If you are in business for yourself, it is imperative to have a way for your customers to pay you for your goods and services. Choosing a reputable credit card processor positions you to accept both credit and debit card payments either online or at point of purchase. As more and more consumers opt for carrying more plastic than cash, it becomes an essential component to make credit card processing available for your business.
There are a myriad of factors to consider when choosing the right credit card processor. The most obvious are its terms and conditions, its rates, and its fees, just to name a few. The unfortunate reality is that the industry is rife with scammers who are ready to lure unsuspecting business owners to benefit from competitive rates, only to have their rates hiked up later on without warning. Some have even been tricked into signing another contract when the business owner thought they were only updating their paperwork.
Here are more of the most commonly used scams and deceptive tactics that credit card processing companies use to snare their victims. Be aware and protect yourself.
Basically, if a company is matching another company’s rates, it’s more than likely that they are overcharging you to begin with. Also, just because they are offering you an amazing rate, what makes you think that they won’t raise your rates up again in the next few weeks, once you’ve settled in? Although reputable credit card processing companies do use this as part of their business model, it’s generally not a good sign.
Never lease a credit card machine. If a credit card processor insists that this is the only way to work with them, look elsewhere. This tactic is never to your advantage and in almost all cases, it is ridiculously expensive. A basic chip card-capable terminal could set you back $300-$500. But if you were to lease it, you are looking at a loss in the several thousands throughout the course of the lease. Leasing companies are notorious for their unethical practices.
Although automatic signatures are convenient, since they expedite the process of signing your name in multiple places, some companies have been accused of using customer signatures to sign them up for contracts they never agreed to. When it comes to signing up with a credit card processing company, always take the time to read the contract or agreement carefully.
Negotiated Lower Rates
This scam takes place when you receive an unsolicited message from a credit card processor, claiming that it has secured lower rates with a card network and is simply passing on the savings to you. There are a few special circumstances where a credit card processor can secure lower rates with the card networks, however, this is definitely a red flag. You can only qualify for this lower interchange rate if your business processes more than 82 million transactions a year and more than $5 billion in sales annually.
Unfortunately, many business owners have fallen victim to these scams and deceptive practices. The best way to avoid this to happen to you is to take the time to research your credit card processor carefully. Ask questions, sign nothing until you have read the fine print on all paperwork. Hire an attorney to scrutinize everything on your contract. This will save you money and give you peace of mind.