How to Select the Right Credit Card Processing Company for Your Business

How to Select the Right Credit Card Processing Company for Your Business

Your small business is only as strong as the tools you use to run it, and that includes your credit card processing company. For the uninitiated, businesses have to work with a credit card processor in order to accept credit cards and debit cards in person, online, and by phone. 

Choose the right processor, and you’ll expand your ability to make sales, keep more of your profit, and stay ahead of fraud attacks. Choose the wrong processor, and you’ll pay higher fees, fight to escape contracts, and lose precious time and money dealing with customer support. 

We’ve got you covered. Learn how to pick the right credit card processing company with this helpful overview. 

5 steps to find the best credit card processing company for your business

With a few simple guidelines in mind, you can find a great processing partner for your current stage of business. You’ll weigh factors like cost, security, and reputation. 

1. Estimate your monthly sales volume and transaction size

You can use your company’s monthly sales volume and transaction size to narrow down your choices. We’ll explain how by running through some credit card processing basics.

Credit card processors can be divided into two categories: merchant services providers and payment aggregators. 

Merchant services providers 

Merchant services providers set you up with a dedicated merchant account. They offer more competitive rates than aggregators, especially as sales volume increases. The application process is more intensive, but there’s greater account stability and scalability. (Payment Depot is one example of a highly rated merchant services providers.) 

A merchant services provider may be better if:

  • Your credit card sales volume is over $2,500/month
  • You have a high average transaction size
  • Your business is established and expanding

Payment aggregators

Payment aggregators pool the funds of different merchants into one merchant account, making it easier for small or high-risk businesses to be approved. Aggregators usually offer flat-rate fees that are cost-effective at a low volume. That said, merchants report sudden account termination and frozen funds as a common issue. (Square and PayPal are popular payment aggregators.) 

A payment aggregator may be better if:

  • Your credit card sales volume is under $2,500/month
  • You have a low average transaction size
  • You want to start accepting cards immediately

Next, plan how you’ll accept payments. 

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2. Determine which payment methods and features you’ll need

Most companies offer solutions for a wide range of industries and business models. So, a little self-evaluation goes a long way before you start speaking with sales representatives. 

Create a list of priority features and functionality for the next six to 12 months. Think about the bulk of your transactions, and ask yourself:

  • Are most of your sales in-person, online, or on the go? 
  • Do you need to store customers’ payment details for recurring billing? 
  • What kind of reporting do you need access to?

Consider your goals, too. For example, a full-service restaurant owner may want to transition to tablet point-of-sale (POS) systems so she can provide convenient tableside payments.

Zeroing in on your must-haves and nice-to-haves will help you stay on budget.

3. Compare pricing structures and other costs

It pays to read up on credit card processing pricing structures because they can be confusing at best and deceptive at worst. Here are the four main rate structures:

  • Interchange-plus pricing: You’re charged the wholesale rate to run a card, plus the processor’s markup on each transaction. 
  • Membership pricing: You get access to the wholesale rate to run a card by paying a flat membership fee instead of paying a per-transaction markup. 
  • Tiered pricing: Your processor categorizes your transactions into groups, sets a rate for each group, and charges accordingly. (Note: We don’t recommend tiered pricing because it’s usually the least transparent option.) 
  • Blended or flat-rate pricing: Your processor charges one fixed rate for all your transactions. 

Just searching “Who is the cheapest credit card processing company?” on Google won’t yield the facts needed to make a fully informed choice. That’s because your effective rate depends on factors like risk level, sales volume, and transaction size. 

Ultimately, the word to remember is “transparency.” In addition to transaction fees, ask about equipment prices, monthly fees, cancellation costs, and more. If a sales rep can’t clearly explain pricing, it’s a red flag. 

4. Evaluate each processor’s fraud prevention tools

Affordable credit card processing should never come at the expense of payment security. In fact, with the rise of data breaches and expensive ecommerce fraud, data protection should be top of mind. 

A top credit card processing company will stay up to date with the latest security technologies. They should also provide guidance on how to comply with new industry requirements and standards. They’re the payment experts, after all! 

Here’s a handful of the fraud-prevention resources your processor should offer: 

  • Automated fraud-monitoring software
  • Card Verification Value (CVV) filter
  • Address Verification System (AVS) filter 
  • PCI compliance support
  • EMV card compliance
  • Payment tokenization 
  • End-to-end encryption

These tools safeguard you and your customers, so everyone can sell and shop stress-free. 

5. Read customer reviews and assess reputations 

Character counts, especially when it comes to credit card processing. Get the full picture by researching each processor’s industry ratings and customer reviews.

Credible platforms and publications include the Better Business Bureau, Merchant Maverick, Trustpilot, ValuePenguin, and Capterra. (These sites are also transparent about using affiliate links or paid listings.) 

A reputable company won’t have zero complaints, but they’ll respond to issues quickly and respectfully. Look for 24/7 customer service and knowledgeable agents. The quality of tech support you receive could make or break crucial sales.

Don’t settle for less

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Choosing a merchant credit card processing company can feel more like going on a blind date than a routine part of sales. Now, you can use these tips to find cost-effective, transparent processors and avoid a bad business relationship. 

Our mission at Payment Depot is to make credit card processing honest, from our straightforward pricing to our front-and-center customer reviews. Chat with one of our payment experts to see if we’re a fit for your business. 

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