A Guide to Payment Processing
Best Practices with Payment Processing
A business should shop for Payment Processing Providers every 2 to 3 years to ensure you are receiving the best deal. Businesses should also look into the fees the providers are charging.
What is Payment Processing?
- Behind-the-scenes processes that take place after a customer provides their card information for a transaction
- Routing customer information to their bank and then back to your business’s bank
Why Credit Card Processing Costs Money:
- Rate is 3 separate charges
- Goes to the card processing network
- Goes to card brands
- Value-added fees
- Goes to payment processor
- Charges are usually lumped together for simplicity
Types of Payment Platforms for Payment Processing:
- Direct: Owned and operated by provider on the front side (where customers swipe card) and on the back side (where the payment gets authorized and settled)
- Gateway: Provider borrows another third-party platform to handle the back end of the transaction
- Needed to facilitate when the card isn’t present (Necessary to operate an online business)
- Small businesses can use a shopping card add-on service
Factors to choosing Payment Platforms:
- The way businesses accept payments
- Volume of transactions a business runs’
- Add-on features a business wants
- Level of service a business needs’
Fees that most Payment Process Companies Charge:
- Statement fees
- Setup fees
- Programming fees
- Equipment fees
- Charge-back fees
- Monthly maintenance fees
Factors that Change Fee Amounts Processors Charge:
- The type of business
- Restaurants pay more than retail stores.
- The amount of your average ticket
- The larger your average ticket, the lower the charge
What to look for in a Payment Processing Provider:
- When does the payment hit your bank account?
- Are they compatible with your business needs?
- Are there other fees?
- Does the provider offer customer support?
- Is there protection against fraud?
- Are there other security measures?
Where to look for a Payment Processing Provider:
- Your Bank
- Sam’s Club
- Local Chamber of Commerce for Referral
- Ask other business owners
How to Compare Pricing between Providers:
- Go to each provider’s website to compare all the fees
- The only fair comparison of charges is a line-by-line review of every potential fee.
- Find comparisons online from reliable sources
- Determine if the provider is reliable and trustworthy
Benefits of Businesses Processing Credit Cards:
- Increased sales volume and higher tickets
- Streamlined back office operations
- Increased customer loyalty
- Strong payments security
The 5 Best Small Business Credit Card Processing Companies:
According to Merchant Maverick, the top 5 small business credit card processing companies are
- Payment Depot
- Fatt Merchant
- National Processing
- Dharma merchant services
For more information visit MerchantMaverick.com