When you’re embroiled in starting or running a business, researching different payment processing systems is probably one of the last things on your mind. If you’re opening a restaurant or a retail shop, for example, you’re likely thinking about interior design and staffing before you even consider payment processing. This is completely understandable. But here’s the trouble: When the process by which you physically make money is a last-minute thought, it’s easy to get taken advantage of.
This post is from SwipeSum CEO Michael Seaman, a veteran of the credit card processing industry on a mission to give more power to merchants everywhere.When you’re embroiled in starting or running a business, researching different payment processing systems is probably one of the last things on your mind. If you’re opening a restaurant or a retail shop, for example, you’re likely thinking about interior design and staffing before you even consider payment processing. This is completely understandable. But here’s the trouble: When the process by which you physically make money is a last-minute thought, it’s easy to get taken advantage of. As I’ve written before, the payment processing industry thrives on keeping business owners in the dark via a lack of transparency, hidden fees, and the absence of personalized investment in customers’ needs. This means business owners who don’t conduct thorough research might wind up signing contracts that aren’t really in their best interests. The search for the right processor becomes even more challenging when you realize just how many misconceptions business owners hear about processing. But the good news is that once these myths are debunked, the world of payment processing gets a lot easier to navigate. So let’s right the most common misconceptions once and for all.
Misconception #1: “Signing a contract is always a bad idea.” Many business owners are hesitant to sign a contract with a payment processor because it feels so permanent—and they worry they’ll want to get out of the contract sooner than it expires. But here’s the issue: If there’s no formal agreement between your business and the processor regarding what you’re going to pay each month, then they’re at liberty to increase fees or even tack on additional monthly charges without notice—and you’ll have no leverage for combatting these fees. The Reality Even though it can feel intimidating to commit to a contract, doing so can actually help keep your processing costs low by ensuring your monthly prices stay fixed. In fact, you’re probably better off signing a contract than you are foregoing one. If you’re still hesitant, debunking the next misconception will put your mind at ease.
Misconception #2: “Processing contracts are unbreakable.” Most contracts in the payment processing industry last for three years and require a buyout fee from businesses looking to exit the contract early. (Not surprisingly, this also feeds business owners’ fears of signing contracts in the first place.) As a result, business owners who sign a contract tend to give up on looking for better options once they’ve signed—because they’re operating on the assumption that they’re stuck in the contract no matter what. The RealityYou are never without options. There are ways to work around buyout fees—for example, some processors will offer to pay the buyout fee in exchange for your business. (Here at SwipeSum, we can help connect you to a processor that does just that.) If you feel like you’re stuck in a crappy contract, it’s important to realize you are never actually stuck. You just need to enlist the help of experts who can help you exit a contract gracefully (and without paying a ton of fees). Misconception #3: “Bundled offers are a great option.”Many banks or point-of-sale software systems will offer payment processing services as part of bundled packages with your existing services. These bundled deals tend to be decent, but the trouble is they’re also one-size-fits-all. In other words, they’re not unique to your business or its needs. The RealityEven though bundled deals provide an easy fix, it’s worth seeking out processing systems that are more closely aligned with your business’ individual needs. The SwipeSum platform helps businesses do this every day. The extra effort of seeking out individualized processing systems can pay off in the form of cost savings and a better user experience, and this is what we seek for every one of our customers.
Misconception #4: “I’ll never find a better deal.” Salespeople are just that: people whose job it is to make a sale. Which means they have a vested interest in convincing business owners they’re getting the best dealever when they sign up for payment processing services from a given company. So business owners sign a contract thinking it’s in their best interests and then never think of it again (or at least not until the contract is up).The RealityJust because you’re convinced you landed a great deal doesn’t mean this is actually the case. To ensure that you continue to pay the lowest processing fees possible while getting great service, it’s important to review your processing system once a year (and at most, every three years). Whether you decide to leave your current situation or not, a review can help you trim hundreds off your bills each month by ensuring that you aren’t paying any unexpected fees or paying above the industry average. These aren’t just petty numbers: In some cases, the savings garnered from closely reviewing processing fees are enough to pay for a whole employee or equivalent. The antidote to all these misconceptions is a deep understanding of the ins and outs of the payment processing industry, including all the ways in which some processors conspire to take advantage of their customers. In order to find the best deal for your business, you would need to spend a good deal of time digging into reviews, asking for referrals from other business owners, learning about interchange and processors’ margins, and so on. To really understand the payment processing industry and how to find the best option for your business would easily take a month or more. But it’s a rare business owner who can actually find this time. That’s where SwipeSum comes in. We apply our expert understanding of the payment processing industry to finding you the best possible deal and the best solutions for your business’ specific needs. There are decent processors out there, and we’ll help you negotiate for the right services and sign the right contracts so your business is able to thrive without getting bogged down in hefty fees. Our work saves customers tens of millions of dollars in processing fees every year. We do it all so that business owners don’t have to.