5 Tips for Choosing the Right Merchant Service Provider
This is an article that I originally wrote for BusinessBee.com
Merchant service providers are an important part of your business, since they bridge the financial gap between you and your customers or clients. Since the wrong provider can burn that bridge, causing you to lose clients and peace of mind, these five tips will help you make the right decision.
Perform a Needs Assessment
Do your homework so you can make a list of the services that you will require. While some services are standard requirements, you may also need recurring billing or credit card storage. Ideally, you want to get all of your services bundled, instead of juggling various providers to piecemeal the services together. Another issue to consider is how quickly will you need the money to be deposited in your account, and this time frame varies depending on the provider.
Evaluate Outsourcing and Exclusivity
Find out if the merchant service provider actually handles your credit card transactions or if they outsource these functions to a third-party. If you use a bank, as a general rule, they always outsource. The disadvantage to outsourcing is the hassle of going through the middleman when complications arise. You also need to ask if the merchant service provider has a exclusive point of sales (POS) software company that they require you to use, or do you have the liberty to choose your own POS software company.
Calculate the Costs
When evaluating the cost of the service, ask a lot of questions to uncover potentially hidden fees and extra charges. For example, ask about installation fees, programming fees and/or an annual fee. Find out if you will have to sign a lease or contract, and if there are cancellation fees. Some providers place a cap on the number of credit card transactions that you can accept each month, and if so, it needs to be a number that you’re sure you’ll never reach. Also, ask about different fees for business cards or international cards. Most reputable providers offer a trial period and a money back guarantee if you are not pleased with the services. Be wary of companies that won’t allow trial periods or provide a guarantee, and want you to sign lengthy contracts. This could be a sign that they struggle to get and maintain clients.
Inquire About Customer Service/Tech Support
If the provider does not offer 24-hour support, find out the service hours to determine if they’re sufficient to meet your company’s needs. Preferably, you have an IT person on your staff or on retainer, who can evaluate the provider’s software to determine if it’s compatible, whether they are using the latest technology, and if they perform routine software updates. Also find out if the provider has an IT team on staff to ensure that problems can be quickly addressed. And you need to be sure that their customer service people are knowledgeable as opposed to being message-takers who pass the information on to someone else -- which can significantly increase the time it takes to get an issue resolved.
Obtain References and Reviews
Before choosing a service provider, discover everything that you can about the company. Ask for -- and check -- references. Also, check their Better Business Bureau records for complaints. In addition, read the online reviews and complaints, but keep in mind that some companies pay people to write glowing reviews. And don’t forget to ask other businesses which provider they use, and if they’re happy with their choice.
While choosing the right merchant service provider involves a lot of factors that must be taken into account, these five tips can help you make the best decision, based on your needs.