Jul
13
2010
Selecting a credit card processing service brings up some vital questions such as Will the service improve my trade?, How much will it cost?, Will they be dependable?, Are they trustworthy?, etc. The internet is a good starting place to survey the market for credit card processors. But how do you decide which processing service is the solution for your trade requirements?
In this article, we discuss a few of the critical factors in selecting a small business credit card processing service:
The fee charged to accept credit cards is undoubtedly an important factor. Apart from the cost the service should add value to your business. Different card processors charge varying fees but the most common are described below:
- Startup fee: Many card processing companies don’t levy this fee. For those that do, the fee is around $250. This is a “one time” fee.
- Gateway fee: If you have an e-commerce website, you will need a payment gateway to accept credit card payments. The gateway fee is charged monthly and ranges widely from $10-$50.
- Statement fee: Majority of service companies levy a statement fee that averages around $10 per month.
- Monthly minimum fee: Credit card processors levy a monthly minimum in the range of $20-$30 to ensure at least some revenue from each customer.
- Transaction fee: This fee is common to all card processing companies. A set sum that varies from 24-35 cents is charged per transaction. In addition, the service also collects a cut (discount rate) that averages to 2.14%-2.40% of the payment amount processed.
- Address verification fee: Address verification is an additional safety measure against credit card deceptions. Some agencies charge a fee for each address confirmed. This can cost your business 5-10 cents per address.
Expectations from a credit card processing service
The next step is to find out whether the service can serve all your business requirements. List your requirements against the offerings of the processor.
Type of credit cards accepted
Record the most common cards used by your customers or the card types you would like to accept. Then, check if the credit card processing service accepts them. The most common card types are Visa, MasterCard, Discover, and American Express.
Category of services
A credit or debit card processing service should include all the services required to process payments in physical stores or e-commerce outlets.
Some services that should be included in the offer are:
- merchant account
- virtual terminal
- electronic check clearing services
- point-of-sale (POS) terminals
- shopping cart
- recurring billing
- reasonable payment clearing period
Credit card processing security precautions
Credit card transactions are susceptible to fraud and thefts. It is critical that processors take adequate steps to protect themselves and their clients:
- anti-fraud security
- CVV2 verification
- real time processing
- address verification
- SSL and encryption
Customer support quality
What makes credit card processing services reliable? An almost zero error rate and always available customer support service. Service providers should be able to assist you as and when required. Basic customer support includes:
- customer support numbers, email, fax, and work timings (24×7 works best)
- specified response times
- toll-free telephone number
- live online chat, if needed
Businesses should weigh expenses and services before finalizing a service provider. The deal should not only fit your business budget but also fulfill all your requirements. Daljeet Sidhu is the author of this article.
