5 Mistakes Beginners Make When Accepting Credit Cards
Accepting credit cards can give your business an edge that keeps your business both competitive and profitable. Credit cards have been consumers preferred payment method for years and it’s about time that all businesses offer this form of payment. If a business doesn’t accept credit cards they could continuously decrease their sales. Although if you do not do prior research on accepting credit cards, you could potentially end up overpaying. We’ve made a list of the top 5 mistakes that new businesses make when they begin to accept credit cards. Use this information to save yourself time and money!
1. Not shopping around for the right processor
Payment processors often specialize in certain categories of payments. This doesn’t mean that they can’t help you with all forms of payments, but different processors generally offer different products and services to help you accomplish your goal. If you run a brick and mortar business then you might want to find a processor that has plenty of POS options. If your business is remote you will need a processor that offers easy virtual terminals or gateways. Either way, once you identify how you want to accept payments you can find the right processor that compliments your needed solutions.
2. Choosing the processor with the lowest rates
Lowest rates are attractive! We get it. However, the processor with the lowest rate doesn’t always mean lowest cost. One tactic processors use is they offer you a low rate of 1.75% for example. Sounds low, right? Well once you get the bill you realize you are paying over 3%. This is because payment processing is made up of three separate parts: the bank's cost, the credit card companies’ cost (issuer) and the processor’s cost. Some processors will quote you a low percentage like 1.75% because that’s how much THEY are charging you, but regardless you will still be charged the bank’s cost and the credit card companies’ cost. To understand the different roles in the payment ecosystem, refer to our prior article: https://www.reddepayments.com/post/the-payments-ecosystem. In conclusion, always look for total costs and monthly fees. There is always a catch when the pricing sounds too good to be true.
3. Settling for bots and not real person support
Technology is never perfect. There will be times when your equipment malfunctions. You don’t want to have a payment processor that relies on bots or a ticketing system. If your system goes down and your business needs to accept payments you should be able to talk to a real person for immediate assistance. You never know when errors may occur. Imagine during the weekend rush your POS doesn’t turn on. Having a processor like Redde that offers real-person support can be the difference between success and failure for your business.
4. Failing to ask the right questions
You’ll want to ask your processor appropriate questions that will help your business in the future. We’ve gathered a list of questions that will point you in the right direction:
Do you offer interchange plus fees?
Are there any annual fees? (if so, how much?)
How long does it take to be funded?
Do you offer and add-on services that my business can benefit from?
What cards will I be able to accept?
Do you have solutions for mobile payments?
Will I be able to accept NFC (contactless payments)?
What fees will I be charged?
After completing the app, how long will it take to set up my account?
5. Accepting cancellation fees
Be careful reading the fine print when it comes to cancellation. Returning equipment is a standard among the industry and failure to do so could result in a fee. However, cancelling your account alone should come with no charge. At Redde, you’ll notice the “No ETF” note on all applications. That means we have no early termination fee set for all of our respective merchants. Some processors charge up to $300 to break your contract. Make sure when signing you are free to leave, at any time without any penalty.
Don't make the same mistake hundreds of businesses make per year by not asking the right questions. You need the right payment processor to cheer on your business on advocate on your behalf. If you would like to learn more about the right processing for you please email us at email@example.com.
Or if you'd like to switch now to start processing, visit us at: https://www.reddepayments.com/contact
Related Article: Hidden Fees That Payment Processors Charge Their Merchants