Credit Card Processing - How to Choose the Right Service Provider For Your Small Business

You face various questions when you start looking for a credit card processing service such as Will the service really help my business?, How much will it cost?, Can I rely on them?, Are they trustworthy?, etc. The internet is a good source for searching out credit card processors. But how do you decide which processing service will best fit your business needs?

Here is a breakdown of the key deciding factors in selecting a credit card processing service for your business:

Credit card processing fees

The fee charged is naturally a critical consideration. You want a service that is affordable and well worth its cost. The types of fees charged by processors vary but the most common are explained below:

• Startup fee: Many firms do not charge this fee. For those that do, the fee is around $250. This is a "one time" fee.
• Gateway fee: If you have an e-commerce website, you will need a payment gateway to accept credit or debit card payments. The gateway fee is charged monthly and ranges from $10-$50.
• Statement fee: Some card processors charge a statement fee that ranges from $9-$10 per month.
• Monthly minimum fee: A monthly minimum fee ranging from $20 to $30 is charged to ensure minimum earnings from their clients.
• Transaction fees: This fee is charged by all service providers. A fixed amount that varies from 24 cents to 35 cents is charged per transaction. In addition, the service also charges a per transaction percentage that averages around 2.14%-2.40%.
• Address verification fees: Address verification is an additional security measure against credit card fraud. Some credit card processing services charge a fee for each address verified. This can cost your business 5-10 cents per address.

Desirable features in a credit card processing service

The next step is to find out whether the service provider serves all your business requirements. Match your needs with the solutions provided by the service.

Type of credit cards accepted

You need to verify the most common credit and debit cards used by your customers or the card types you would like to accept. Then, check if the card processor accepts them. The most common are Visa, MasterCard, Discover, and American Express.

Types of services

A credit or debit processing service should offer all the services needed to manage card payments in stores or e-commerce websites. Find out if the service offers:

• merchant account
• virtual terminal
• e-check services
• point-of-sale (POS) terminals
• shopping cart
• recurring billing
• reasonable payment clearing period

Credit card processing security features

Credit and debit card transactions are vulnerable to fraud and thefts. Card processor should provide basic security features such as:

• fraud protection
• CVV2 checking
• real time processing
• address verification
• SSL and encryption

Customer support services

What makes credit and debit card processing services dependable? A very low error rate and easily accessible customer service. They should be able to render help when you need it without losing time. Some features that should be part of the processor's offer are:

• customer support numbers, email, fax, and work times (24x7 is always preferable)
• guaranteed response times
• toll-free telephone number
• live online chat, if needed

Businesses should weigh costs and services before finalizing a credit card processing service. The deal should not only fit your business financially but also meet all your requirements.

Daljeet Sidhu is at TradeSeam. Read our Merchant Services and Credit Card Processing blog.

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