companies, and hiding aspects of their policies until the merchant has signed a contract. This is a struggle that affects smaller businesses the most because they don’t have the resources that larger traders have. Small traders often don’t have a team of lawyers on hand to help them with every decision.
Nevertheless, while these practices are common, traders can avoid falling victim to them. Researching different processing companies can save you future problems. It is also important to stand up for yourself and your company. Some processing companies get away with their unfair practices because traders don’t speak up. So make sure you do your research and negotiate contracts rather than take the first deal offered.
Individual needs
Finally, it is important to recognize your different wishes and needs when it comes to processing plants. For example, you might want the ability to accept a range of payments, such as Apple Pay, better fraud protection, or the option of mobility. Not every processing company can provide what you are looking for, so knowing your standards is essential to make the best decision for your business.
Regardless of what a trader is looking for, research can greatly benefit them. It will help them figure out where a processing company thrives and what they lack. Nevertheless, it can still be helpful to check in with other merchants about processing companies!
Doing research before choosing a credit card processing company can lead to a long, successful relationship with a reliable provider. There are many processing companies to choose from, but it is not impossible to find reliable ones. As long as you do the right research, you can make these critical, informed decisions.
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