Man arm swiping a credit card at a point of sale terminal

How to Shop For Merchant Services

Searching for the perfect merchant services provider takes time. You shouldn’t jump on the first offer that is handed to you. Instead, know what to look for in a good services provider. For example, certain fees are inevitable, but you don’t want to be locked into an unforgiving contract that is stuffed with hidden fees. When you’re shopping for merchant services, ask these four important questions.

  1. “What is the term of the contract?”
    The last thing you want is to be trapped in a strict contract that automatically renews. You should ask about the intricacies of a contract before even thinking of agreeing to one. It’s important to know whether or not you’ll be handed a cancellation or early termination fee. You should also know the duration of your contract: will it renew on a monthly or annual basis?
  2. “Is customer service reliable?”
    Just like any service you need for your business, you should look for excellent customer service. A standard 9-5 customer support phone line may fall short of your needs. Is there a 24/7 support line? Can you contact customer service online? If you can actually obtain the name and contact information of a real live customer service rep (instead of an automated service), you’re in good hands.
  3. “What fees will I be billed for?”
    Honesty is the best policy, especially when it comes to credit card processors. There is a litany of fees that your merchant service provider may or may not charge you. Some may disclose all of the fees you have to pay, while others will be sneakier and hide them within a shady pricing model. The credit card processors have to earn a profit somehow, but you should choose the most transparent merchant services provider.

    On that note, you should ask around about these rates and fees. Certain items, such as an interchange rate from Visa or Mastercard, will be the same regardless of the provider. The markup rate, which is an additional charge per transaction, exists solely for the processor’s profit. Unlike the interchange rate, the markup varies among service providers and typically ranges from 0.1% to 3%.
  4. “Will I have to provide my own equipment?
    Some merchant service providers will provide you with a card processing terminal free of charge. If a services provider offers a free terminal, be sure that it is EMV compliant. The last thing you want to is to be held liable for a data breach!

    Some providers won’t be as generous and give you the option of leasing a terminal. In this case, you may have to pay extra for a terminal fee. If you have to decide between leasing and buying a POS terminal, always go with buying—it saves money in the long run. 
Last Updated: January 17, 2017