Reviewing your credit card processing services is easier than you think.  If you hear yourself saying any of the following,

we can help! 

“I’m under contract”

Being under contract doesn’t mean you can’t change providers.  It means that you have to pay a fee to change processors. So from there really its just a matter of math.

There are three variables in the equation.  First, you’ll need an analysis of your current processing statement to determine a monthly savings amount (A).  Then you’ll need to know the number of months left on your contract (B).  Then you’ll need to know the amount of your early termination fee (C).

Then its just a matter of A x B is greater or less than C. And from there you decide.

For example, if savings is $100 per month, and you have 12 months left on your contract, and you have a $500 early termination fee.  You would be better off paying the $500 fee to terminate, as you’re still saving $700 over that time, and then $1200 a year going forward.  

In the same example, let’s keep savings and cancellation fee are the same, the same but there’s only 2 months left on the contract.  You might as well ride out the two months to not incur the fee.  

Really just a matter of having the information to make an informed decision.


“It’s a hassle”

In certain situations, yes.  But typically, it doesn’t have to be.  This is where experience comes in.   

Once the decision to proceed is made, the rep should have most of the info needed aside from a few pieces of info, signatures, and a voided check.  From there 1-2 business days to live account. And from there if it’s a terminal, that can be swapped out so its “plug and play” when you get it. 

If it’s a software or gateway, usually it’s even less noticeable – just a few numbers that get updated in the software to point the payments to a different processor. Your staff doesn’t even know anything changed.  

There are some situations where its more complex, such as if it involves changes in the point of sale system, software, or acceptance processes.  However, in these situations there is often more operational benefit to the new system, so there’s added impetus to change.  And what seems like daunting change can be broken down into a series of small tasks, if you know how to do it.

This all assumes you have someone competent and experienced handling your merchant account.  A simple thing can be made difficult by someone who doesn’t know what they are doing.   This is where experience is key; you don’t want someone just learning the processes on your account.


“I don’t want to have to buy a new terminal”

Another concern is the cost of hardware.  Many merchants think that a terminal will cost $500 or more, or worse, a monthly lease that seemingly goes on forever (and usually costs thousands of dollars in the end).  Most good processors out there will offer a free terminal placement or swap for basic equipment, with more advanced equipment (point of sale systems, etc) or additional terminals sold at cost. 

This is important for two reasons.  First, obviously, it saves you money.  But second, it tells you something about the organization you are working with.  A company that is offering a free terminal is first not cash strapped and trying to squeeze out every dollar they can.  They are more concerned with building a client base that is going to last.  And second, it tells you that they retain their clients.  A company that covers the upfront cost of equipment would be hemorrhaging money if their clients didn’t stick around.


“I don’t want to change my bank”

This is one I hear often.  You don’t have to change your bank account to change your credit card processing service.  Processors will deposit to whatever bank account you like. While a bank can provide credit card processing services, a credit card processor can’t provide you banking services. 

There are three banks in any credit card transaction; the issuing bank (your customer’s bank that issues the card), the acquiring bank (that’s the credit card processor), and the merchant bank (that’s your bank).  The acquiring bank is the one that pulls funds from the issuing bank, and sends them to the merchant bank.  Even if you process “through your bank” your bank still needs an acquirer to complete a credit card transaction.


It’s so confusing”

Well, yeah, it can be. However, it’s also been said that if you can’t explain something simply, you don’t truly understand it. And this is very true in the merchant account business. While much of it is very nuanced, the overall “how does this work” should be something a competent rep can easily summarize in plain English.

Take a statement for instance. It goes on and on for pages with a myriad of different fees, each assigned for specific reasons on each transaction.  But as a business owner, the question is what does it add up to.  We call this “effective rate” – take the total fee, divide it by the total volume, what is the percentage?  And what can we reduce that to?

You count on a pilot to know how to fly the plane to get you where you are going. You hire a CPA to understand the intricacies of the tax code to make your business operate efficiently. And you go to the mechanic when you need something fixed. Likewise with a merchant account, your rep needs to understand the considerations, but the goal is to produce the outcome. 


“I don’t even know where to start”

The biggest thing in the merchant service business is trust.  You wouldn’t work with a banker, attorney or doctor you don’t trust.  But when it comes to a merchant account that’s handling 50%, 80% or even 90%+ of your business funds flow, do you know, like and trust that person?

Trust is something you feel in your gut.  Is the rep pushing you along, or guiding you?  Do they provide explanations, or do they say “don’t worry about it”.   And very telling, do they have a term contract.  If someone needs a multi-year agreement with a heft cancellation fee to retain your business, you have to ask why.