7 Questions to Ask Before Choosing a Merchant Service Provider

Posted at August 4, 2020 » By : » Categories : Business Services »
merchant service provider

Online purchases reached $360 billion in 2016 and are expected to grow by over 77% by 2022. Is your business looking to accept electronic payments? You’ll need a merchant service provider with experience in your field who can handle payments securely and timely.

Here are 7 questions to ask before you choose a merchant service to collect your online payments.

1. Does the Merchant Service Provider Offer Customer Support?

Customer service is a critical factor when choosing a merchant service provider. You will need to be able to get ahold of someone at customer support if you have difficulties with your equipment or questions about the process.

Ask about the types of support provided by the company. Most companies offer some level of customer support but it can vary greatly.

If you own a business, like a restaurant, that operates after traditional hours you will need to be able to reach customer support after business hours should a problem arise.

Does this merchant service provider offer 24/7 support? Issues can pop up anytime day or night and when they do you will want to make sure you can reach the support team.

Some merchant account providers also offer 24/7 email or live online chat support too. Make sure you are familiar with all the ways you can reach your merchant services customer support team.

Read references and reviews online to make sure current customers are satisfied with the company’s customer support.

2. What Are Their Fees?

Some companies offer point-of-sale terminals and other equipment that can be purchased or leased. Both options come with their pros and cons. Be sure to ask about fees in changing or upgrading equipment later on.

Pricing for merchant services can be complex and confusing. Make sure you understand the merchant service fees of each company that you speak with.

There are two main pricing models: tiered pricing and interchange-plus pricing. Within these two systems, even more, models are available to choose from.

There are often different rates for different types of cards. These fees are generally driven by the card associations.

There may be other types of fees associated with your merchant service provider. Cancellation fees are pretty standard throughout the industry. Make sure you understand all the charges that you could collect to avoid unwanted surprises on your bill.

Also, ask about protection from fraud. Some merchant service providers can help protect your payments from fraud. Extra security services that the company includes such as encryption and fraud management help reduce your risk of fraud and may be worth a little extra in fees.

3. Can the Merchant Service Provider Process Online and Offline Transactions? 

If you are a brick and mortar business that also has an e-commerce platform, you will need a merchant service provider that can process both online and offline payments.

If you are only selling in person at the moment, consider if you would like to expand your company to include online sales in the future or vice versa.

As you expand your business you don’t want to have to switch merchant providers because they do not offer all the services you require. Choose a merchant service provider who can help you take your retail business online while still processing offline payments.

4. Is Their System PCI DSS-Compliant?  

Payment Card Industry Data Security Standard, or PCI DSS, establishes the basic security procedure that safeguards your customer’s payment information when they use their credit or debit card.

If your business processes, stores, or transmits customer’s credit and debit card information, your business must prove that it does so in a way that meets the PCI DSS requirements for security.

Your merchant services provider will help your business remain PCI DSS-compliant. Be sure to ask them about this capability.

5. How Long Does It Take the Merchant Service Provider to Process Funds?

Businesses need to have a predictable cash flow to be successful. It is important to know how much time it takes for a merchant who accepts credit cards as payment for when the funds will be deposited into their bank account.

There is no right or wrong answer here. Every company works a little differently, but you will want to know what that process looks like upfront.

Typically payments can take anywhere from 24 hours up to three days to process the payment. After payment is made, it has to go through several steps before it finally reaches your bank account.

Knowing how long to wait for payment can help businesses get an accurate overlook at their cash on hand and cash flow.

6. What Are the Terms of the Contract?

Many merchant service providers use contracts with companies they collect payments from. These contracts determine the length of time the two parties will work together.

If your business is just starting out, a shorter contract length is your best option. Once you feel comfortable with the merchant’s services you can take a look at longer contracts that they have available.

A shorter contract doesn’t back you up against the wall for too long if you decide you want to switch companies. Also, ask about fees associated with canceling your contract early. These fees are pretty standard but they shouldn’t be more than a few hundred dollars.

7. Is Their Payment Processing Compatible With Our Current System?

Finally, you need to ask the merchant service provider if their processing technology is compatible with your existing hardware or software. Many merchant service companies use their proprietary payment systems that could clash with your online stores existing software.

The same is true with brick and mortar stores. Make sure your existing terminals will work with your new provider before you sign the contract.

The Best Merchant Service Provider for Your Business

As a business owner, you have many choices for merchant service providers. Let each one of them earn your business by telling you what they have to offer. You don’t have to settle for a payment company that doesn’t provide the service that you are looking for.

Your FundingTree can make processing credit or debit cards easy. Simply fill out this quick online form to give us some details about your business and we will reach out to you with offers for you to review.