After researching credit card processors, speaking to different sales people and going over quotes, you will have to submit an application; you must first receive approval from your chosen credit card processor before you can start processing. Before you put pen to paper, consider the following four common mistakes business owners should avoid when shopping for a credit card processor.
- Skipping over the T&C of the Merchant Agreement
The application paperwork will include the terms and conditions of the merchant agreement. Doesn’t everyone read the T&C of the merchant agreement before signing? You may be surprised to hear that the answer is “no”. Why would someone sign without reading? The answer is simple: they are long and complicated documents with confusing language. While most (if not all) of us skim or skip the long terms of usage on websites or installed software, your merchant account agreement should not be one you fail to look over.
Your main objective is to find any red flags. Before proceeding any further, any questions and concerns you have should be brought to the processor’s attention. Taking the time now will save you from headache and frustration down the road.
- Not Being Aware of the Cancellation Penalties and Contract Term
One of the biggest issues merchants experience after signing their merchant agreement is pricing. They do not end up receiving the pricing that they were promised during the application process; this is troubling, considering the fact that pricing is one of the main decision making factors when choosing a processor.
So why does this happen? According to Shopify.com, either (a) the merchant does not have an adequate understanding of merchant industry pricing, or (b) the business owner received a verbal or email based quote, yet failed to read the contract.
- Not Making Volume Commitments
Many merchants are unaware that some processing agreements have volume commitments that they are required to satisfy; that is, a merchant is required to process a set amount of money each month. If this amount is not satisfied, the discount rate can be increased or certain financial penalties will be applied. This can be a big burden for small and mid-sized businesses. For the startup, it is completely outrageous. Make sure you do your research and you are aware of any volume commitments before you sign a processing agreement.
- Failing to Use the Competition to Your Advantage
When shopping for a credit card processor, make sure that you compare what you are being offered. If your first choice is offering something that sounds too good to be true, try comparing it with what your second choice is offering. Leveraging the expertise around you will ensure that you receive the best arrangement and value possible for your business.
Finding the best credit card processing is a big struggle for many businesses considered to be “high risk”. For example, merchants that deal with electronic cigarettes are quickly categorized as “high risk” by traditional lending sources and refused services. Thankfully, alternative providers – like EMerchantBroker.com – specialize in working with these business types. A merchant that finds themselves in that situation can quickly secure electronic cigarette credit card payment solutions with EMB. The application process is simple, fast and hassle-free.
Above all, when shopping for the very best in credit card processing, make sure you do all of your research and avoid these common mistakes.