Starting a new business presents entrepreneurs with a myriad of obstacles to overcome: Marketing strategies; shipping and logistics concerns; hiring the right employees; and more. One of the most overlooked (and perhaps most important) issues that comes with starting a new business is choosing the right credit card processor.
Starting a new business presents entrepreneurs with a myriad of obstacles to overcome: Marketing strategies; shipping and logistics concerns; hiring the right employees; and more. One of the most overlooked (and perhaps most important) issues that comes with starting a new business is choosing the right credit card processor. With all the seemingly more pertinent issues on their plate, it is easy to understand why a business owner would not invest much time into selecting the right payments processor to fit their needs. However, choosing the right processor from the get-go will prove to be extremely beneficial. Here’s why:
Payment processing contracts are terribly long and convoluted, and nearly impossible to understand for those who are not experienced in the payments industry. Within these contracts is a multitude of hidden fees which the business owner usually has no idea they signed up for. These hidden fees help to make up the processing company’s markup. The processor’s markup is the cost they charge on top of interchange, which is basically the wholesale cost of any credit card transaction. Processors mask certain fees by grouping them into rate tiers and these tiers can be changed at will. So, far too often businesses have their pricing tier changed without any notification, which results in higher costs.The key to eliminating those sneaky hidden fees is to choose a processor that offers an interchange-plus pricing model rather than a tiered pricing model because an interchange-plus pricing model is infinitely more transparent. This is for many reasons, the main one being the percentage and transaction fees that the processor charges do not change, no matter the transaction type or interchange fee. With this pricing model, a business owner will always know exactly what they are paying for.
Attempting to wade through the 30-page tangled mess that is a credit card processing contract would cost a business owner countless hours and an equal amount of headaches. While it would be impossible to meticulously review every phrase and clause of the contract, there are a few key points that are important to negotiate before signing with a payments processor, including data security, liabilities, rights assignments, and PCI compliance. Negotiating these terms will prevent a business owner from unknowingly locking themselves into a restrictive contract that is not suitable for their business or operations.While shopping around for a payments processor, a business owner should choose a processor that is willing to be flexible when it comes to contract length and cancellations. This will not only help merchants avoid contract cancellation fees, but will ensure a trusting partnership between the merchant and processing company. Having to decide between sticking out a restrictive contract and paying the expensive cancellation fees is obviously quite a pickle. A business owner can avoid this situation altogether by taking the time to negotiate their contract and choosing a processor that meets their terms.
There are many factors that contribute to the singularity of each business: Industry, product, location, online presence, etc. Because each business is unique, it is necessary to have a payment system that fits their individual needs. The appropriate payment system and accounting software will enable a business to run efficiently.Because the type of payment system and accounting software is integral to business operations, it is crucial to choose a processor that is able to integrate directly to these. Sure, choosing the processor with the lowest markup will save a business money on their monthly processing fees. But, if they must spend time and money to uproot their current system to accommodate this new processor, promised savings might not be realized. Simply put, a business should not have to change their current payment system in order to be compatible with a processor - they should choose a single processor that is able to provide a holistic service for all of their payment needs. Indeed, choosing the right processor is essential for the continued success of a business. The process of choosing the payments processing company that is the best fit is frustrating, arduous, and time-consuming. This has to do with the severe lack of transparency in the industry as a whole. This is where SwipeSum comes into play. We realize the great trouble of picking the perfect credit card processor and understand that most business owners simply do not have the time to identify the right one. That’s why we give them the gift of a transparent and holistic payment processing solution quickly and completely free of charge. By using our services, businesses are able to attain savings on payment processing within hours as opposed to months, giving owners more time to focus on running their business.