How To Select A Merchant Services Provider For A New Business

By Author: Hugh Springer
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If you own a business, it's a given that you'll have to accept credit card payments if you want to maintain a competitive presence in your industry. However, when attempting to select the right merchant service provider for your new business, you might initially feel a little overwhelmed by the volume of information you'll be expected to take in to make your choice. Here are some basic guidelines that can help direct you to a merchant services provider best suited to your business.

Determine Your Needs

Before you start to choose a merchant services provider, you'll have to assess your businesses merchant service needs. This includes things like knowing the average size of your transactions, if the majority of your customers pay in cash or credit, the average number of transactions you conduct each day, the number of employees who will be entrusted with processing credit cards, and estimating what percentage of your transactions are conducted online or over the phone.

For example, if your business is a traditional brick and mortar storefront operation, you'll find that you'll need to purchase or ...
... rent card swipe terminals. These are the devices that allow cashiers to accept credit cards instantly at a cash register. However, if your business is strictly web-based, you'll require a real-time processing system capable of instantly authenticating online transactions. You might also be a service provider who conducts transactions at a customer's location. This might include things like a pool cleaner, house painter, and such. In this situation, you'll need a wireless processing system which allows you to process credit cards on-site via a mobile phone or laptop. Finally, you might run a business that accepts mostly mail, telephone, and fax orders. This will call for a Mail Order Telephone Order (MOTO) system.

Rates

Now that you've determined what kind of system would work best for your business, your next step is to compare the costs and fee structures that various providers offer for these services. The discount rate of the merchant services plan is one of the most important aspects to consider. This refers to the percentage of each transaction that will be paid to the credit card processing company. You'll also want to find out if the plan adds any transaction fees which are charges added to any transaction regardless of size. While it can be beneficial to find a company that offers low discount rates and transaction fees, these are not the only factors to consider.

Processing Equipment

The next thing to consider is the cost of purchasing or renting the equipment that you'll need to process transactions. You'll need to once again look at your own business to determine your needs here. How many swipe terminals will your store require? Could you make do with a portable terminal that each salesperson could access when required, or should all cashiers have access to their own swipe terminal at all times? Will your online business require a more expensive real-time authentication processor, or would things run just as smoothly with a basic MOTO system? Seriously considering all of these questions can help you save hundreds of dollars on credit card processing equipment.

Other Costs

Lastly, you'll want to review any other fees attached to each provider's plan. Some plans may add an additional charge if the monthly transaction volume doesn't meet a pre-determined minimum. Other plans may automatically increase their discount rate after a certain number of charge backs (usually customer returns) or instances of customers disputing charges. It's always important to grill a potential merchant service provider about these and all other hidden fees, and to get everything in writing before signing an agreement. When it comes to choosing a merchant services provider, there is nothing worse than being hit with an unexpected fee structure.

Now that you know the basics of what merchant service providers have to offer, you'll be able to make the most efficient choice for your business. With that out of the way, you're free to focus on building your company to be the best it can be.
About Author:
At Card Processing Pros.com we provide credit card merchant services and debit card processing, literally setting up hundreds of clients per month to process card payments for storefront, Internet and phone/mail order-based businesses. We also offer services in electronic check and gift card processing. Visit online today.