Choosing a credit card processor is an important decision for many merchants and can sometimes be a tedious process. The following advice will assist you in making your decision.

The key to choosing a good processor is to first know the basics of the credit card processing industry and what obstacles to avoid. We have broken down the main issues that should be considered in your research.


The Sale
As with most service providers, salespeople drive the credit card processing industry. Processors and salespeople make their money from the sale of equipment, software, etc, and from the residual commission earned from your processing volume.

Many service providers and salespeople in this industry have focused on the money derived solely from equipment sales. The salary of the salesperson is based on volume and commission is paid whether or not your account is active. This practice leads to a lack of incentive for maintaining good customer satisfaction.

With an Independent Sales Organizations (ISO) their very existence depends on the income derived from the long-term relationship with the customer. In using an ISO, you are in touch with experienced salespeople whose income is derived from the residual commission and who concentrate on the long-term relationship by keeping the Customer’s interests and budget in mind.

Credit Card Processors sell their service in a very competitive environment. This means there is pressure to close the deal. You may be told one thing verbally and later, when it may be too late, realize you were misled.

To avoid “misunderstandings” get all the fees and promises disclosed in writing! This protects you from truth stretching or just out right lies. Also, make sure you ask detailed questions.

Another suggestion, although sometimes time consuming, is to read the fine print. The fine print will lay down the rules and regulations (rarely can you have these changed) and will also disclose the fees (these can be changed). Many contracts contain the base fees visibly on the front pages and hide the surcharges and cancellation policies in the back pages (small print). This is why it’s important to be thorough.

Bait and Switch
Credit card processors and ISOs have the right to raise or lower fees. Rate increases can occur due to fee increases passed to the processor from Visa/MasterCard (interchange) In turn, the processor passes the increase to the merchant. Rate increase can also occur if your business has been labeled “high risk”(i.e. type of business, excessive returns or declines, chargebacks, high volume sales). Increases can also occur simply for profitability.

When you sign up for processing services there are many variables and they can change at any given time. In order to maintain some control over these variables, you should make sure the contract is cancelable. You want to maintain the right to choose who you conduct business with so if your fees are raised you can shop around for a better deal elsewhere. If you give up this right, you will be forced to absorb the increase or pay cancellations fees ranging from $300-1000’s of dollars.

Avoid the bait and switch tactic at all cost. Here is how it works. You sign up for what started out as a great deal. Not long after your fees are increased because you have not met certain requirements or just “because”. You feel the increase is unreasonable and cancel your services. When you notify the processor of your decision to cancel you are reminded of the cancellation policy. Unaware of such a policy you demand to know were this policy is stated. You are then advised to read your contract. Remember what we said about small print and believe me it’s binding. Lack of fulfilling a cancellation obligation can end up on your credit report.
How do you avoid this pitfall? Read the cancellation policy, if it’s in the contract and it normally is, make sure you get a signed addendum waving it. Also, if you find a deal that is far better than others you have researched… proceed with caution! All processor have to pay the same interchange fees (our cost) to Visa/MasterCard. This means the profit margins between competitors is relatively close. If it sounds too good…get it in writing and make sure it won’t change 60 days later. If you decide to proceed, make sure you have taken the steps necessary to protect your right to move your business elsewhere if needed.


Education
Although price is a factor when obtaining service, keep in mind you get what you pay for. If your processing company has not taken the time to go over your options and educate you to the point of having at least a basic knowledge of the industry, you are selling yourself short. The time and money you can save by being advised by a professional in the industry can be enormous!
Our industry is rapidly changing and credit card acceptance has become an important function for many businesses. The diverse options for retail, mail/phone order, and Internet business are vast. The most expensive option is not necessarily the best. The needs of businesses vary. A good processor will provide you with a system that best suites your business and stays within your budget. Also, be advised on how the fees apply to you, how to avoid unnecessary surcharges, and how to protect your business from fraud and unscrupulous chargebacks.

Service
As stated earlier, credit card acceptance plays an important role for many businesses. If troubles appear or questions arise, you don’t want to spend time spinning your wheels. Whether it’s an equipment problem or questions about your statement, accurate and fast service is important. Customer support should also be available 24-hours, 7-days a week. Your sales agent should also be knowledgeable and accessible; you should be able to call on them when needed. Keep in mind sales offices are not normally 24-hours, 7-days a week, however, if you call the sales office during normal business hours and are continually greeted by an answering machine; you might want to look elsewhere. The last thing you need when a problem arises is an answering machine. The 24-hour customer service is great, but speaking to a salesperson you have formed a relationship with is better.

Some Self Promotion
Paynet Systems was able to offer you this advice because we are confident that we can provide the tools necessary to get the best deal possible. We at Paynet Systems feel now that all the cards are on the table we have a winning hand. We can provide this advice because we follow it. Our company survives on the residual gained from our Customers. Paynet Systems thrives on maintaining that relationship. Our dedication and quality service proves it! Paynet Systems offers professional advice and always treat the Customer the way we would want to be treated were the roles reversed. This sometimes means less money up-front because we don’t gouge on equipment or sell a product that is not needed. However, we trust in return we will earn the long-term business. If you should have any question or comments please feel free to contact us.

As always…Paynet Systems looks forward to exceeding your expectations!