Choosing the Right Merchant Account Providers

Choosing the right merchant account provider for your business is not a walk in the park on a fine Sunday afternoon. With more and more people relying on credit cards for almost all of their needs, merchants with no credit card processing capabilities are in a frenzied search for credit card processing service providers so as not to be left behind by their competitors.

However, choosing the right merchant account provider for your business will determine how much of your hard earned sales you will get to keep!

Traditionally, credit card processing services were provided by banks alone. The advent of ISOs (Independent Sales Organizations also known as Merchant Services Providers) began the area of specialists able to provide more efficient services to an ever more diverse merchant base for card bearing shoppers.

The impressive growth of this industry sector also paved the way for the entry of giant credit card processors and merchant account providers like First Data, MSI, Elavon, and TSYS.

Today we see some of these giant credit card processors outsourcing the marketing of their services to smaller ISOs, the smaller ISOs then partner some of their requirements such as technical support, security and integration to the giant processors.

This has made the task of choosing the right provider feel like unraveling a rats nest of wires.

On top of this, merchant account providers differ immediately discernible in a list of their features and fees. Some concentrate on specific business niches while others are content with a shotgun approach offering a basket of services to any and all industries willing to partner with them.

Some are straightforward in dealing with clients while others are less so. Some offer only standard services while others give a complete line of payment solutions and support. It is always best to ask around and get feedback from other merchants before making your final choice.

Processors vs. ISOs

If we are to make a clear distinction, we can say that there are really two types of merchant service providers – the processors who aside from attending to their main job of processing credit card payments are also actively involved in marketing these services to merchants, and the ISOs who function as resellers or agents for the processors.

If you are to use this as the basis for choosing the merchant account provider for your business, you might logically leap to choose the bigger outfits thinking they should be the most equipped to meet your needs.

Unfortunately, this is not always the case as many of the processors have grown so large that they simply do not offer small merchants the support and flexibility you might need. For this reason they have partnered with smaller ISOs.

Point of fact, at the time of this writing about 80% of merchant accounts are handled by smaller ISOs!

So what does this mean to your search for a merchant account?

The Reputation of the Service Provider

It is important for you to know the service provider’s reputation. Knowing how they conduct business, how they handle their relationships with their customers, and their track record will give you the confidence to trust them with your merchant services needs. The Better Business Bureau provides a good starting point to start your reputation research. You may also ask some of their existing clients for feedback on their experience.

There exist a few quality websites that make finding this information easy to find.

Wink… Wink…

The Application Process

When comparing providers, choose an application process that is not too complicated.

Choose a provider that offers the fast turn-around and reasonable set-up fees! Your experience with the application process will be your first indication as to how streamlined your merchant account providers business systems are.

Challenges at application are an indication that things will not be as hassle free and easy as you would like later in your relationship.

Money Back Guarantee

You will rarely find an account provider offering a money back guarantee.

It is simply unheard of in this industry, but there is no harm in asking. You may not be able to get a money back guarantee, but choose a provider that is willing to stake their reputation on your satisfaction.

Ferret out the Truth

Get a clear and specific understanding of the fine print features. This should include rates for rewards, rates for corporate and international credit cards, minimum and annual fees, charge back policies, Address Verification Services, account restrictions, and PCI compliance.

Make a checklist of all of the above items and one by one have them explained in detail to your satisfaction by the sales representative of your chosen account provider. Verify if you can accept international credit cards in the first place.

No Cap on Monthly Volume

There are providers who put limits to monthly volumes. This is definitely a no-no because it can stop you dead in your tracks and the last thing you need is a restriction when sales are pouring like rain into your establishment. On the other hand, be aware of any minimum volume requirements and what fees are charged to offset your having a bad month and failing to hit the mark.

Early Termination Fee

Early termination fees are another industry standard that you will not be able to avoid.

I hate them, I rail against them, I complain about them, but I cannot as yet avoid early termination fees. Though I feel you should always have the option to jump ship if your provider is not giving the services you deserve, I don’t make the rules.

Just be sure to be fully aware of what the early termination section of your contract requires of you, and what it can cost you.

Length of Time in Business

Choose a provider who has been in this business for the long term and has worked to create long term relationships. Experience and expertise matters, and there is no replacing the experience of time working hard to create better customer value and long lasting happy customers.

With all the tips and suggestions on how to choose the right merchant account provider for your business, at some point you are going to have to take the leap and sign up!

But… before you do, be sure to find out our recommended best companies list created after compiling real people consumer reviews of merchant account providers that allow you to accept credit card payments.
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