Payment processing can be a complex, bewildering marketplace. It’s a difficult-to-understand product sold primarily by thousands of independent sales organizations (ISOs), who are sponsored by banks as the effective sales and support arms of their merchant services divisions. As a result of this highly fragmented marketplace, service offerings are often unstandardized, and a solid understanding of the product, your ISO’s policies, and the agreement you are entering are of paramount importance. To help you through this process, below are five questions that any business should ask its current or prospective payment processing provider.
1) What’s my processing cost as a percentage of my revenue (the effective rate)?
Payment processors charge direct processing fees, payment gateway fees, and often additional monthly fees, which should all be added together every month to understand your true, effective rate. As a general rule, asking for interchange plus pricing (meaning the standard fees credit card companies charge, or interchange, plus a markup to your merchant services provider) will give you the most transparency and lowest rates. Regardless, ensure when you’re comparing providers that you’re making the apples-to-apples comparison, which is your effective processing rate.
2) How quickly can I get my funds?
In small, growth businesses, cash is king. Check around to see if you can get next-day funding, meaning if you process your payments the night before, the cash will hit your account the next day. If not, two-day funding is a common option as well.
3) Is your gateway integrated with my back office software and/or online shopping cart?
There are few worse productivity drains than processing payments manually outside of your existing technology solutions. If you’re using Limo Anywhere but not processing on our system, be sure to ask us for one of our preferred payments partners, or if not, check to ensure we are integrated with the gateway of the payment processor you’re planning to use.
4) Who is my point of contact?
Customer support – for technical problems, chargebacks, or other issues – is an important part of your decision. When your access to cash depends on it, make sure you’ve got a 24/7 point of contact if and when issues arise.
5) How much is the setup and/or cancellation cost?
Cancellation fees are common in the industry, not unlike cell phone contracts, because the cost of acquiring new business in a competitive marketplace like payment processing is very high (meaning it takes several months for the ISO to break-even on your account). If you’re signing a contract, check to make sure the cancellation fee is reasonable – $500 or less. As for that setup fee? Make sure you’re shopping that fee and/or negotiating to have it removed.
Many Limo Anywhere customers process payments through our software, and as a result, we have close knowledge of the payment processing industry, as well as qualified, preferred partners with whom we work closely. If you need help finding a good payment processing solution, don’t hesitate to contact us.