4 Mistakes Business Owners Should Avoid with Credit Card Processors

Jun 21, 2016

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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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