How to Choose a Merchant Service Provider

BOCA RATON, Fla. - Aug. 19, 2013 - PRLog -- There are plenty of article out there explaining what is a merchant account, how does it operate, what are the pricing structures for credit card processing and explanations of different payment solution systems out there. I haven’t found a good and reliable article explaining how to choose a reliable merchant services company for your business.

I believe every business that respects itself should come to a point where it will think about accepting credit cards as a form of payment. Accepting credit cards has many benefits, such as increasing revenue, convenience and building trust among customers. We won’t get into that in this article but if you are interested in learning more about why you should accept credit cards I would recommend reading the page “Why MagicPay (http://www.magicpay.net/why-to-accept-credit-cards-on-iphone-or-android/)?” and scrolling down to the section “Benefits of Accepting Credit Cards”.

So, Where Should I Start?

You have made the choice that you want to accept credit cards, not so sure where to start though. The first thing you must understand about the credit card processing industry is that there are things that may sound too good to be true. Usually these “great deals” end up as a whole long and expensive procedure of getting rid of these deals. What do I mean? Many credit card processing companies may tell you that the processing fee is just 0.25%, then you would look around and see that most rates are ranging from 0.75% to 3.69% obviously that would sound like a good deal, in real life this is impossible since the credit cards networks (Visa, American Express, MasterCard and Discover) all have their own fees, ranging from 0.05% + $0.22 (Visa Regulated Cards) to 2.95% + $0.20 (Visa Business Card). Anyone could see what are the rates of each credit card network by just typing on Google “Visa interchange rates” for example.

Here you’ll find the rates for the four most dominant networks in the US:

Visa (http://usa.visa.com/download/merchants/visa-usa-interchan...)
American Express (https://merchant.americanexpress.com/accept-card/merchant...)
MasterCard (http://www.mastercard.com/us/merchant/pdf/MasterCard_Inte...)
Discover (https://ctlr.msu.edu/download/cashiers/DiscoverICApr13.pdf)

So now, that you understand that it is impossible to get free processing, what are the real elements you should look into when searching for a reliable credit card processor?

Reliability and Customer Service

Look into a merchant services company that offers 24/7 live customer service. When you are dealing with money, don’t go for less than that since it is your revenue, period. There are many companies out there that offer “email customer support”. I personally do not believe in this method since I believe that if there is a problem handling my money I want to speak to someone physically and resolve the problem as soon as possible, without waiting for someone to shoot me back an email at his / her convenience.

Retail / E-Commerce / Mobile Payment Solution

Look for a company that can handle your processing needs. Each company may have different processing needs due to the unique business structure of each company. Some companies may have a retail store, so they will only need to accept credit cards at a retail location. Others may operate online, so they will need an online payment gateway to handle all their online payments transactions. Some companies may operate on-the-go and they will need to accept credit cards on an iPhone or Android device (http://www.magicpay.net). Or some companies may even have a combination of all three (retail, online and mobile payments processing), if the merchant services company has the right payment processing solution for your business type at many cases it beats other elements.

Honesty

Everyone wants to do business with honest people but how would you know if they are or not, especially if you are not familiar at all with the industry? Look for online reviews, don’t believe deals that may sound too good to be true (0.25% processing!), and read the agreement to see if there are any weird hidden fees on there.

What are hidden fees to look for?

Customer Service Fee
PCI Service Fee – Do not confuse with PCI Compliance Fee since that it a legit charge.
Other Item Fee – Usually merchant service providers put it by the American Express transactions so they will make double money on the transaction fee for AMEX, since most credit card processors do not make any markup on American Express transactions.
Avoid tiered pricing if you can (Tiered is the famous Qualified, Mid-Qualified and Non-Qualified terminology), look for either a flat account or interchange pass through account.